Agnico Eagle Reports Fourth Quarter and Full Year 2015 Results
Fourth quarter 2015 cash provided by operating activities was
"In 2015, our operations continued to perform well, which allowed us to
do better on both our production and cost guidance for the fourth
consecutive year. Despite a volatile gold price environment, we
doubled our exploration spending, continued to advance our pipeline of
development projects, and reduced our net debt by approximately
Sean Boyd, Agnico Eagle's Chief Executive Officer. "Over the next three years, we are forecasting stable annual production
and costs, which should allow us to continue to invest in our existing
mines, maintain funding levels at our key exploration projects, advance
our development pipeline in
Fourth quarter and full year 2015 highlights include:
-
Guidance exceeded for fourth consecutive year - Payable production1 in 2015 was 1,671,340 ounces of gold at total cash costs2 per ounce on a by-product basis of
\\$567 , compared to guidance of 1,650,000 ounces at total cash costs per ounce on a by-product basis of\\$600 . All-in sustaining costs per ounce3 ("AISC") on a by-product basis for 2015 were\\$810 , compared to guidance of\\$850 per ounce -
Stable production and costs expected through 2018 - Average annual production from 2016 to 2018 is forecast to be
approximately 1.53 million ounces of gold. Production for 2016 is
forecast to be between 1.525 and 1.565 million ounces of gold with
total cash costs per ounce on a by-product basis of between
\\$590 and \\$630 per ounce. AISC for 2016 are forecast to be between\\$850 and \\$890 per ounce. Costs were calculated using a US\\$/C\\$ exchange rate of 1.30, EURO\\$/US\\$ exchange rate of 1.10 and a US\\$/MXP exchange rate of 16.00 - Increased gold reserve grades at key mines, significant increase in year-end 2015 gold resources, slight decline in gold reserves after mining depletion - Gold reserve grades increased at the LaRonde, Canadian Malartic, Goldex and La India mines. Measured and indicated mineral resources were up 1%, while inferred mineral resources increased by 23%. Mineral reserves declined by only 5% (0.9 million ounces) to 19.1 million ounces due to mine depletion of approximately 1.8 million ounces
- Gold resources increased by 67% at Amaruq - Inferred mineral resources at Amaruq now total 3.3 million ounces (16.9 million tonnes grading 6.05 grams per tonne ("g/t") gold). The 2016 Phase 1 drill program (approximately 75,000 metres) is now underway with a focus on expanding and upgrading mineral resources and outlining a second open pit deposit
- Initial inferred gold resources declared at El Barque?o and the Sisar Zone at Kittilla - At El Barque?o, initial inferred mineral resources are estimated to be 0.61 million ounces (19.7 million tonnes grading 0.96 g/t gold), while at Kittila the recently discovered Sisar Zone contains inferred mineral resources of 0.65 million ounces (3.4 million tonnes grading 5.91 g/t gold)
-
Moderate 2016 capital spending preserves production optionality in
Nunavut - Expenditures at Amaruq are designed to expand and upgrade the gold resources and outline a second source of open pit ore for the project. Planned spending levels at Meliadine for 2016 are expected to be sufficient to keep critical path elements moving forward. However, decreased spending as compared with previous internal forecasts is expected to delay the potential project start-up by approximately one year to 2020 -
Improved financial flexibility - In 2015, net debt was reduced by
\\$190 million , further strengthening the Company's investment grade balance sheet -
A quarterly dividend of
\\$0.08 per share declared
| _________________________________ |
| 1 Payable production of a mineral means the quantity of mineral produced during a period contained in products that are sold by the Company whether such products are shipped during the period or held as inventory at the end of the period. |
| 2 Total cash costs per ounce is a Non-GAAP measure. For a reconciliation to production costs, see "Reconciliation of Non-GAAP Financial Performance Measures " below. Total cash costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for by-product revenues, unsold concentrate inventory production costs, smelting, refining and marketing charges and other adjustments, and then dividing by the number of ounces of gold produced. Total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as total cash costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made. See "Note Regarding Certain Measures of Performance". For information about the Company's total cash costs per ounce on a co-product basis please see "Reconciliation of Non-GAAP Performance Measures". |
| 3All-in-sustaining costs per ounce is a Non-GAAP measure and is used to show the full cost of gold production from current operations. For a reconciliation to production costs, see "Reconciliation of Non-GAAP Financial Performance Measures - Reconciliation of Production Costs to All-In Sustaining Costs per Ounce of Gold Produced" below. The Company calculates all-in sustaining costs per ounce of gold produced as the aggregate of total cash costs per ounce on a by-product basis, sustaining capital expenditures (including capitalized exploration), general and administrative expenses (including stock option expense) and reclamation expenses divided by the amount of gold produced. All-in sustaining costs per ounce of gold produced on a co-product basis is calculated in the same manner as all-in sustaining costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made. The Company's methodology for calculating all-in sustaining costs per ounce may not be similar to the methodology used by other producers that disclose all-in sustaining costs per ounce. See "Note Regarding Certain Measures of Performance". The Company may change the methodology it uses to calculate all-in sustaining costs per ounce in the future, including in response to the adoption of formal industry guidance regarding this measure by the World Gold Council. |
New Three-Year Guidance Plan - Stable Production and Cost Profile
The Company is announcing its production and cost guidance for 2016 through 2018. The Company expects average annual production of approximately 1.53 million ounces of gold over the next three years with a stable cost profile.
Highlights from the new production and cost guidance for 2016 through 2018 include:
-
In 2016, payable production is expected to be between 1.525 million and
1.565 million ounces of gold. Total cash costs per ounce on a
by-product basis in 2016 are expected to be between
\\$590 and \\$630 using a US\\$/C\\$ exchange rate assumption of 1.30. Previous guidance for 2016 (from theFebruary 2015 forecast) was 1.60 million ounces. The change from previous guidance is primarily due to the expansion of the Vault pit, which increased overall production from Meadowbank but deferred ounces from 2016 to 2017 and 2018, thereby extending the mine life -
Consolidated AISC for 2016 are expected to be between
\\$850 and \\$890 per ounce. In 2017 and 2018, the Company's goal is to reduce AISC below this range -
The estimated production level in 2017 is currently forecast to be
approximately 1.55 million ounces of gold (up from 1.50 million ounces
in its
February 2015 forecast), while production in 2018 is forecast to be approximately 1.50 million ounces of gold. However, the Company is evaluating potential optimizations and opportunities (none of which have yet been approved for construction) at a number of existing operations to further enhance the production profile in 2018 and beyond. These include: - LaRonde optimization potential
- Bousquet Zone 5
- Lapa Zone 8 - Upper mine and Zulapa 7 - Deep 2 Zone
- Goldex optimization potential
- Increased throughput from Deep Zone 1
- Potential for accelerated development of Deep Zone 2
- Potential development of the Akasaba West satellite deposit
- Kittila optimization potential
- Upper Rimpi Zone development
- Potential development of the new Sisar Zone
- Mexican optimization potential
-
Satellite zones at
Pinos Altos and Creston Mascota - Potential to expand reserves at La India
Development Pipeline Expected to Provide Further Production Growth in 2019 and Beyond
The Amaruq and Meliadine projects in
Fourth Quarter and Full Year 2015 Financial and Production Highlights
In the fourth quarter of 2015, strong operational performance continued at the Company's mines. Payable production in the fourth quarter of 2015 was 422,328 ounces of gold compared to 387,535 ounces in the fourth quarter of 2014. A detailed description of the production and cost performance of each mine is set out below.
Total cash costs per ounce on a by-product basis for the fourth quarter
of 2015 were
In the fourth quarter of 2015, the average value of the Canadian dollar,
Euro and Mexican Peso were 10%, 7%, and 17% lower, respectively, than
the Company's 2015 currency price assumptions (see
For the full year 2015, the Company recorded net income of
Compared with the prior year, 2015 earnings were affected by lower
realized gold and silver prices (down 8% and 14%, respectively, period
over period) and increased exploration expenses (up 97%, period over
period). In 2015, exploration drilling yielded a significant increase
in inferred mineral resources at the Amaruq project in
For the full year 2015, cash provided by operating activities was
For the fourth consecutive year, Agnico Eagle has reported annual gold
production in excess of annual guidance. The Company's payable
production for the full year 2015 was 1,671,340 ounces of gold at total
cash costs per ounce on a by-product basis of
The improvement in gold production in 2015 was a result of strong operating results from all of the mines, particularly Canadian Malartic as a result of the full year inclusion of production, LaRonde as a result of the higher grades from mining in more gold rich areas of the lower areas of the mine (below the 215 level), Goldex due to better productivity, increased throughput at Kittila from the ramp up of the mill expansion, increased stacking capacity at La India, and higher grades from Pinos Altos. The decrease in total cash costs per ounce on a by-product basis in 2015 was primarily due to higher gold production for 2015, strong cost control initiatives at all of the mines and the positive effect of foreign exchange rates.
For the full year 2015, the average value of the Canadian dollar, Euro
and Mexican Peso were 5%, 4%, and 18% lower, respectively than the
Company's 2015 currency price assumptions (see
AISC for 2015 on a by-product basis was
Quarterly Dividend Declared
Agnico Eagle's Board of Directors has declared a quarterly cash dividend
of
Expected Dividend Record and Payment Dates for 2016
| Record Date | Payment Date |
| March 1* | March 16* |
| June 1 | June 15 |
| September 1 | September 15 |
| December 1 | December 15 |
*Declared
Dividend Reinvestment Plan
Please follow the link below for information on the Company's dividend reinvestment plan. Dividend Reinvestment Plan
Conference Call Tomorrow
The Company's senior management will host a conference call on
Via Webcast:
A live audio webcast of the conference call will be available on the Company's website www.agnicoeagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial 416-260-0113 or toll-free 1-800-524-8950. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.
Replay Archive:
Please dial 1-647-436-0148 or toll-free 1-888-203-1112, access code
8252919. The conference call replay will expire on
Liquidity - Existing Cash and Credit Facility Provide Flexibility
Cash and cash equivalents and short term investments decreased to
The outstanding balance on the Company's
Total capital expenditures made by the Company in the fourth quarter of
2015 were
Total capital expenditures for the full year 2015 were
Total sustaining capital expenditures made by the Company in the fourth
quarter of 2015 were
Total sustaining capital expenditures for the full year 2015 were
Three-Year Guidance Plan Outlines a Stable Production and Cost Profile
The Company is announcing its production and cost guidance for 2016 through 2018. The Company expects average annual production of approximately 1.53 million ounces over the next three years with a stable cost profile.
Various internal projects at current operating mines have the potential to add incremental production in 2018, while Amaruq, Meliadine and El Barque?o are expected to add significant production starting in 2019 to 2020. However, the Company continues to take a prudent and measured approach to development while maintaining financial flexibility.
In 2016, payable production is expected to be between 1.525 million and
1.565 million ounces of gold. Total cash costs per ounce on a
by-product basis in 2016 are expected to be in a range from
The change in production compared to the previous 2016 guidance is primarily due to the decision to proceed with the expansion of the Vault pit at Meadowbank (thereby extending the mine life). With the Vault extension, the production forecast at Meadowbank was reduced in 2016, but increased for 2017 and 2018.
Consolidated AISC for 2016 are expected to be between
Sensitivities to the 2016 guidance are presented in the table below:
|
2016 commodity and currency price assumptions |
Approximate impact on total cash costs per ounce on a by-product basis |
||||
| Silver (\\$/oz) | 16.00 | \\$1 / oz change in silver price | \\$2 | ||
| Copper (\\$/mt) | 4,700 | 10% change in copper price | Nil | ||
| Zinc (\\$/mt) | 1,750 | 10% change in zinc price | Nil | ||
|
Diesel (C\\$/ltr) US\\$/C\\$ |
0.77 1.30 |
10% change in diesel price 1.0% change in US\\$/C\\$ |
\\$2 \\$5 |
||
| EURO\\$/US\\$ | 1.10 | 1.0% change in Euro\\$/US\\$ | \\$1 | ||
| US\\$/MXP | 16.00 | 10% change in US\\$/MXP | \\$3 | ||
|
Estimated Payable Gold Production |
|||||||||
| Northern Business | 2015 Actual |
2016 Forecast* |
2017 Forecast |
2018 Forecast |
|||||
| LaRonde | 267,921 | 275,000 | 320,000 | 375,000 | |||||
| Canadian Malartic (50%) |
|
285,809 |
280,000 |
295,000 |
305,000 |
||||
| Lapa | 90,967 | 60,000 | 0 | 0 | |||||
| Goldex | 115,426 | 105,000 | 105,000 | 130,000 | |||||
| Kittila | 177,374 | 200,000 | 190,000 | 200,000 | |||||
| Meadowbank | 381,804 | 305,000 | 320,000 | 155,000 | |||||
| 1,319,301 | 1,225,000 | 1,235,000 | 1,165,000 | ||||||
| Southern Business | |||||||||
| Pinos Altos | 192,974 | 175,000 | 175,000 | 180,000 | |||||
| Creston Mascota | 54,703 | 45,000 | 40,000 | 40,000 | |||||
| La India | 104,362 | 100,000 | 105,000 | 115,000 | |||||
| 352,039 | 320,000 | 320,000 | 335,000 | ||||||
| Total Gold Production | 1,671,340 | 1,545,000 | 1,550,000 | 1,500,000 | |||||
| Total Cash Costs Per Ounce | 2015 Actual | 2016 Forecast* | ||||||
| Northern Business | ||||||||
| LaRonde | \\$590 | \\$592 | ||||||
|
Canadian Malartic |
596 |
593 |
||||||
| Lapa | 590 | 640 | ||||||
| Goldex | 538 | 601 | ||||||
| Kittila | 709 | 646 | ||||||
| Meadowbank | 613 | 750 | ||||||
| 609 | 644 | |||||||
| Southern Business | ||||||||
| Pinos Altos | 387 | 443 | ||||||
| Creston Mascota | 430 | 604 | ||||||
| La India | 436 | 470 | ||||||
| 408 | 474 | |||||||
| Total | \\$567 | \\$608 |
*midpoint of expected ranges
In 2017, payable production is expected to be approximately 1.55 million
ounces of gold. Previous guidance for 2017 (from the
In 2018, payable production is expected to be approximately 1.50 million ounces of gold. However, the Company is evaluating potential optimizations (none of which have yet been approved for construction) at a number of existing operations to further enhance the Company's production profile. These potential optimizations are discussed in more detail below.
Total cash costs per ounce on a by-product basis for 2017 and 2018 are expected to be similar to the 2016 forecast. In 2017 and 2018, the Company's goal is to reduce AISC below the level forecast for 2016.
Stable Three-Year Gold Production Forecast
Since the prior three-year production guidance of
Northern Business
| LaRonde Forecast | 2015 | 2016 | 2017 | 2018 |
| Previous Guidance (oz) | 245,000 | 300,000 | 330,000 | n.a. |
| Current Guidance (oz) | 267,921 (actual) | 275,000 | 325,000 | 375,000 |
|
LaRonde 2016 Forecast |
Ore Milled ('000 tonnes) |
Gold (g/t), Mill Recovery |
Silver (g/t), Mill Recovery |
Zinc (%), Mill Recovery |
Copper (%), Mill Recovery |
Minesite Costs Per Tonne4 |
| 2,106 | 4.28, 94.9% | 20.0, 76.0% | 0.35, 56.1% | 0.3, 80.8% | C\\$114 |
| _____________________________ |
| 4 Minesite costs per tonne is a non-GAAP measure. For a reconciliation of this measure to production costs as reported in the financial statements, see "Reconciliation of Non-GAAP Financial Performance Measures" below. See also "Note Regarding Certain Measures of Performance". |
At LaRonde, the new cooling and ventilation infrastructure that was commissioned in 2015 has helped to enhance the productivity in the deeper portions of the mine. Connection of the 269 and 293 mining pyramids and full commissioning of the coarse ore conveyor is planned for 2016, which should improve mining flexibility. The slightly lower production guidance for 2016 (as compared to Previous Guidance) is largely due to a more conservative sequence of merging strategic mining pyramids. This year, about 89% of the ore will come from the higher grade lower mine area (below the 248 level). The increased production forecasts through 2018 largely reflect an increase in grade closer to that of the average mineral reserves.
|
Canadian Malartic Forecast (50% basis) |
2015 | 2016 | 2017 | 2018 |
| Previous Guidance (oz) | 280,000 | 290,000 | 290,000 | n.a. |
| Current Guidance (oz) | 285,809 (actual) | 280,000 | 295,000 | 305,000 |
|
Canadian Malartic 2016 Forecast |
Ore Milled ('000 tonnes) |
Gold (g/t) |
Mill Recovery |
Minesite Costs Per Tonne |
Strip ratio |
| 9,505 | 1.03 | 89% | C\\$23* | 2.4:1.0 |
*includes the 5% NSR
At Canadian Malartic (in which Agnico Eagle has 50% ownership) guidance for 2016 has been slightly reduced as throughput levels are forecast to be approximately 53,000 tonnes per day ("tpd"). Any increase in throughput above this 53,000 tpd level remains contingent upon updating the existing operating permits. Several opportunities have been recognized to further optimize productivity, which could provide additional operational flexibility and result in increased production at the mine.
| Lapa Forecast | 2015 | 2016 | 2017 | 2018 |
| Previous Guidance (oz) | 75,000 | 50,000 | n.a. | n.a. |
| Current Guidance (oz) | 90,967 (actual) | 60,000 | n.a. | n.a. |
|
Lapa 2016 Forecast |
Ore Milled ('000 tonnes) |
Gold (g/t) | Mill Recovery |
Minesite Costs Per Tonne |
| 406 | 5.3 | 86.8% | C\\$123 |
Under the current life of mine plan, Lapa is only expected to operate until early into the fourth quarter of 2016. Two targets have been identified through exploration as areas that could potentially support future mining activity potentially in 2018, in a restart scenario. However, additional exploration is required, and any potential production from these areas are expected to require synergies with other production opportunities such as the Bousquet Zone 5 or the Pandora project (in which the Company has 50% ownership).
|
Goldex Forecast |
2015 | 2016 | 2017 | 2018 |
| Previous Guidance (oz) | 100,000 | 100,000 | 90,000 | n.a. |
| Current Guidance (oz) | 115,426 (actual) | 105,000 | 110,000 | 130,000 |
|
Goldex 2016 Forecast |
Ore Milled ('000 tonnes) |
Gold (g/t) | Mill Recovery |
Minesite Costs Per Tonne |
| 2,323 | 1.52 | 92.6% | C\\$35 |
At Goldex, production in 2015 was above the Previous Guidance due to a
faster than expected ramp-up in mining rates. Existing mineral
reserves and exploitation of the M3 and M4 zones are expected to keep
production levels and costs relatively constant through 2017. In
|
Kittila Forecast |
2015 | 2016 | 2017 | 2018 |
| Previous Guidance (oz) | 185,000 | 185,000 | 190,000 | n.a. |
| Current Guidance (oz) | 177,374 (actual) | 200,000 | 190,000 | 200,000 |
|
Kittila 2016 Forecast |
Ore Milled ('000 tonnes) |
Gold (g/t) | Mill Recovery |
Minesite Costs Per Tonne |
| 1,567 | 4.7 | 84.5% | €75 |
At Kittila, production in 2015 was below Previous Guidance due to slightly lower grades, recoveries and tonnes milled. A key focus at Kittila in 2015 was improving mill reliability. Several projects were carried out in the fourth quarter of 2015 which appear to have improved maintenance performance. With further optimization, the Company believes there is potential for improved mill availability, which could lead to higher throughput levels in the future.
Kittila performed well in the fourth quarter of 2015 resulting in record
average daily throughput of 4,750 tpd in
|
Meadowbank Forecast |
2015 | 2016 | 2017 | 2018 |
| Previous Guidance (oz) | 400,000 | 310,000* | 345,000* | 130,000* |
| Current Guidance (oz) | 381,804 (actual) | 305,000 | 320,000 | 155,000 |
*See revised guidance from the Company's news release dated
|
Meadowbank 2016 Forecast |
Ore Milled ('000 tonnes) |
Gold (g/t) | Mill Recovery |
Minesite Costs Per Tonne |
| 3,862 | 2.73 | 90.0% | C\\$77 |
In 2015, a decision was made at Meadowbank to extend the Vault pit. This resulted in decreased forecast production in 2016, but added approximately another year of production (now through the third quarter of 2018). This extension helps to partially bridge the production gap with the potential development of the Amaruq deposit. Production levels are expected to decline from 2017 to 2018 due to a decline in grade as the current mineral reserve base is depleted.
A major drill program is again planned at Amaruq in 2016 to expand the 3.3 million ounce inferred mineral resource (see the discussion on mineral reserves and mineral resources below) and to try to delineate a second source of open pit ore. The ultimate goal remains to potentially develop the Amaruq deposit as a satellite operation to Meadowbank.
Southern Business
|
Pinos Altos Forecast |
2015 | 2016 | 2017 | 2018 |
| Previous Guidance (oz) | 175,000 | 175,000 | 175,000 | n.a. |
| Current Guidance (oz) | 192,974 (actual) | 175,000 | 175,000 | 180,000 |
|
Pinos Altos 2016 Forecast |
Total Ore ('000 tonnes) |
Gold (g/t), Recovery |
Silver (g/t), Recovery |
Minesite Costs Per Tonne |
| 2,054 | 2.77, 95.5% | 74.1, 43.2% | \\$54 |
At
|
Creston Mascota Forecast |
2015 | 2016 | 2017 | 2018 |
| Previous Guidance (oz) | 50,000 | 45,000 | 40,000 | n.a. |
| Current Guidance (oz) | 54,703 (actual) | 45,000 | 40,000 | 40,000 |
|
Creston Mascota 2016 Forecast |
Total Ore ('000 tonnes) |
Gold (g/t), Recovery |
Silver (g/t), Recovery |
Minesite Costs Per Tonne |
| 2,000 | 1.17, 60.0% | 12.5, 13.4% | \\$15 |
At Creston Mascota, production in 2015 was slightly better than Previous
Guidance due to additional ore being encountered outside the block
model, which resulted in more tonnes stacked on the leach pad. Infill
drilling has encountered higher grade mineralization below the
| La India Forecast | 2015 | 2016 | 2017 | 2018 |
| Previous Guidance (oz) | 90,000 | 90,000 | 95,000 | n.a. |
| Current Guidance (oz) | 104,362 (actual) | 100,000 | 105,000 | 115,000 |
|
La India 2016 Forecast |
Total Ore ('000 tonnes) |
Gold (g/t), Recovery |
Silver (g/t), Recovery |
Minesite Costs Per Tonne |
| 5,341 | 0.92, 63.4% | 6.85, 11.0% | \\$9 |
At La India, production in 2015 was above Previous Guidance primarily due to favourable block model variances. The 2015 exploration program resulted in a 28% increase in mineral reserves year-over-year, and a 21% increase in measured and indicated mineral resources. The Company is evaluating near pit potential with a goal of further expanding the mineral reserves at the Main and North Zones and will consider opportunities to increase production at La India based on the success of that program.
Near-term Mine Optimization Projects Could Potentially Enhance 2018 Production
Over the next three years (2016 through 2018) annual production is forecast to average approximately 1.53 million ounces. The estimated production level in 2018 is currently forecast to be approximately 1.50 million ounces. However, the Company is evaluating potential optimizations and opportunities (none of which have yet been approved for construction) at a number of existing operations to further enhance the Company's production profile in 2018 and beyond.
LaRonde Optimization
In 2003, the Company acquired the Bousquet gold property from
Barrick Gold. The property adjoins the LaRonde mining complex to the east and hosts the Bousquet Zone 5, which previous operators had partly exploited by open pit. The Company is evaluating the potential to initially mine the Bousquet Zone 5 from a depth of 90 to 330 metres below surface via an underground ramp. This portion of the deposit contains indicated mineral resources of approximately 566,000 ounces of gold (9.3 million tonnes grading 1.90 g/t gold) and inferred gold mineral resources of approximately 109,000 ounces of gold (1.47 million tonnes grading 2.31 g/t gold). The mining method is likely to be similar to that employed at Goldex, and processing could utilize excess capacity from the Lapa circuit at LaRonde. Dewatering of the old pit is underway and permit applications to collect a bulk sample will be submitted shortly. An internal technical study is expected to be completed by the end of 2016.
At the Lapa mine two areas (Zone 8 East - Upper mine and the Zulapa 7- Deep 2 Zone) have been identified through exploration (see Lapa mine discussion) as areas that could potentially support future mining activity. Further exploration and internal studies are underway to look at synergies with other production opportunities such as the Bousquet Zone 5.
In addition,
Goldex Optimization
At present, the Goldex mill has about 25% excess capacity (rated capacity is 8,000 tpd, but forecast to process approximately 6,400 tpd in 2016). As such, the Company is evaluating opportunities to potentially increase throughput from the Deep 1 Zone, and the potential to mine a portion of the Deep 2 Zone. These opportunities, and the potential development of the Akasaba West deposit (see below), could enhance production levels or extend the current mine life and reduce operating costs.
In
Kittila Optimization
Previous drilling on the Rimpi Zone at Kittila has outlined a significant zone of mineralization with potentially wider widths and better grades than those currently being mined. The main underground ramp at Kittila is being extended to reach the Rimpi Zone, and it is also providing further underground drill access to test for additional depth extensions of the Rimpi, Suuri, Roura and the newly discovered Sisar mineralized zones.
In addition, a surface ramp is being driven into the Rimpi Zone (now at a depth of 190 metres below surface) for production purposes and to provide a second egress for the Suuri ramp system. It will serve as the main haulage route from the deeper portions of both Rimpi and Suuri and potentially the Sisar Zone.
In 2015, a new sub-parallel zone of mineralization (Sisar Zone) was
recognized by exploration drilling from the underground ramp being
driven towards the deeper portion of the Rimpi Zone. Additional
drilling through year-end 2015 continued to yield favourable results
(see Kittila mine discussion in this news release) at Sisar, and an
initial inferred mineral resource of approximately 651,000 ounces of
gold (3.4 million tonnes grading 5.91 g/t gold) has been announced (see
"Detailed Mineral Reserve and Mineral Resource Data (as at
Given that the Sisar Zone is located approximately 200 metres directly east of the exploration ramp (at a depth of approximately 800 metres below surface), Sisar could potentially provide an additional source of underground ore to the Kittila mill with relatively little additional underground development.
With the potential for higher mill capacity (approximately 20%) through ongoing optimization, development of the Rimpi and Sisar zones could result in increased future production levels and reduced operating costs at Kittila.
Mexican Opportunities
At
During 2015, higher grade mineralization was encountered at the bottom of the Creston Mascota pit. Work is underway to understand the potential impact of this mineralization on the pit design and production planning.
At La
Development/Expansion Projects in the Abitibi,
The expansion and development projects set out below, which have not yet been approved for construction, have the potential to add to the Company's production profile in 2019 and beyond.
Amaruq - Expanding the Mineral Resource Base and Locating a Second Open Pit Deposit is the Key Focus in 2016
The 100% owned Amaruq property consists of 114,760 hectares of Inuit and
federal crown land. Agnico Eagle acquired its initial interest in
In 2015, a
A large portion of last year's drill program was focused on the Whale Tail Zone, where drilling has outlined up to five mineralized lenses along a strike length of 2.3 kilometres and to a depth of up to 600 metres below surface. Mineralization at Whale Tail remains open in all directions. Significant mineralization has also been outlined in the IVR area.
As a result of the 2015 exploration program, the inferred mineral
resource at Amaruq increased by approximately 67% compared to the
inferred mineral resource of 2.0 million ounces of gold (see the
Company's
The first phase of a planned 75,000 metre drill program (costing
approximately
In late 2015, the Company received approvals for the construction of an all-weather access road linking the Amaruq access site to the Meadowbank mine. In 2016 the Company expects to carry out additional engineering and begin road preparation from the Vault pit at Meadowbank.
The Company expects to ultimately develop Amaruq as a satellite operation to Meadowbank, with the potential to begin production in 2019. Given that the initial mineral resource grade at Amaruq is well in excess of the mineral reserve grade at Meadowbank, the Company believes that there is good potential for Amaruq to have similar annual output to Meadowbank in its peak production years.
Permitting activities and engineering studies for the construction of an initial open pit mine and an underground exploration ramp at Amaruq are ongoing.
Meliadine - Moderate 2016 Capital Expenditures Preserves Production Optionality
Located near
The updated technical study for Meliadine released last year (see
The technical study was based on extracting only the 3.3 million ounces
of gold in proven and probable mineral reserves at
At
The capital budget for 2016 is
Internal studies are ongoing to evaluate the potential to extract additional ounces of gold from the Tiriganiaq and Wesmeg/Normeg deposits that could potentially extend the mine life, increase annual production and improve the project economics and the after-tax internal rate of return. These studies are expected to be completed in the third quarter of 2016.
On
The timing of future capital expenditures on the Meliadine project beyond 2016 and the determination of whether to build a mine at Meliadine are subject to approval by Agnico Eagle's Board of Directors which will be based on prevailing market conditions and outcomes of the various potential scenarios being evaluated.
El Barque?o - Initial Mineral Resource Announced, Significant Drilling Planned in 2016
The El Barque?o property in Jalisco State,
In 2015, the Company completed approximately 69,500 metres of drilling
at a cost of
Based on the 2015 exploration results and previous work programs, the
Company has estimated initial total inferred in-pit mineral resources
of approximately 0.61 million ounces (19.7 million tonnes grading 0.96
g/t gold) from the Azteca-Zapoteca,
In 2016, Agnico Eagle plans to carry out a
While it is too early to estimate the full extent of the mineral
resources and the number of deposits with economic potential at El
Barque?o, the Company has the experience of developing cost-efficient
mining operations in
Agnico Eagle believes that El Barque?o ultimately has the potential to be developed into a series of open pits utilizing heap leach processing, similar to the Creston Mascota and La India mines. Conceptual design studies and additional metallurgical testing are underway at El Barque?o with a goal of potentially starting operations in 2019.
Canadian Malartic - Odyssey Zone and Near Pit Opportunities Could Provide Future Production Upside
At the Canadian Malartic mine (owned 50% by Agnico Eagle and 50% by Yamana), exploration programs are planned to evaluate a number of near pit/underground targets at the mine and further define the extent of the mineralization at the Odyssey Zone (which is located to the east of the Canadian Malartic open pit). Both of these opportunities could provide new potential sources of ore for the Canadian Malartic mill.
In 2016, the Canadian Malartic block model will be reviewed to further define the potential of a number of near pit/underground targets and a 60,000 metre drill program has been proposed to further evaluate the extent of the mineralization at Odyssey. For additional details on these opportunities, see the Canadian Malartic section of this news release.
LaRonde - Studies Ongoing to Evaluate Potential to
Mine Below a Depth of 3.1 Kilometres
Studies are continuing to assess the potential to extend the mineral reserves and carry out mining activities between the 311 and 371 levels at LaRonde. At present, the mineral reserves extend to the 311 level, which is 3.1 kilometres below the surface. Drilling is ongoing to further expand the known mineral resource between the 311 and 341 levels. Additional holes are also being drilled to evaluate the extent of the mineralization down to the 371 level (a depth of 3.7 kilometres below the surface). In 2016, the focus of drilling will be on mineral resource expansion and mineral resource to mineral reserve conversion in the western portion of the LaRonde orebody.
Continued Capital Discipline in 2016
Based on the Company's budget assumptions. Agnico Eagle expects to fund
this year's capital expenditures, which are estimated to total
approximately
The estimated capital expenditures for 2016 include approximately
|
Estimated 2016 Capital Expenditures |
Sustaining |
Development Projects |
Capitalized Exploration |
Expensed Exploration |
|||||
| (millions of \\$) | |||||||||
| Northern Business | |||||||||
| LaRonde | 62 | - | 2 | 2 | |||||
| Lapa | - | - | - | 1 | |||||
| Goldex | 10 | 64 | 3 | - | |||||
| Kittila | 56 | 10 | 3 | 9 | |||||
| Meadowbank | 41 | - | - | - | |||||
| Amaruq | - | - | - | 43 | |||||
| Meliadine | - | 96 | - | - | |||||
| Canadian Malartic | 59 | 2 | - | 8 | |||||
| 228 | 172 | 8 | 63 | ||||||
| Southern Business | |||||||||
| Pinos Altos | 54 | 7 | 2 | - | |||||
| La India | 8 | - | 2 | 2 | |||||
| Creston Mascota | 7 | - | 1 | - | |||||
| 69 | 7 | 5 | 2 | ||||||
| Project Eval/Corp Dev | 36 | ||||||||
| Other Exploration | 2 | 37 | |||||||
| Total Expenditures | 297 | 179 | 15 | 138 |
2016 Exploration Program and Budget - Main Focus on Amaruq, El Barque?o and the Sisar Zone at Kittila
A large component of the 2016 exploration program will be focused on the
Amaruq project near the Meadowbank mine in
The 2016 Amaruq drill program commenced earlier this month with two
drills testing targets in the
Exploration expenditures at El Barque?o in 2016 are budgeted at
El Barque?o's gold-silver deposits could potentially be developed into a
series of open pits utilizing heap leach processing, similar to
In 2016, approximately
Depreciation Guidance
Agnico Eagle expects its 2016 depreciation and amortization expense to
be in the range of
General & Administrative Cost Guidance
Agnico Eagle expects 2016 general and administration expense to be
between
Please see the supplemental financial data section of the Financial and Operating Database on the Company's website for additional historical financial data.
Tax Guidance for 2016
For 2016, the jurisdictional tax rates are expected to be:
The Company's overall tax rate is expected to be between 40% and 45%.
Gold Reserves Decrease Slightly to Approximately 19.1M Ounces, Reserve Grade Increased at Key Operations
To estimate the 2015 year-end mineral reserves, the Company continued to
use conservative assumptions:
At year-end 2015, the Company's proven and probable mineral reserves (net of 2015 production) totaled 251 million tonnes of ore grading 2.37 g/t gold, containing approximately 19.1 million ounces of gold. This is a decrease of approximately 0.9 million ounces of gold (5%) compared with a year earlier. The decrease in the Company's mineral reserves is largely due to the 1,671,340 ounces of payable gold production in 2015 (1,910,000 ounces of in-situ gold mined), partially offset by successful conversion of measured and indicated mineral resources to mineral reserves at several operations.
Highlights from the
- Increased mineral reserve grades at LaRonde (5.31 g/t gold versus 5.20 g/t gold), Canadian Malartic (1.08 g/t gold versus 1.06 g/t gold), Goldex (1.61 g/t gold versus 1.49 g/t gold), and La India (0.90 g/t gold versus 0.85 g/t gold)
- At Goldex, the mineral reserves almost doubled to 668,000 ounces of gold with an 8% increase in the mineral reserve grade
- At the Akasaba project, initial mineral reserves of 141,000 ounces of gold are reported (4.8 million tonnes grading 0.92 g/t gold and 0.52% copper)
- At La India, the mineral reserves increased by 28% (188,000 ounces) to 867,000 ounces of gold (30.0 million tonnes of ore grading 0.90 g/t gold and 4.23 g/t silver)
The Company's year-end 2015 gold reserves are set out below:
| Gold Mineral Reserves | Proven & Probable | Average Gold | ||||||||||||||
| By Mine |
Mineral Reserve (000s gold ounces) |
Mineral Reserve Grade (g/t) | ||||||||||||||
| 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||
| Northern Business | ||||||||||||||||
| LaRonde | 3,109 | 3,432 | -323 | 5.31 | 5.20 | 0.11 | ||||||||||
| Canadian Malartic (50%) | 3,863 | 4,329 | -466 | 1.08 | 1.06 | 0.02 | ||||||||||
| Lapa | 78 | 170 | -92 | 5.49 | 5.84 | -0.35 | ||||||||||
| Goldex | 668 | 340 | 328 | 1.61 | 1.49 | 0.12 | ||||||||||
| Akasaba | 141 | 0 | 141 | 0.92 | - | |||||||||||
| Kittila | 4,353 | 4,524 | -171 | 4.80 | 4.93 | -0.13 | ||||||||||
| Meadowbank | 943 | 1,168 | -225 | 2.72 | 3.08 | -0.36 | ||||||||||
| Meliadine | 3,417 | 3,335 | 82 | 7.32 | 7.44 | -0.12 | ||||||||||
| Subtotal/Average | 16,572 | 17,299 | -726 | 2.57 | 2.57 | - | ||||||||||
| Southern Business | ||||||||||||||||
| Pinos Altos | 1,459 | 1,763 | -304 | 2.88 | 3.01 | -0.13 | ||||||||||
| Creston Mascota | 176 | 236 | -59 | 1.30 | 1.25 | 0.05 | ||||||||||
| La India | 867 | 679 | 188 | 0.90 | 0.85 | 0.05 | ||||||||||
| Subtotal/Average | 2,502 | 2,678 | -175 | 1.56 | 1.70 | -0.14 | ||||||||||
| Total Mineral Reserves | 19,075 | 19,976 | -902 | 2.37 | 2.40 | -0.03 | ||||||||||
Amounts presented in the table and in this news release have been
rounded to the nearest thousand. See "Detailed Mineral Reserve and
Mineral Resource Data (as at
In prior years, economic parameters used to model mineral reserves for
all properties were calculated using historic three-year average metals
prices and foreign exchange rates in accordance with the
The assumptions used for the
Details of the economic parameters used in generating the
While the gold price (in U.S. dollars) and currency exchange rates have changed, the gold price has remained relatively stable over the past 36 months, when reported in the Canadian dollar, Euro or Mexican peso. The following table shows the changes in gold price (in various currencies) and exchange rates used in the assumptions over the past three years, using the exchange rate assumptions of the long-life mines for the 2015 estimate.
Comparison of assumptions used to estimate mineral reserves and the gold price in local currencies in 2013, 2014 and 2015
| December 31 | |||||
| 2015 | 2014 | 2013 | |||
| Currency exchange rate | |||||
| US\\$/C\\$ | 1.16 | 1.08 | 1.03 | ||
| Euro/US\\$ | 1.20 | 1.30 | 1.32 | ||
| US\\$/MXP | 14.00 | 13.00 | 12.75 | ||
| Gold price per ounce in local currencies | |||||
| US\\$ | US\\$1,100 | US\\$1,150 | US\\$1,200 | ||
| C\\$ | C\\$1,276 | C\\$1,242 | C\\$1,236 | ||
| Euros | €917 | €885 | €909 | ||
| Mexican pesos | MPX15,400 | MPX14,950 | MPX15,300 | ||
The Company's overall mineral reserve gold grade has decreased slightly to 2.37 g/t from 2.40 g/t. This is the result of a reduction in the cut-off grades at each operation because of a slight increase of the assumed gold price when converted to local currencies (shown in the table above). Agnico Eagle has one of the highest mineral reserve grades among its North American peers.
In the Northern Business, gold contained in mineral reserves decreased by 726,000 ounces (4%) in 2015; during the year this business segment produced 1,319,301 ounces of gold (1,451,000 ounces of in-situ gold mined).
The largest mineral reserve increase in the Northern Business was at the
Goldex mine, where the amount contained in mineral reserves increased
by 328,000 ounces of gold (96%), year-over-year, to 668,000 ounces of
gold, with an 8% increase in the mineral reserve grade to 1.61 g/t gold
from 1.49 g/t gold. The increase is largely due to the successful
conversion of mineral resources to mineral reserves, mainly in the D
Zone as well as in the M and E zones. These are the initial D Zone
probable mineral reserves (354,000 ounces of gold in 6.3 million tonnes
of ore grading 1.75 g/t gold), related to the approval of mining the
Deep 1 project announced in the Company's news release dated
At the nearby Akasaba project, initial probable mineral reserves reported are 141,000 ounces of gold (4.8 million tonnes grading 0.92 g/t gold and 0.52% copper), the result of conversion of indicated mineral resources to mineral reserves.
Canadian Malartic had the largest decline in mineral reserves; its
mineral reserves decreased by 466,000 ounces of gold, mainly due to
2015 gold production of 285,809 ounces (322,000 ounces of in-situ gold
mined). The remainder of the decline was due to a slight reduction in
the pit shells related to the incorporation of the 5% net smelter
return royalty payable to
The decrease in the Meadowbank mine's mineral reserves by mine depletion
was partially offset by the conversion of mineral resources to mineral
reserves for the Vault pit extension, announced in the Company's news
release dated
At Kittila, the mining depletion was partially offset by successful conversion of mineral resources to mineral reserves.
In the Southern Business, the gold contained in mineral reserves decreased by approximately 175,000 ounces (7%) in 2015. This business segment had production of 352,039 ounces of gold (459,000 ounces of in-situ gold mined) in 2015.
There was a large increase at the La India mine where the gold mineral reserves increased by 28% (188,000 ounces) to 867,000 ounces of gold (30.0 million tonnes of ore grading 0.90 g/t gold and 4.23 g/t silver) compared with a year ago. The mine depletion was more than offset by the addition of new oxide reserves and by conversion of sulphide mineral resources to mineral reserves in the Main pit, the result of successful metallurgical investigations in 2015 and field-proven experience with the North Zone sulphide material.
The 304,000-ounce decline in mineral reserves at
It is the Company's goal to maintain its global mineral reserves at approximately 10 to 15 times its annual gold production rate. The current mineral reserves are within this range when compared to the Company's projected annual 2016 production rate.
In addition to gold, Agnico Eagle's proven and probable mineral reserves
include by-product metals of approximately 55 million ounces of silver
at the
At a gold price of
Measured and Indicated Mineral Resources Grow by Approximately 1%, While Inferred Mineral Resources Increase by Approximately 23%
Highlights from the
- Measured and indicated mineral resources now total approximately 309 million tonnes of ore grading 1.52 g/t gold, or approximately 15.1 million ounces of gold. This represents an increase of approximately 1% over the 2014 estimate
- Inferred mineral resources total approximately 230 million tonnes of ore grading 2.24 g/t gold, or approximately 16.5 million ounces of gold. This represents an increase of approximately 23% over the 2014 estimate
- At Amaruq, inferred mineral resources increased by approximately 67% to 3.3 million ounces of gold (16.9 million tonnes grading 6.05 g/t gold)
- There was a 43% increase (approximately 533,000 ounces of gold) in inferred mineral resources at Kittila, which includes initial mineral resources in the Sisar Zone discovered in 2015
-
An initial inferred mineral resource of 608,000 ounces of gold and 3.7
million ounces of silver (19.7 million tonnes grading 0.96 g/t gold and
5.78 g/t silver) was estimated at the El Barque?o project in
Mexico - At Canadian Malartic, the approach of tripling the cut-off grade of the out-pit mineral resources had the effect of removing 343,000 ounces from the measured and indicated mineral resources, leaving 625,000 ounces (12.8 million tonnes of ore grading 1.51 g/t gold) in measured and indicated mineral resources. The same approach resulted in removing 344,000 ounces from the inferred mineral resource base, leaving 213,000 ounces (4.5 million tonnes of ore grading 1.47 g/t gold) of inferred mineral resources. The cut-off grade used for the calculation of mineral resources at Canadian Malartic is now similar to that used at Goldex
The Company's measured and indicated mineral resources now total
approximately 309 million tonnes of ore grading 1.52 g/t gold, or 15.1
million ounces of gold. This represents approximately a 1% increase in
ounces and a slight increase in grade over the
Measured and indicated mineral resources at Kittila increased by 198,000 ounces of gold. La India's measured and indicated mineral resources increased by 143,000 ounces of gold. These increases were offset by the successful conversion drilling from inferred mineral resources at several of the operations, particularly Akasaba and Meadowbank.
At Canadian Malartic, the gold in all mineral resource categories declined as the result of adjusting the approach to the out-pit material (adjacent to or below the pit outline) throughout the property. The approach of tripling the cut-off grade of the out-pit mineral resources had the effect of removing 343,000 ounces from the measured and indicated mineral resources, leaving 625,000 ounces (12.8 million tonnes of ore grading 1.51 g/t gold) in measured and indicated mineral resources. The same approach resulted in removing 344,000 ounces from the inferred mineral resource base, leaving 213,000 ounces (4.5 million tonnes of ore grading 1.47 g/t gold) of inferred mineral resources. The cut-off grade used for the calculation of mineral resources at Canadian Malartic is now similar to that used at Goldex. All data shown for Canadian Malartic represent Agnico Eagle's 50% ownership.
The Company's inferred mineral resources now total 230 million tonnes of
ore grading 2.24 g/t, or approximately 16.5 million ounces of gold. This represents an increase of 23% or approximately 3.1 million ounces
of gold in inferred mineral resources (see the Company's
The largest part of this increase is the significant updated inferred mineral resource of 16.9 million tonnes grading 6.05 g/t gold (approximately 3.3 million ounces of gold) at the higher-grade Amaruq discovery, which is 50 kilometres from the Meadowbank mine in Nunavut. This is an increase of 1.8 million ounces of gold compared with a year ago. Approximately 56% of the Amaruq mineral resources are near-surface.
A portion of the 2015 exploration program at Amaruq involved drill testing portions of the Whale Tail deposit from the north to the south to gain a better understanding of the geological controls on the mineralization. This drilling led to the modelling of thicker, but slightly lower grade zones of mineralization, which resulted in a modest decline in the grade of the inferred mineral resources reachable by open pit.
As at
Exploration drilling at depth was responsible for a 43% increase (approximately 533,000 ounces of gold) in inferred mineral resources at Kittila, which includes initial mineral resources in the Sisar Zone, which was discovered in 2015. More details about Sisar can be found in the Kittila operations section of this news release.
The Upper Beaver and AK properties in the
Successful conversion drilling at depth at the Goldex mine resulted in approximately 329,000 ounces of gold from the inferred mineral resource category to mineral reserves.
The distribution of mineral resources by property is set out in the
following table. For full details including tonnage and grade, see the
"Detailed Mineral Reserve and Mineral Resource Data (as at
| Measured & Indicated | Inferred | |||||
| Mineral Resources | Mineral Resources | |||||
| (000 oz gold) | (000 oz gold) | |||||
| Northern Business | ||||||
| LaRonde | 767 | 1,251 | ||||
| Canadian Malartic (50%) | 625 | 213 | ||||
| Lapa | 155 | 302 | ||||
| Goldex | 2,075 | 1,211 | ||||
| Kittila | 1,548 | 1,764 | ||||
| Meadowbank | 720 | 441 | ||||
| Meliadine | 3,306 | 3,552 | ||||
| Amaruq | - | 3,283 | ||||
| Bousquet/Ellison | 969 | 917 | ||||
| Hammond Reef (50%) | 2,250 | 6 | ||||
| Upper Beaver (Kirkland Lake) (50%) | 901 | 659 | ||||
| Akasaba | 54 | - | ||||
| AK (Kirkland Lake) (50%) | 133 | 203 | ||||
| Other | 31 | 420 | ||||
| Subtotal | 13,535 | 14,221 | ||||
| Southern Business | ||||||
| Creston Mascota | 70 | 145 | ||||
| Pinos Altos | 655 | 505 | ||||
| La India | 828 | 1,068 | ||||
| El Barque?o | - | 608 | ||||
| Subtotal | 1,553 | 2,325 | ||||
| Total Mineral Resources | 15,089 | 16,546 |
NORTHERN BUSINESS REVIEW
ABITIBI REGION,
Agnico Eagle is currently
The 100% owned LaRonde mine in northwestern
The LaRonde mill processed an average of 6,128 tpd in the fourth quarter
of 2015, compared with an average of 5,847 tpd in the corresponding
period of 2014. Minesite costs per tonne were approximately
Milling performance for the full year 2015 was approximately 6,141 tpd,
compared to 5,713 tpd in 2014. Throughput in the 2014 period was lower
due primarily to the planned shutdowns for the installation of new
hoist drives to replace obsolete production and service hoist equipment
in the Penna shaft. Minesite costs per tonne for the full year 2015
were approximately
LaRonde's total cash costs per ounce on a by-product basis were
For the full year 2015, LaRonde's total cash costs per ounce on a
by-product basis were
In 2015, the LaRonde mine also produced approximately 3,501 tonnes of zinc (67% less than in 2014), 0.9 million ounces of silver (28% less than in 2014), and 4,941 tonnes of copper (1% less than in 2014) as by-products to the gold production. These totals are consistent with the change in the metals mix as the mine goes deeper and becomes more gold rich as opposed to zinc/silver rich in the upper levels. In 2016, approximately 89% of production is expected to come from the lower mine area (below the 248 level).
In 2015, work was completed on the installation of the coarse ore conveyor system that extends from the 293 level to the crusher on the 280 level. The new conveyor was commissioned in the fourth quarter and a new ore pass and silo designed to feed the conveyor system are expected to be commissioned in the second quarter of 2016. This new conveyor should help improve mining flexibility and reduce congestion in the deeper portions of the mine.
Studies are ongoing to assess the potential to extend the mineral reserve base and carry out mining activities between the 311 and 371 levels at LaRonde. At present, the mineral reserve base extends to the 311 level, which is 3.1 kilometres below the surface. In 2015, exploration drilling focused on the eastern portion of the LaRonde orebody down to the 371 level. As underground development progresses to the west, a key exploration focus in 2016 will be drill testing the western portion of the LaRonde orebody from the 311 to the 371 level.
The Company is also evaluating the potential to develop and mine the Bousquet Zone 5 on the adjoining Bousquet property. Previous property owners had partly exploited the Bousquet Zone 5 by open pit and underground, and Agnico Eagle is evaluating the potential to initially mine the Bousquet Zone 5 from a depth of 90 to 330 metres below surface via an underground ramp. The mining method is likely to be similar to that employed at Goldex, and processing could utilize excess capacity from the Lapa circuit at LaRonde. Dewatering of the old pit is underway and permit applications to collect a bulk sample will be submitted shortly. An internal technical study is expected to be completed by the end of 2016.
In
During the fourth quarter of 2015, the Canadian Malartic mill processed
an average of 52,780 tpd (on a 100% basis) compared with an average of
53,232 tpd in the corresponding period of 2014. Minesite costs per
tonne were approximately
For the full year 2015, the Canadian Malartic mill processed an average
of 52,300 tpd compared with an average of 51,248 tpd in 2014 (on a 100%
basis). Minesite costs per tonne were approximately
For the fourth quarter of 2015, Agnico Eagle's share of production at
the Canadian Malartic mine was 72,872 ounces of gold at total cash
costs per ounce on a by-product basis of
For the full year 2015, Agnico Eagle's share of production at the
Canadian Malartic mine was 285,809 ounces of gold at total cash costs
per ounce on a by-product basis of
Future Opportunities - Continuing to Look to Further Optimize Operations
Since acquiring the mine in
Several other opportunities have been identified to further optimize productivity, including:
- Improvements to SAG mill liners in order to reduce the number of major shutdowns to three from four
-
Higher North Zone performance with the purchase of an additional remote control production back hoe. This should result in higher grade ore being brought to the mill
- Cost savings opportunities: primarily on explosives and contractors
- Ongoing continuous improvement projects
Ounce reconciliation with the block model continues to be positive (approximately 5% higher) and is an opportunity to provide additional production flexibility going forward.
Permitting activities for the Barnat extension and deviation of
Public hearings are expected to be held later in 2016. Granting of final permits is expected to occur after the completion of the public consultation process. In parallel, the Partnership is currently working on permitting for improving the efficiency and environmental performance of the existing mobile crusher.
Odyssey and Near Pit Targets Could Provide Future Production Upside
At the Canadian Malartic mine, exploration programs are planned to evaluate a number of near pit/underground targets at the mine and further define the extent of the mineralization at the Odyssey zone (which is located to the east of the Canadian Malartic open pit). Both of these opportunities could provide new potential sources of ore for the Canadian Malartic mill.
At Odyssey, 44 holes (a total of 35,870 metres) were drilled in 2015. Exploration to date has outlined two mineralized zones: Odyssey North and Odyssey South. Odyssey North has been traced from a depth of 550 to 1,200 metres below the surface and along approximately 1,500 metres of strike length. Odyssey South is approximately 200 to 550 metres below surface with an approximate strike length of 1,500 metres. Gold occurs along the margins of a porphyry body in both zones. Plan and three dimensional views of the Odyssey mineralization are shown below.
[Plan View Showing Odyssey Zones and Near Pit/Underground opportunities at Canadian Malartic]
In 2016, the Canadian Malartic block model will be reviewed to further define the potential of the near pit targets and a 60,000 metre drill program has been proposed to further evaluate the extent of the mineralization at Odyssey.
CMC Exploration Activities -
Pandora and Kirkland Lake are focus areas
In addition to joint, indirect ownership of the Canadian Malartic mine,
Agnico Eagle and Yamana are also jointly exploring a portfolio of
properties in the
In 2015, approximately 960 metres of underground drifting was carried out on the Pandora project from a track drift developed from the Lapa mine. In addition, 34 surface holes (a total of 19,200 metres) and 13 underground holes (a total of approximately 7,900 metres) were drilled to test the C Zone and Branch Zone targets. Results have been encouraging, and additional underground development and 10,400 metres of drilling is planned in 2016.
The proposed budget for Pandora in 2016 (100% basis) is approximately
In
This new drilling has been incorporated into a new mineral resource
estimate for the AK property which is included in Agnico Eagle's
The proposed budget for
Lapa - Strong 2015 Performance, Limited Mine Life in 2016 but Exploration Could Provide Additional Upside
The 100% owned Lapa mine in northwestern
The Lapa circuit, located at the LaRonde mill, processed an average of 1,478 tpd in the fourth quarter of 2015. This compares with an average of 1,760 tpd in the fourth quarter of 2014. The reduced throughput in the 2015 period was largely due to lower mill availability resulting from electrical and mechanical issues with the Lapa ball mill.
Minesite costs per tonne were
Milling performance for the full year 2015 was approximately 1,534 tpd
compared to 1,750 tpd in 2014. Throughput in the 2015 period was lower
primarily due to downtime related to repairs carried out on the Lapa
ball mill in the third and fourth quarters. Full-year minesite costs
in 2015 were
Payable production in the fourth quarter of 2015 was 19,929 ounces of
gold at total cash costs per ounce on a by-product basis of
For the full year 2015, payable production was 90,967 ounces of gold at
total cash costs per ounce on a by-product basis of
Under the current life of mine plan, Lapa is only expected to operate until early into the fourth quarter of 2016. Two areas (Zone 8 East - Upper mine and the Zulapa 7 - Deep 2 Zone) have been identified through exploration as areas that could potentially support future mining activity post 2017. However, additional exploration is required, and any potential production from these areas would likely require synergies with other production opportunities such as the Bousquet Zone 5 or the Pandora project.
The LaRonde mine has now assumed responsibilities for the management and administration of the Lapa mine and progressive transfers of Agnico Eagle personnel from Lapa are now underway throughout the Company.
Goldex - Record Underground Ore Hoisting in Q4 2015, Trend Could Continue into 2016
The 100% owned Goldex mine in northwestern
During the fourth quarter of 2015, the Goldex mine had record underground ore hoisting of 7,273 tpd. Although not currently built into the 2016 production forecast, the Company believes that there is potential for continued strong underground performance in 2016. Should this performance be sustainable, the Company will evaluate the potential to increase mill throughput (current mill capacity is approximately 8,000 tpd).
The Goldex mill processed an average of 6,213 tpd in the fourth quarter
of 2015 compared to 6,251 tpd in the fourth quarter of 2014, which was
similar to prior-year levels. Minesite costs per tonne were
approximately
For the full year 2015, the Goldex mill averaged 6,336 tpd, which
compares to 5,799 tpd in the corresponding period of 2014. The higher
throughput in the 2015 period was largely due to accelerated mining
levels compared to the 2014 period. Full-year minesite costs per tonne
in 2015 were
Payable production in the fourth quarter of 2015 was 27,646 ounces of
gold at total cash costs per ounce on a by-product basis of
For the full year 2015, payable production was 115,426 ounces of gold at
total cash costs per ounce on a by-product basis of
Rehabilitation of the surface ramp has been completed which provides increased operational flexibility. This ramp also provides access to the M2 and M5 satellite zones for conversion drilling and development later this year.
The exploration ramp into the DX Zone (the top of the Deep Zone) has reached the 120 level, which is the proposed bottom of the Deep 1 development phase. Underground development in the Deep 1 Zone will now shift to excavation of the various sublevels needed for mining development and excavation of the conveyor ramp.
Studies are underway to evaluate the potential to increase throughput from the Deep 1 Zone, and the potential to mine a portion of the Deep 2 Zone, both of which could enhance production levels or extend the current mine life at Goldex and reduce operating costs.
In
FINLAND AND SWEDEN
Agnico Eagle's Kittila mine in
Kittila - Strong Mining Performance in Q4 2015 and
The 100% owned Kittila mine in northern
The focus at Kittila in 2015 was on improving mill reliability. Several projects were carried out in the fourth quarter of 2015 which appear to have improved maintenance performance. With further optimization, the Company believes that there is potential for improved mill availability, which could lead to higher throughput levels (possibly up to 20% higher) in the future.
The Kittila mill processed an average of 4,100 tpd in the fourth quarter
of 2015 compared to the 3,980 tpd in the fourth quarter of 2014. The
underground performed very well in the fourth quarter resulting in
record average daily throughput of 4,750 tpd in
Minesite costs per tonne at Kittila were approximately €80 in the fourth quarter of 2015, compared to €75 in the fourth quarter of 2014. Costs increased in the fourth quarter of 2015 due to the increased usage of consumables, higher contractor costs and increased underground development costs when compared with the 2014 period.
For the full year 2015, the mill processed an average of 4,011 tpd, as
compared with 2014 when the mill processed an average of 3,168 tpd. The increase in throughput was a result of the completion of the mill
expansion at the end of
Fourth quarter 2015 payable production at Kittila was 44,279 ounces of
gold with total cash costs per ounce on a by-product basis of
For the full year 2015, payable production from Kittila was 177,374
ounces of gold at total cash costs per ounce on a by-product basis of
Previous drilling on the Rimpi Zone at Kittila has outlined a significant zone of mineralization with potentially wider widths and better grades than those currently being mined. The main underground ramp at Kittila is being extended to reach the deeper portions of the Rimpi Zone and it is also providing further underground drill access to test for additional depth extensions of the Rimpi, Suuri, Roura and the newly discovered Sisar mineralized zones.
In addition, a surface ramp is being driven into the Rimpi Zone (now at a depth of 190 metres below surface) for production purposes and to provide a second egress for the Suuri ramp system. It will serve as the main haulage route from the deeper portions of both Rimpi and Suuri and, potentially, the Sisar Zone.
At the Kuotko deposit, located approximately 15 kilometres north of Kittila, approximately 7,300 metre of drilling was completed in 2015. New mineralized zones have been identified outside of the known mineral resource areas. Metallurgical testing is also ongoing and studies are being carried out to assess the viability of mining the deposit as a satellite open pit.
In 2015, a new zone of mineralization, known as the Sisar Zone, was discovered by exploration drilling from the underground ramp being driven towards the deeper portion of the Rimpi Zone. The Sisar Zone is located to the east of the main Kittila ore zone, and in close proximity to existing underground infrastructure. The Sisar Zone could potentially provide an additional source of underground ore to the Kittila mill with relatively little additional underground development, should further drilling outline an economic deposit. This new zone is discussed in further detail below.
Inferred mineral resources at Kittila as of
Inferred mineral resources at the Kittila mine as of
| Category | Gold | Gold (oz) | Tonnes | |||||||
| (g/t) | (x000) | (x000) | ||||||||
| Inferred Mineral Resources (Underground) | ||||||||||
| Sisar Zone | 5.91 | 651 | 3,423 | |||||||
| Main and all other zones | 4.12 | 1,113 | 8,409 | |||||||
| Total Inferred Mineral Resources | 4.64 | 1,764 | 11,833 |
With the potential for higher mill capacity through ongoing optimization, development of the Rimpi and Sisar Zones could result in increased future production levels and reduced operating costs at Kittila.
New Parallel Sisar Zone Extends Above and Below Previous Intercepts
Recent holes drilled from the exploration ramp have extended the Sisar Zone upward, downward and to the north, including two intercepts that are lower than any previous intercepts on the Kittila property. The table below shows the intercepts of three new holes and two previously released holes. Pierce points for all these holes are shown on the Kittila composite longitudinal section and two cross sections (100 metres apart). All intercepts reported for the Kittila mine show uncapped grades over estimated true widths, based on a current geological interpretation that is being updated as new information becomes available with further drilling.
Recent exploration drill results from the Kittila mine
| Drill hole | Zone |
From (metres) |
To (metres) |
Depth of midpoint below surface (metres) |
Estimated true width (metres) |
Gold grade (g/t) (uncapped) |
| ROD14-004F* | Main | 839.5 | 870.0 | 1,550 | 10.0 | 5.3 |
| RIE15-601 | Sisar | 190.6 | 201.0 | 811 | 9.6 | 8.0 |
| and | Sisar | 223.0 | 227.0 | 811 | 3.7 | 3.6 |
| RIE15-605 | Sisar | 238.4 | 242.2 | 894 | 3.2 | 4.0 |
| and | Sisar | 261.0 | 266.9 | 902 | 5.3 | 4.8 |
| and | Sisar | 282.7 | 318.0 | 915 | 27.0 | 4.9 |
| ROU15-603** | Sisar | 323.0 | 338.0 | 977 | 13.3 | 5.2 |
| ROD15-704D | Sisar | 1,221.8 | 1,279.2 | 1,879 | 27.5 | 6.5 |
| including | 1,230.1 | 1,243.2 | 1,870 | 6.2 | 10.1 | |
| including | 1,250.2 | 1,267.0 | 1,885 | 8.1 | 8.8 | |
| and | Sisar | 1,294.9 | 1,300.0 | 1,909 | 2.5 | 4.9 |
* Hole ROD14-004F previously reported in Company news release dated
** Hole ROU15-603 previously reported in Company news release dated
[Kittila composite longitudinal section]
[Kittila composite cross sections - 7538600mN and 7538700mN]
Hole RIE15-601 was drilled essentially horizontally from a drill station on the main exploration ramp toward the east, and intersected mineralization in two places with midpoints at 811 metres below surface; the first intercept was 8.0 g/t gold over 9.6 metres and the second was 3.6 g/t gold over 3.7 metres. These are the shallowest intercepts to date in the Sisar Zone, almost 140 metres shallower than any previous intercepts in this lens.
Hole RIE15-605 intersected the Sisar Zone approximately 90 metres deeper
than RIE15-601 and slightly to the north. RIE15-605 had three
mineralized intercepts between 894 and 915 metres depth of which the
best was 4.9 g/t gold over 27.0 metres at 915 metres depth. This
intercept is 150 metres farther north than the previous northernmost
Sisar intercept (hole ROU15-603 which intersected 5.2 g/t gold over
13.3 metres at 977 metres depth, previously reported in Company news
release dated
From an underground drill station 100 metres to the south, hole ROD15-704D intersected a deep extension of the Sisar Zone in two places, approximately 300 metres to the east of the interpreted location of the main ore zone. The first intercept graded 6.5 g/t gold over 27.5 metres at 1,879 metres below surface, including 10.1 g/t gold over 6.2 metres and 8.8 g/t gold over 8.1 metres. The second intercept graded 4.9 g/t gold over 2.5 metres at 1,909 metres below surface, which is 650 metres deeper than any previous intercepts in the Sisar Zone.
These two deep intercepts are interpreted to be within the Sisar Zone based on their location along the general strike and dip of the lens. Additional holes have been drilled to investigate the area above these deep intercepts, and assays are pending. Follow-up drilling to the north will continue to investigate this deep level, in the first half of 2016.
In addition, the lowermost intercept of hole ROD15-704D is 360 metres
deeper than the previous lowest intercept in the main Kittila ore zone
(which was hole ROD14-004F, previously reported in the Company's news
release dated
On
The Barsele property is known to contain intrusive-hosted gold
mineralization (similar to Goldex) and gold-rich volcanogenic massive
sulphide mineralization (similar to LaRonde). In 2015, the Company
spent approximately
In
Agnico Eagle has identified
Meadowbank - Improved Mining Rates Could Provide Additional Flexibility Through 2018
The 100% owned Meadowbank mine in
The Meadowbank mill processed an average of 11,168 tpd in the fourth quarter of 2015, compared to the 11,160 tpd achieved in the fourth quarter of 2014. For the full year 2015, the Meadowbank mill processed an average of 11,049 tpd, compared to 11,313 tpd in the full year 2014. Mill throughput for the fourth quarter of 2015 was similar to the comparable period of 2014. Year-over-year mill throughput levels were slightly lower due to the hardness profile of the Vault ore processed.
Minesite costs per tonne were a record low
Payable production in the fourth quarter of 2015 was 102,580 ounces of
gold at total cash costs per ounce on a by-product basis of
Full year 2015 payable production was 381,804 ounces of gold at total
cash costs per ounce on a by-product basis of
In
The Company is actively exploring the Amaruq deposit (see section below) with the goal of potentially developing the deposit as a satellite operation to Meadowbank.
Agnico Eagle has a 100% interest in the Amaruq project. The large property consists of 114,761 hectares, approximately 50 kilometres northwest of the Meadowbank mine.
The Amaruq drill program was completed in
Results from all of the holes have been included in the 2015 inferred
mineral resource estimate, but assays from several holes were received
after the Company last reported drill results in its
In
The new inferred mineral resource estimate as of
Since the
Selected late 2015 drill holes are set out in the table below, and their
collars are located on the Amaruq Local Geology Map. The Whale Tail
composite longitudinal section (below) shows the location of the
resources in the Whale Tail as of
[Whale Tail Deposit Composite Longitudinal Section]
Whale Tail Ore Shoot
Additional drilling was conducted to continue to expand the high-grade ore shoot within the Whale Tail deposit. The ore shoot was traced over an additional 100 metres of strike length, with hole AMQ15-475 representing the eastern-most mineralized interval within the ore shoot. This hole intersected 8.1 g/t gold over 5.9 metres at 429 metres depth. The high-grade ore shoot remains open to the east. Hole AMQ15-511 yielded 5.8 g/t gold over 10.7 metres at 415 metres depth in the central area of the deposit which remains open at depth. The deepest significant interval came from hole AMQ15-536 and returned 11.8 g/t gold over 4.8 metres at 600 metres depth enhancing the potential for an underground operation under the open pit in the future.
IVR Zone
The IVR Zone appears to be a different style of mineralization than the Whale Tail deposit. IVR is dominated by shear-zone-hosted, boudinaged quartz veins with high gold grades and frequent coarse-grained visible gold (now referred to as the "V-type shear zones" because they are typical of the V Zone mineralization).
Recent drilling and mapping has shown that the V zone is a significant mineralized structure dipping shallowly to the southeast. The structure has been identified from outcrop on surface to a depth of 155 metres in recent drilling and over a lateral strike length of 570 metres; it remains open at depth and laterally. Recent results include hole AMQ15-451 that intersected 7.2 g/t gold over 10.4 metres at 136 metres depth, hole AMQ15-544 that intersected 33.6 g/t gold over 3.3 metres at 56 metres depth, and hole AMQ15-549 that intersected 15.4 g/t gold over 3.0 metres at 62 metres depth.
Whale Tail - Mammoth Target Area
Further drilling completed in the western extension of Whale Tail allowed the Company to better understand the relationship between stratigraphic and structural controls in that area. Preliminary observations suggest that the strongest mineralization on the west side of Whale Tail is hosted by a different iron formation sequence that is slightly to the north of the sequence that hosts most of the Whale Tail mineralization. This area offers potential to further expand the in-pit resources towards the west. Hole AMQ15-507 intersected 5.4 g/t gold over 12.4 metres at 79 metres depth. The area requires more drilling in 2016.
Additional 2015 exploration drill results from the Whale Tail (WT) deposit and the V Zone area, Amaruq project
| Drill hole | Location |
From (metres) |
To (metres) |
Depth of midpoint below surface (metres) |
Estimated true width (metres) |
Gold grade (g/t) (uncapped) |
Gold grade (g/t) (capped)* |
| AMQ15-451 | V zone | 159.3 | 171.1 | 136 | 10.4 | 7.9 | 7.2 |
| including | 159.3 | 163.0 | 133 | 3.3 | 22.8 | 20.5 | |
| AMQ15-475 | WT Shoot | 521.0 | 529.4 | 429 | 5.9 | 8.1 | 8.1 |
| AMQ15-507 | WT/Mammoth | 100.8 | 120.1 | 79 | 12.4 | 5.4 | 5.4 |
| including | 115.2 | 120.1 | 84 | 3.1 | 8.1 | 8.1 | |
| AMQ15-511 | WT Shoot | 501.9 | 515.0 | 415 | 10.7 | 5.8 | 5.8 |
| including | 504.8 | 510.0 | 413 | 4.5 | 9.9 | 9.9 | |
| AMQ15-536 | WT deep | 689.8 | 698.1 | 600 | 4.8 | 11.8 | 11.8 |
| including | 693.0 | 698.1 | 602 | 2.9 | 16.7 | 16.7 | |
| AMQ15-544 | V zone | 68.4 | 71.8 | 56 | 3.3 | 71.0 | 33.6 |
| AMQ15-549 | V zone | 76.5 | 81.2 | 62 | 3.0 | 15.4 | 15.4 |
*Holes at Amaruq use a capping factor of 60 g/t gold.
Amaruq project exploration drill collar coordinates of selected holes from the IVR Zone
| Drill collar coordinates* | |||||||||||||||
| Drill hole ID | UTM North | UTM East |
Elevation (metres above sea level) |
Azimuth |
Dip (degrees) |
Length (metres) |
|||||||||
| AMQ15-451 | 7256248 | 607070 | 155 | 321 | -54 | 249 | |||||||||
| AMQ15-544 | 7256355 | 607151 | 156 | 322 | -53 | 201 | |||||||||
| AMQ15-549 | 7256446 | 607272 | 156 | 324 | -54 | 240 | |||||||||
* Coordinate System UTM Nad 83 zone 14
The first phase of a planned 75,000-metre drill program (costing
approximately
In late 2015, the Company received approvals for the construction of an all-weather access road linking the Amaruq site to the Meadowbank mine. In 2016 the Company expects to carry out additional engineering and begin road preparation from the Vault pit at Meadowbank.
Engineering and environmental baseline studies are underway to support the permitting process for the Amaruq project as a potential satellite open pit operation to the Meadowbank mine. The most recent drilling at depth in Whale Tail also indicates that this deposit hosts high-grade intercepts below the preliminary ultimate pit shell, suggesting that Whale Tail has underground potential. As such, permit applications for an underground exploration ramp will also be submitted in 2016.
Meliadine - Moderate 2016 Capital Expenditures Preserves Production Optionality
Located near
In 2015, capital expenditures at Meliadine were approximately
The technical study was based on extracting only the 3.3 million ounces
of gold in proven and probable mineral reserves at
At
The updated technical study forecast average annual production of
approximately 350,000 ounces at a life-of-mine total cash costs per
ounce on a by-product basis of approximately
The capital budget for 2016 is
Internal studies are ongoing to evaluate the potential to extract additional ounces of gold from the Tiriganiaq and Wesmeg/Normeg deposits, which could potentially extend the mine life, increase annual production, and improve the project economics and the after-tax internal rate of return. These studies are expected to be completed in the third quarter of 2016.
In
On
The timing of future capital expenditures on the Meliadine project beyond 2016 and the determination of whether to build a mine at Meliadine are subject to approval by Agnico Eagle's Board of Directors, which will be based on prevailing market conditions and outcomes of the various potential scenarios being evaluated.
Acquisition of
Agnico Eagle is currently studying options and alternatives in
In summer 2015, an airborne VTEM magnetic and electromagnetic survey was flown over the new properties. A field crew initiated prospecting and sampling of areas with geophysical signatures typical of iron formation-hosted Archean/Proto-Proterozoic deposits, similar to those recognized at Meadowbank, Amaruq and Meliadine projects. Close to 800 rock samples have been collected from the properties. Initial results have identified a 2-kilometre-long structure from which 21 rock samples returned values above 1.0 g/t gold including seven values in excess of 10.0 g/t gold, with a maximum value of 42.0 g/t gold.
The new properties appear to be geologically similar to the Meadowbank, Meliadine and Amaruq projects where the Company's exploration team has demonstrated the effectiveness of a systematic exploration approach and the strong mineral potential of this part of Nunavut. Assembling and analyzing the data collected this summer will assist in preparing a drill program for 2016 to further investigate the higher potential areas on the new properties.
SOUTHERN BUSINESS REVIEW
Agnico Eagle's Southern Business operations are focused in
The 100% owned
The
Minesite costs per tonne at
For the full year 2015, the
Payable production in the fourth quarter of 2015 was 44,496 ounces of
gold at total cash costs per ounce on a by-product basis of
For the full year 2015,
The
Creston Mascota - Record Annual Tonnes Stacked
The Creston Mascota heap leach has been operating as a satellite
operation to the
Approximately 529,000 tonnes of ore were stacked on the Creston Mascota
leach pad during the fourth quarter of 2015, compared to approximately
550,800 tonnes stacked in the fourth quarter of 2014. In the 2015
period, crusher throughput was slightly lower due to cold weather
conditions which created minor ore handling issues. Minesite costs per
tonne at Creston Mascota were
For the full year 2015, approximately 2,098,800 tonnes of ore were
stacked on the Creston Mascota leach pad, compared to approximately
1,793,800 tonnes stacked in the full year 2014. In the 2015 period,
additional ore was encountered outside the block model, which resulted
in more tonnes being stacked in the first half of the year compared to
the 2014 period. Minesite costs per tonne at Creston Mascota were
Payable production at Creston Mascota in the fourth quarter of 2015 was
13,933 ounces of gold at total cash costs per ounce on a by-product
basis of
Payable production for the full year 2015 totaled 54,703 ounces of gold
at total cash costs per ounce on a by-product basis of
In fourth quarter of 2015, work on the Phase 4 leach pad advanced with construction activities focused on earthworks, drainages, peripheral roads and water diversion channels. Overall, the project is 50% constructed with full completion expected later in 2016.
As reported in the Company's
La
The La India mine in
Approximately 1,439,500 tonnes of ore were stacked on the La India leach
pad during the fourth quarter of 2015, compared to approximately
1,426,700 tonnes stacked in the fourth quarter of 2014. Minesite costs
per tonne at La India were
For the full year 2015, approximately 5,371,400 tonnes of ore were
stacked on the La India leach pad compared to approximately 4,773,200
tonnes stacked in the full year 2014. Minesite costs per tonne at La
Payable production at La India in the fourth quarter of 2015 was 23,432
ounces of gold at total cash costs per ounce on a by-product basis of
Payable production for the full year 2015 totaled 104,362 ounces of gold
at total cash costs per ounce on a by-product basis of
In the fourth quarter of 2015, construction for the leach pad expansion (earthworks and liner installation) was finished within budget and haul road construction and preparation activities for the start-up of mining at the Main Zone pit were also completed.
Additional drilling was carried out at La India in 2015, with a focus on
extending mineralization in the Main Zone and the La India Zone and
conversion of sulfide mineralization into mineral reserves and mineral
resources. In addition, drilling was also carried out on a portion of
the
The 2015 exploration program resulted in a 28% increase in mineral
reserves, and a 21% increase in measured and indicated mineral
resources (see "Detailed Mineral Reserve and Mineral Resource Data (as
at
El Barque?o - Drilling Continues with a Focus on Mineral Resource Delineation and Defining New Target Areas
Agnico Eagle has a 100% interest in the El Barque?o project. The
32,840-hectare property is in the
The El Barque?o project contains a number of known mineralized zones and
several prospects that require further evaluation. The project was a
major exploration focus for the Company in 2015, with a total of 279
holes (a total of 69,522 metres) drilled in the
Exploration expenditures at El Barque?o in 2016 are budgeted at
The project's gold-silver deposits could potentially be developed into a
series of open pits utilizing heap leach processing, similar to
Annual General Meeting
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining company that has produced
precious metals since 1957. Its eight mines are located in
Note Regarding Certain Measures of Performance
This news release discloses certain measures, including ''total cash
costs per ounce'' and ''minesite costs per tonne'', "all-in sustaining
costs per ounce" and "adjusted net income" that are not recognized
measures under IFRS. These data may not be comparable to data
presented by other gold producers. For a reconciliation of these
measures to the most directly comparable financial information
presented in the consolidated financial statements prepared in
accordance with IFRS and for an explanation of how management uses
these measures, other than adjusted net income, see "Reconciliation of
Non-GAAP Financial Performance Measures" below. The total cash costs
per ounce of gold produced is reported on both a by-product basis
(deducting by-product metal revenues from production costs) and
co-product basis (before by-product metal revenues). The total cash
costs per ounce of gold produced on a by-product basis is calculated by
adjusting production costs as recorded in the consolidated statements
of income (loss) for by-product revenues, unsold concentrate inventory
production costs, smelting, refining and marketing charges and other
adjustments, and then dividing by the number of ounces of gold
produced. The total cash costs per ounce of gold produced on a
co-product basis is calculated in the same manner as the total cash
costs per ounce of gold produced on a by-product basis except that no
adjustment is made for by-product metal revenues. Accordingly, the
calculation of total cash costs per ounce of gold produced on a
co-product basis does not reflect a reduction in production costs or
smelting, refining and marketing charges associated with the production
and sale of by-product metals. The total cash costs per ounce of gold
produced is intended to provide information about the cash-generating
capabilities of the Company's mining operations. Management also uses
these measures to monitor the performance of the Company's mining
operations. As market prices for gold are quoted on a per ounce basis,
using the total cash costs per ounce of gold produced on a by-product
basis measure allows management to assess a mine's cash-generating
capabilities at various gold prices. All-in sustaining costs per ounce
is used to show the full cost of gold production from current
operations. The Company calculates all-in sustaining costs per ounce
of gold produced on a by-product as the aggregate of total cash costs
per ounce on a by-product basis, sustaining capital expenditures
(including capitalized exploration), general and administrative
expenses (including stock options) and reclamation expenses divided by
the amount of gold produced. The all-in sustaining costs per ounce of
gold produced on a co-product basis is calculated in the same manner as
the all-in sustaining costs per ounce of gold produced on a by-product
basis except that the total cash costs per ounce on a co-product basis
is used, meaning no adjustment is made for by-product metal revenues. The Company's methodology for calculating all-in sustaining costs per
ounce may differ from to the methodology used by other producers that
disclose all-in sustaining costs per ounce. The Company may change the
methodology it uses to calculate all-in sustaining costs per ounce in
the future, including in response to the adoption of formal industry
guidance regarding this measure by the
Management also performs sensitivity analyses in order to quantify the effects of fluctuating exchange rates and metal prices. This news release also contains information as to estimated future total cash costs per ounce, all-in sustaining costs per ounce and minesite costs per tonne. The estimates are based upon the total cash costs per ounce, all-in sustaining costs per ounce and minesite costs per tonne that the Company expects to incur to mine gold at its mines and projects and, consistent with the reconciliation of these actual costs referred to above, 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 IFRS measure.
Forward-Looking Statements
The information in this news release has been prepared as at
Notes to Investors Regarding the Use of Mineral Resources
Cautionary Note to Investors Concerning Estimates of Measured and Indicated Mineral Resources
This document uses the terms "measured mineral resources" and "indicated
mineral resources". Investors are advised that while those terms are
recognized and required by Canadian regulations, the
Cautionary Note to Investors Concerning Estimates of Inferred Mineral Resources
This document also uses the term "inferred mineral resources". Investors are advised that while this term is recognized and required
by Canadian regulations, the
Scientific and Technical Data
The scientific and technical information contained in this news release
relating to
Tim Haldane, P.Eng., Senior Vice-President, Operations -
The scientific and technical information relating to Agnico Eagle's
mineral reserves and mineral resources contained herein (other than the
Canadian Malartic mine) has been approved by Daniel Doucet, Eng.,
Senior Corporate Director,
Donald Gervais, P.Geo., Director of Technical Services at CMC. Each of them is a "Qualified Person" for the purposes of NI 43-101.
Detailed Mineral Reserve and Mineral Resource Data (as at
| Au | Ag | Cu | Zn | Pb | Au | Tonnes | ||
| Category and Operation | (g/t) | (g/t) | (%) | (%) | (%) | (000s oz) | (000s) | |
| Proven Mineral Reserve | ||||||||
| Northern Business | ||||||||
| LaRonde (underground) | 4.09 | 21.19 | 0.27 | 0.44 | 0.05 | 454 | 3,455 | |
| Canadian Malartic (open pit) (50%) | 0.97 | 860 | 27,446 | |||||
| Lapa (underground) | 5.49 | 78 | 444 | |||||
| Goldex (underground) | 1.54 | 15 | 300 | |||||
| Kittila (open pit) | 3.52 | 20 | 176 | |||||
| Kittila (underground) | 4.43 | 126 | 883 | |||||
| Kittila Total Proven | 4.28 | 146 | 1,059 | |||||
| Meadowbank (open pit) | 1.51 | 58 | 1,203 | |||||
| Meliadine (open pit) | 7.31 | 8 | 34 | |||||
| Southern Business | ||||||||
| Pinos Altos (open pit) | 2.07 | 67.48 | 11 | 164 | ||||
| Pinos Altos (underground) | 3.14 | 83.46 | 263 | 2,605 | ||||
| Pinos Altos Total Proven | 3.08 | 82.51 | 274 | 2,769 | ||||
| Creston Mascota (open pit) | 0.68 | 8.05 | 4 | 187 | ||||
| La India (open pit) | 0.68 | 12.69 | 5 | 244 | ||||
| Subtotal Proven Mineral Reserve | 1.59 | 1,903 | 37,141 | |||||
| Probable Mineral Reserve | ||||||||
| Northern Business | ||||||||
| LaRonde (underground) | 5.59 | 19.39 | 0.23 | 0.90 | 0.04 | 2,654 | 14,765 | |
| Canadian Malartic (open pit) (50%) | 1.12 | 3,002 | 83,320 | |||||
| Lapa (underground) | - | - | ||||||
| Goldex (underground) | 1.61 | 653 | 12,644 | |||||
| Akasaba (open pit) | 0.92 | 0.52 | 141 | 4,759 | ||||
| Kittila (open pit) | 3.64 | 18 | 157 | |||||
| Kittila (underground) | 4.83 | 4,189 | 26,979 | |||||
| Kittila Total Probable | 4.82 | 4,208 | 27,136 | |||||
| Meadowbank (open pit) | 2.87 | 885 | 9,586 | |||||
| Meliadine (open pit) | 5.00 | 644 | 4,001 | |||||
| Meliadine (underground) | 8.20 | 2,766 | 10,494 | |||||
| Meliadine Total Probable | 7.32 | 3,410 | 14,495 | |||||
| Southern Business | ||||||||
| Pinos Altos (open pit) | 2.54 | 71.21 | 281 | 3,440 | ||||
| Pinos Altos (underground) | 2.95 | 72.83 | 904 | 9,527 | ||||
| Pinos Altos Total Probable | 2.84 | 72.40 | 1,185 | 12,967 | ||||
| Creston Mascota (open pit) | 1.33 | 12.21 | 172 | 4,026 | ||||
| La India (open pit) | 0.90 | 4.16 | 862 | 29,743 | ||||
| Subtotal Probable Mineral Reserve | 2.50 | 17,172 | 213,442 | |||||
| Northern Total Proven and Probable Mineral Reserves | 2.57 | 16,572 | 200,646 | |||||
| Southern Total Proven and Probable Mineral Reserves | 1.56 | 2,502 | 49,937 | |||||
| Total Proven and Probable Mineral Reserves | 2.37 | 19,075 | 250,583 | |||||
| Au | Ag | Cu | Zn | Pb | Tonnes | |
| Category and Operation | (g/t) | (g/t) | (%) | (%) | (%) | (000s) |
| Measured Mineral Resource | ||||||
| Northern Business | ||||||
| Canadian Malartic (open pit) (50%) | 1.32 | 1,752 | ||||
| Lapa (underground) | 5.33 | 49 | ||||
| Goldex (underground) | 1.86 | 12,360 | ||||
| Kittila (underground) | 2.58 | 991 | ||||
| Meadowbank (open pit) | 1.01 | 738 | ||||
| Hammond Reef (open pit) (50%) | 0.70 | 82,831 | ||||
| Southern Business | ||||||
| La India (open pit) | 0.25 | 2.48 | 8,339 | |||
| Subtotal Measured Mineral Resource | 0.83 | 107,059 | ||||
| Indicated Mineral Resource | ||||||
| Northern Business | ||||||
| LaRonde (underground) | 3.49 | 18.25 | 0.24 | 0.82 | 0.07 | 6,842 |
| Canadian Malartic (open pit) (50%) | 1.55 | 11,079 | ||||
| Lapa (underground) | 4.21 | 1,086 | ||||
| Goldex (underground) | 1.88 | 22,069 | ||||
| Akasaba | 0.60 | 0.33 | 2,828 | |||
| Kittila (open pit) | 2.90 | 72 | ||||
| Kittila (underground) | 3.05 | 14,863 | ||||
| Kittila Total Indicated | 3.05 | 14,935 | ||||
| Meadowbank (open pit) | 2.65 | 3,891 | ||||
| Meadowbank (underground) | 4.85 | 2,341 | ||||
| Meadowbank Total Indicated | 3.48 | 6,232 | ||||
| Meliadine (open pit) | 4.24 | 7,867 | ||||
| Meliadine (underground) | 5.38 | 12,911 | ||||
| Meliadine Total Indicated | 4.95 | 20,778 | ||||
| Bousquet (underground) | 2.47 | 11,380 | ||||
| Ellison (underground) | 3.25 | 646 | ||||
| Hammond Reef (open pit) (50%) | 0.57 | 21,377 | ||||
| AK (underground) (50%) | 6.51 | 634 | ||||
| Upper Beaver (underground) (50%) | 6.36 | 0.36 | 4,404 | |||
| Swanson (open pit) | 1.93 | 504 | ||||
| Southern Business | ||||||
| Pinos Altos (open pit) | 1.04 | 20.78 | 224 | |||
| Pinos Altos (underground) | 1.85 | 42.87 | 10,916 | |||
| Pinos Altos Total Indicated | 1.83 | 42.43 | 11,141 | |||
| Creston Mascota (open pit) | 0.51 | 5.14 | 4,264 | |||
| La India (open pit) | 0.38 | 0.55 | 61,950 | |||
| Subtotal Indicated Mineral Resource | 1.88 | 202,147 | ||||
| Northern Total Measured and Indicated Mineral Resources | 1.88 | 223,513 | ||||
| Southern Total Measured and Indicated Mineral Resources | 0.56 | 85,693 | ||||
| Total Measured & Indicated Mineral Resources | 1.52 | 309,206 | ||||
| Au | Ag | Cu | Zn | Pb | Tonnes | |
| Category and Operation | (g/t) | (g/t) | (%) | (%) | (%) | (000s) |
| Inferred Mineral Resource | ||||||
| Northern Business | ||||||
| LaRonde (underground) | 4.26 | 15.07 | 0.23 | 0.90 | 0.06 | 9,142 |
| Canadian Malartic (open pit) (50%) | 1.47 | 4,494 | ||||
| Lapa (open pit Zulapa) | 3.14 | 391 | ||||
| Lapa (underground) | 7.78 | 1,049 | ||||
| Lapa Total Inferred | 6.52 | 1,440 | ||||
| Goldex (underground) | 1.53 | 24,630 | ||||
| Akasaba (open pit) | - | |||||
| Kittila (open pit) | 3.89 | 373 | ||||
| Kittila (underground) | 4.66 | 11,460 | ||||
| Kittila Total Inferred | 4.64 | 11,833 | ||||
| Meadowbank (open pit) | 3.33 | 1,228 | ||||
| Meadowbank (underground) | 4.36 | 2,213 | ||||
| Meadowbank Total Inferred | 3.99 | 3,441 | ||||
| Amaruq (open pit) | 5.48 | 10,365 | ||||
| Amaruq (underground) | 6.96 | 6,515 | ||||
| Amaruq Total Inferred | 6.05 | 16,880 | ||||
| Meliadine (open pit) | 5.35 | 1,054 | ||||
| Meliadine (underground) | 7.68 | 13,656 | ||||
| Meliadine Total Inferred | 7.51 | 14,710 | ||||
| Bousquet (underground) | 4.00 | 5,373 | ||||
| Ellison (underground) | 4.03 | 1,746 | ||||
| Hammond Reef (open pit) (50%) | 0.74 | 251 | ||||
| AK (underground) (50%) | 5.32 | 1,187 | ||||
| Upper Beaver (underground) (50%) | 5.94 | 0.42 | 3,451 | |||
| Kuotko, Finland (open pit) | 2.89 | 1,823 | ||||
| Kylmakangas, Finland (underground) | 4.11 | 31.11 | 1,896 | |||
| Southern Business | ||||||
| Pinos Altos (open pit) | 0.95 | 22.38 | 10,703 | |||
| Pinos Altos (underground) | 2.96 | 68.95 | 1,877 | |||
| Pinos Altos Total Inferred | 1.25 | 29.33 | 12,580 | |||
| Creston Mascota (open pit) | 1.06 | 14.16 | 4,263 | |||
| La India (open pit) | 0.37 | 90,868 | ||||
| El Barque?o (open pit) | 0.96 | 5.78 | 0.19 | 19,658 | ||
| Northern Total Inferred Mineral Resource | 4.32 | 102,294 | ||||
| Southern Total Inferred Mineral Resource | 0.57 | 127,368 | ||||
| Total Inferred Mineral Resource | 2.24 | 229,662 | ||||
Tonnage amounts and contained metal amounts presented in this table have been rounded to the nearest thousand. Amounts presented in this table may not add up due to rounding. Mineral reserves are not a sub-set of mineral resources.
In prior periods, mineral reserves for all properties were typically
estimated using historic three-year average metals prices and foreign
exchange rates in accordance with the
The assumptions used for the mineral reserves estimate at the Canadian
Malartic mine as of
NI 43-101 requires mining companies to disclose mineral reserves and mineral resources using the subcategories of "proven mineral reserves", "probable mineral reserves", "measured mineral resources", "indicated mineral resources" and "inferred mineral 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 and/or indicated mineral resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility level as appropriate that include application of modifying factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified.
Modifying factors are considerations used to convert mineral resources to mineral reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.
A proven mineral reserve is the economically mineable part of a measured mineral resource. A proven mineral reserve implies a high degree of confidence in the modifying factors. A probable mineral reserve is the economically mineable part of an indicated and, in some circumstances, a measured mineral resource. The confidence in the modifying factors applying to a probable mineral reserve is lower than that applying to a proven mineral reserve.
A mineral resource is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.
A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with confidence sufficient to allow the application of modifying factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity.
Investors are cautioned not to assume that part or all of an inferred mineral resource exists, or is economically or legally mineable.
A feasibility study is a comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of applicable modifying factors together with any other relevant operational factors and detailed financial analysis that are necessary to demonstrate, at the time of reporting, that extraction is reasonably justified (economically mineable). The results of the study may reasonably serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance, the development of the project. The confidence level of the study will be higher than that of a Pre-Feasibility Study.
The mineral reserves presented in this news release are separate from and not a portion of the mineral resources.
|
Property/Project name and location |
Date of most recent Technical Report (NI 43-101) filed on SEDAR |
| LaRonde, Bousquet & Ellison, Quebec, Canada | March 23, 2005 |
| Canadian Malartic, Quebec, Canada | June 16, 2014 |
| Kittila, Kuotko and Kylmakangas, Finland | March 4, 2010 |
| Meadowbank, Nunavut, Canada | February 15, 2012 |
| Goldex, Quebec, Canada | October 14, 2012 |
| Lapa, Quebec, Canada | June 8, 2006 |
| Meliadine, Nunavut, Canada | February 11, 2015 |
| Hammond Reef, Ontario, Canada | July 2, 2013 |
| Upper Beaver (Kirkland Lake project), Ontario, Canada | November 5, 2012 |
| Pinos Altos and Creston Mascota, Mexico | March 25, 2009 |
| La India, Mexico | August 31, 2012 |
Additional information about each of the mineral projects that is required by NI 43-101, sections 3.2 and 3.3 and paragraphs 3.4 (a), (c) and (d) can be found in Technical Reports, which may be found at www.sedar.com. Other important operating information can be found in the Company's AIF and Form 40-F.
|
AGNICO EAGLE MINES LIMITED SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS (thousands of United States dollars, except where noted) (Unaudited) |
|||||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| Operating margin(i) by mine: | |||||||||||||
| Northern Business | |||||||||||||
| LaRonde mine | \\$ | 50,667 | \\$ | 33,535 | \\$ | 145,924 | \\$ | 120,058 | |||||
| Lapa mine | 12,363 | 16,060 | 52,214 | 54,198 | |||||||||
| Goldex mine | 17,108 | 20,693 | 72,567 | 60,738 | |||||||||
| Meadowbank mine | 64,664 | 39,839 | 216,334 | 305,032 | |||||||||
| Canadian Malartic mine(ii) | 38,059 | 39,092 | 161,807 | 75,984 | |||||||||
| Kittila mine | 15,174 | 14,312 | 80,262 | 59,627 | |||||||||
| Southern Business | |||||||||||||
| Pinos Altos mine | 29,327 | 27,123 | 145,734 | 128,441 | |||||||||
| Creston Mascota deposit at Pinos Altos | 9,919 | 8,392 | 40,194 | 31,566 | |||||||||
| La India mine(iii) | 15,832 | 16,727 | 75,101 | 56,563 | |||||||||
| Total operating margin(i) | 253,113 | 215,773 | 990,137 | 892,207 | |||||||||
| Amortization of property, plant and mine development | 157,129 | 139,095 | 608,609 | 433,628 | |||||||||
| Exploration, corporate and other | 76,963 | 74,390 | 298,900 | 269,441 | |||||||||
| Income before income and mining taxes | 19,021 | 2,288 | 82,628 | 189,138 | |||||||||
| Income and mining taxes expense | 34,558 | 23,571 | 58,045 | 106,168 | |||||||||
| Net income (loss) for the period | \\$ | (15,537) | \\$ | (21,283) | \\$ | 24,583 | \\$ | 82,970 | |||||
| Net income (loss) per share — basic (US\\$) | \\$ | (0.07) | (0.10) | \\$ 0.11 | 0.43 | ||||||||
| Net income (loss) per share — diluted (US\\$) | \\$ | (0.07) | (0.12) | \\$ 0.11 | 0.39 | ||||||||
| Cash flows: | |||||||||||||
| Cash provided by operating activities | \\$ | 140,747 | \\$ | 163,956 | \\$ | 616,238 | \\$ | 668,324 | |||||
| Cash used in investing activities | \\$ | (115,786) | \\$ | (123,126) | \\$ | (374,519) | \\$ | (851,619) | |||||
| Cash provided by (used in) financing activities | \\$ | (100,460) | \\$ | (18,685) | \\$ | (280,760) | 229,236 | ||||||
| Realized prices (US\\$): | |||||||||||||
| Gold (per ounce) | \\$ | 1,094 | \\$ | 1,202 | \\$ | 1,156 | \\$ | 1,261 | |||||
| Silver (per ounce) | \\$ | 14.56 | \\$ | 15.60 | \\$ | 15.63 | \\$ | 18.27 | |||||
| Zinc (per tonne) | \\$ | 1,602 | \\$ | 2,216 | \\$ | 1,875 | \\$ | 2,224 | |||||
| Copper (per tonne) | \\$ | 4,568 | \\$ | 5,961 | \\$ | 5,023 | \\$ | 6,596 | |||||
| Payable production(iv): | |||||||||||||
| Gold (ounces): | |||||||||||||
| Northern Business | |||||||||||||
| LaRonde mine | 73,161 | 59,316 | 267,921 | 204,652 | |||||||||
| Lapa mine | 19,929 | 25,611 | 90,967 | 92,622 | |||||||||
| Goldex mine | 27,646 | 29,463 | 115,426 | 100,433 | |||||||||
| Meadowbank mine | 102,580 | 86,715 | 381,804 | 452,877 | |||||||||
| Canadian Malartic mine(ii) | 72,872 | 66,369 | 285,809 | 143,008 | |||||||||
| Kittila mine | 44,279 | 43,130 | 177,374 | 141,742 | |||||||||
| Southern Business | |||||||||||||
| Pinos Altos mine | 44,496 | 40,669 | 192,974 | 171,019 | |||||||||
| Creston Mascota deposit at Pinos Altos | 13,933 | 12,989 | 54,703 | 47,842 | |||||||||
| La India mine(iii) | 23,432 | 23,273 | 104,362 | 75,093 | |||||||||
| Total gold (ounces) | 422,328 | 387,535 | 1,671,340 | 1,429,288 | |||||||||
| Silver (thousands of ounces): | |||||||||||||
| Northern Business | |||||||||||||
| LaRonde mine | 296 | 357 | 916 | 1,275 | |||||||||
| Lapa mine | 1 | - | 4 | - | |||||||||
| Meadowbank mine | 29 | 49 | 221 | 134 | |||||||||
| Canadian Malartic mine(ii) | 83 | 75 | 300 | 151 | |||||||||
| Kittila mine | 4 | 3 | 11 | 7 | |||||||||
| Southern Business | |||||||||||||
| Pinos Altos mine | 640 | 424 | 2,384 | 1,731 | |||||||||
| Creston Mascota deposit at Pinos Altos | 50 | 28 | 159 | 88 | |||||||||
| La India mine(iii) | 55 | 67 | 263 | 178 | |||||||||
| Total Silver (thousands of ounces) | 1,158 | 1,003 | 4,258 | 3,564 | |||||||||
| Zinc (tonnes) | 999 | 2,432 | 3,501 | 10,515 | |||||||||
| Copper (tonnes) | 1,335 | 1,396 | 4,941 | 4,997 | |||||||||
| Payable metal sold: | |||||||||||||
| Gold (ounces): | |||||||||||||
| Northern Business | |||||||||||||
| LaRonde mine | 65,067 | 56,844 | 254,529 | 202,338 | |||||||||
| Lapa mine | 23,278 | 28,054 | 90,877 | 92,089 | |||||||||
| Goldex mine | 27,875 | 31,702 | 116,092 | 100,326 | |||||||||
| Meadowbank mine | 103,667 | 87,741 | 385,757 | 452,023 | |||||||||
| Canadian Malartic mine(ii)(v) | 71,982 | 66,219 | 271,416 | 142,689 | |||||||||
| Kittila mine | 43,499 | 42,609 | 178,936 | 139,766 | |||||||||
| Southern Business | |||||||||||||
| Pinos Altos mine | 41,418 | 45,457 | 186,580 | 176,468 | |||||||||
| Creston Mascota deposit at Pinos Altos | 14,997 | 12,940 | 55,844 | 46,698 | |||||||||
| La India mine(iii) | 25,366 | 24,019 | 105,050 | 72,941 | |||||||||
| Total gold (ounces) | 417,149 | 395,585 | 1,645,081 | 1,425,338 | |||||||||
| Silver (thousands of ounces): | |||||||||||||
| Northern Business | |||||||||||||
| LaRonde mine | 308 | 367 | 958 | 1,278 | |||||||||
| Meadowbank mine | 32 | 49 | 225 | 133 | |||||||||
| Canadian Malartic mine(ii)(v) | 98 | 68 | 285 | 140 | |||||||||
| Kittila mine | 3 | 2 | 10 | 6 | |||||||||
| Southern Business | |||||||||||||
| Pinos Altos mine | 607 | 456 | 2,289 | 1,823 | |||||||||
| Creston Mascota deposit at Pinos Altos | 49 | 34 | 156 | 84 | |||||||||
| La India mine(iii) | 56 | 67 | 261 | 169 | |||||||||
| Total Silver (thousands of ounces): | 1,153 | 1,043 | 4,184 | 3,633 | |||||||||
| Zinc (tonnes) | 949 | 2,468 | 3,596 | 10,535 | |||||||||
| Copper (tonnes) | 1,354 | 1,399 | 4,947 | 5,003 | |||||||||
| Total cash costs per ounce of gold produced - co-product basis (US\\$)(vi): | |||||||||||||
| Northern Business | |||||||||||||
| LaRonde mine | \\$ | 668 | \\$ | 898 | \\$ | 760 | \\$ | 1,055 | |||||
| Lapa mine | 622 | 609 | 591 | 667 | |||||||||
| Goldex mine | 513 | 583 | 538 | 638 | |||||||||
| Meadowbank mine | 530 | 766 | 623 | 604 | |||||||||
| Canadian Malartic mine(ii) | 623 | 702 | 613 | 721 | |||||||||
| Kittila mine | 748 | 810 | 710 | 846 | |||||||||
| Southern Business | |||||||||||||
| Pinos Altos mine | 623 | 755 | 578 | 718 | |||||||||
| Creston Mascota deposit at Pinos Altos | 496 | 589 | 474 | 611 | |||||||||
| La India mine(iii) | 518 | 541 | 475 | 532 | |||||||||
| Weighted average total cash costs per ounce of gold produced | \\$ | 604 | \\$ | 735 | \\$ | 626 | \\$ | 721 | |||||
| Total cash costs per ounce of gold produced - by-product basis (US\\$)(vi): | |||||||||||||
| Northern Business | |||||||||||||
| LaRonde mine | \\$ | 510 | \\$ | 590 | \\$ | 590 | \\$ | 668 | |||||
| Lapa mine | 620 | 607 | 590 | 667 | |||||||||
| Goldex mine | 513 | 583 | 538 | 638 | |||||||||
| Meadowbank mine | 526 | 757 | 613 | 599 | |||||||||
| Canadian Malartic mine(ii) | 606 | 684 | 596 | 701 | |||||||||
| Kittila mine | 747 | 809 | 709 | 845 | |||||||||
| Southern Business | |||||||||||||
| Pinos Altos mine | 417 | 597 | 387 | 533 | |||||||||
| Creston Mascota deposit at Pinos Altos | 445 | 556 | 430 | 578 | |||||||||
| La India mine(iii) | 485 | 496 | 436 | 487 | |||||||||
| Weighted average total cash costs per ounce of gold produced | \\$ | 547 | \\$ | 662 | \\$ | 567 | \\$ | 637 | |||||
Notes:
| (i) | Operating margin is calculated as revenues from mining operations less production costs. |
| (ii) | On June 16, 2014, Agnico Eagle and Yamana jointly acquired 100.0% of Osisko by way of a statutory plan of arrangement (the "Arrangement"). As a result of the Arrangement, Agnico Eagle and Yamana each indirectly own 50.0% of Osisko (now Canadian Malartic Corporation) and Canadian Malartic GP, which now holds the Canadian Malartic mine. The information set out in this table reflects the Company's 50.0% interest in the Canadian Malartic mine since the date of acquisition. |
| (iii) | The La India mine achieved commercial production on February 1, 2014. 3,492 ounces of payable gold production were excluded from the calculation of total cash costs per ounce produced in the year ended December 31, 2014 as they were produced prior to the achievement of commercial production. |
| (iv) | Payable production (a non-GAAP non-financial performance measure) is the quantity of mineral produced during a period contained in products that are or will be sold by the Company, whether such products are sold during the period or held as inventories at the end of the period. |
| (v) | The Canadian Malartic mine's payable metal sold excludes the 5.0% net smelter royalty held by Osisko Gold Royalties Ltd. |
| (vi) | Total cash costs per ounce of gold produced is not a recognized measure under IFRS and this data may not be comparable to data presented by other gold producers. Total cash costs per ounce of gold produced is reported on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for by-product metal revenues, unsold concentrate inventory production costs, smelting, refining and marketing charges and other adjustments, and then dividing by the number of ounces of gold produced. Total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as total cash costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made. The calculation of total cash costs per ounce of gold produced on a co-product basis does not reflect a reduction in production costs or smelting, refining and marketing charges associated with the production and sale of by-product metals. The Company believes that these generally accepted industry measures provide a realistic indication of operating performance and provide useful comparison points between periods. Total cash costs per ounce of gold produced is intended to provide information about the cash generating capabilities of the Company's mining operations. Management also uses these measures to monitor the performance of the Company's mining operations. As market prices for gold are quoted on a per ounce basis, using the total cash costs per ounce of gold produced on a by-product basis measure allows management to assess a mine's cash generating capabilities at various gold prices. Management is aware that these per ounce measures of performance can be affected by fluctuations in exchange rates and, in the case of total cash costs of gold produced on a by-product basis, by-product metal prices. Management compensates for these inherent limitations by using these measures in conjunction with minesite costs per tonne as well as other data prepared in accordance with IFRS. Management also performs sensitivity analyses in order to quantify the effects of fluctuating metal prices and exchange rates. |
| AGNICO EAGLE MINES LIMITED | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (thousands of United States dollars, except share amounts, IFRS basis) | ||||||||
| (Unaudited) | ||||||||
| As at | As at | |||||||
|
|
December 31, |
|
December 31, | |||||
| 2015 | 2014 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | \\$ | 124,150 | \\$ | 177,537 | ||||
| Short-term investments | 7,444 | 4,621 | ||||||
| Restricted cash | 685 | 33,122 | ||||||
| Trade receivables | 7,714 | 59,716 | ||||||
| Inventories | 461,976 | 446,660 | ||||||
| Income taxes recoverable | 817 | 1,658 | ||||||
| Available-for-sale securities | 31,863 | 56,468 | ||||||
| Fair value of derivative financial instruments | 87 | 4,877 | ||||||
| Other current assets | 194,689 | 123,401 | ||||||
| Total current assets | 829,425 | 908,060 | ||||||
| Non-current assets: | ||||||||
| Restricted cash | 741 | 20,899 | ||||||
| Goodwill | 696,809 | 696,809 | ||||||
| Property, plant and mine development | 5,088,967 | 5,155,865 | ||||||
| Other assets | 67,238 | 27,622 | ||||||
| Total assets | \\$ | 6,683,180 | \\$ | 6,809,255 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | \\$ | 243,786 | \\$ | 209,906 | ||||
| Reclamation provision | 6,245 | 6,769 | ||||||
| Interest payable | 14,526 | 13,816 | ||||||
| Income taxes payable | 14,852 | 19,328 | ||||||
| Finance lease obligations | 9,589 | 22,142 | ||||||
| Current portion of long-term debt | 14,451 | 52,182 | ||||||
| Fair value of derivative financial instruments | 8,073 | 8,249 | ||||||
| Total current liabilities | 311,522 | 332,392 | ||||||
| Non-current liabilities: | ||||||||
| Long-term debt | 1,118,187 | 1,322,461 | ||||||
| Reclamation provision | 276,299 | 249,917 | ||||||
| Deferred income and mining tax liabilities | 802,114 | 797,192 | ||||||
| Other liabilities | 34,038 | 38,803 | ||||||
| Total liabilities | 2,542,160 | 2,740,765 | ||||||
| EQUITY | ||||||||
| Common shares: | ||||||||
|
Outstanding - 218,028,368 common shares issued, less 377,573 shares held in trust |
4,707,940 | 4,599,788 | ||||||
| Stock options | 216,232 | 200,830 | ||||||
| Contributed surplus | 37,254 | 37,254 | ||||||
| Deficit | (823,734) | (779,382) | ||||||
| Accumulated other comprehensive income | 3,328 | 10,000 | ||||||
| Total equity | 4,141,020 | 4,068,490 | ||||||
| Total liabilities and equity | \\$ | 6,683,180 | \\$ | 6,809,255 | ||||
| AGNICO EAGLE MINES LIMITED | ||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME (LOSS) | ||||||||||||||
| (thousands of United States dollars, except share amounts, IFRS basis) | ||||||||||||||
| (Unaudited) | ||||||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||
| REVENUES | ||||||||||||||
| Revenues from mining operations | \\$ | 482,932 | \\$ | 503,090 | \\$ | 1,985,432 | \\$ | 1,896,766 | ||||||
| COSTS, EXPENSES AND OTHER INCOME | ||||||||||||||
| Production (i) | 229,819 | 287,317 | 995,295 | 1,004,559 | ||||||||||
| Exploration and corporate development | 26,001 | 14,436 | 110,353 | 56,002 | ||||||||||
| Amortization of property, plant and mine development | 157,129 | 139,095 | 608,609 | 433,628 | ||||||||||
| General and administrative | 22,505 | 25,995 | 96,973 | 118,771 | ||||||||||
| Impairment loss on available-for-sale securities | 3,929 | 12,882 | 12,035 | 15,763 | ||||||||||
| Finance costs | 17,887 | 18,144 | 75,228 | 73,393 | ||||||||||
| Loss on derivative financial instruments | 3,318 | 2,512 | 19,608 | 6,156 | ||||||||||
| Gain on sale of available-for-sale securities | (1) | (263) | (24,600) | (5,635) | ||||||||||
| Environmental remediation | 1,666 | (949) | 2,003 | 8,214 | ||||||||||
| Foreign currency translation loss (gain) | 1,281 | 6,951 | (4,728) | 3,781 | ||||||||||
| Other expenses (income) | 377 | (5,318) | 12,028 | (7,004) | ||||||||||
| Income before income and mining taxes | 19,021 | 2,288 | 82,628 | 189,138 | ||||||||||
| Income and mining taxes expense | 34,558 | 23,571 | 58,045 | 106,168 | ||||||||||
| Net income (loss) for the period | \\$ | (15,537) | \\$ | (21,283) | \\$ | 24,583 | \\$ | 82,970 | ||||||
| Net income (loss) per share - basic | \\$ | (0.07) | \\$ | (0.10) | \\$ | 0.11 | \\$ | 0.43 | ||||||
| Net income (loss) per share - diluted | \\$ | (0.07) | \\$ | (0.12) | \\$ | 0.11 | \\$ | 0.39 | ||||||
| Weighted average number of common shares outstanding (in thousands): | ||||||||||||||
| Basic | 217,484 | 212,401 | 216,168 | 195,223 | ||||||||||
| Diluted | 217,484 | 213,273 | 217,101 | 196,202 | ||||||||||
| Note: | ||||||||||||||
| (i) Exclusive of amortization, which is shown separately. | ||||||||||||||
| AGNICO EAGLE MINES LIMITED | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||
| (thousands of United States dollars, IFRS basis) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| OPERATING ACTIVITIES | ||||||||||||||||||
| Net income (loss) for the period | \\$ | (15,537) | \\$ | (21,283) | \\$ | 24,583 | \\$ | 82,970 | ||||||||||
| Add (deduct) items not affecting cash: | ||||||||||||||||||
| Amortization of property, plant and mine development | 157,129 | 139,095 | 608,609 | 433,628 | ||||||||||||||
| Deferred income and mining taxes | (36,853) | 10,869 | 6,550 | 37,058 | ||||||||||||||
| Gain on sale of available-for-sale securities | (1) | (263) | (24,600) | (5,635) | ||||||||||||||
| Stock-based compensation | 7,045 | 7,533 | 35,822 | 37,565 | ||||||||||||||
| Impairment loss on available-for-sale securities | 3,929 | 12,882 | 12,035 | 15,763 | ||||||||||||||
| Foreign currency translation loss (gain) | 1,281 | 6,951 | (4,728) | 3,781 | ||||||||||||||
| Other | (3,862) | (3,541) | 3,145 | 23,430 | ||||||||||||||
| Adjustment for settlement of reclamation provision | (533) | (669) | (1,385) | (4,160) | ||||||||||||||
| Changes in non-cash working capital balances: | ||||||||||||||||||
| Trade receivables | (1,815) | 2,012 | 52,019 | 17,237 | ||||||||||||||
| Income taxes | 64,315 | 5,783 | (2,333) | 30,771 | ||||||||||||||
| Inventories | 8,928 | 23,705 | (40,547) | (1,354) | ||||||||||||||
| Other current assets | (25,322) | 1,102 | (74,106) | 787 | ||||||||||||||
| Accounts payable and accrued liabilities | (11,348) | (13,101) | 20,464 | (3,391) | ||||||||||||||
| Interest payable | (6,609) | (7,119) | 710 | (126) | ||||||||||||||
| Cash provided by operating activities | 140,747 | 163,956 | 616,238 | 668,324 | ||||||||||||||
| INVESTING ACTIVITIES | ||||||||||||||||||
| Additions to property, plant and mine development | (132,958) | (133,353) | (449,758) | (475,412) | ||||||||||||||
| Acquisitions, net of cash and cash equivalents acquired | - | 3,477 | (12,983) | (400,032) | ||||||||||||||
| Net (purchases) sales of short-term investments | (1,300) | 2,200 | (2,823) | (2,404) | ||||||||||||||
| Net proceeds from sale of available-for-sale securities and warrants | 40 | 4,057 | 61,075 | 44,692 | ||||||||||||||
| Purchase of available-for-sale securities and warrants | (382) | - | (19,815) | (27,246) | ||||||||||||||
| Decrease in restricted cash | 18,814 | 493 | 49,785 | 8,783 | ||||||||||||||
| Cash used in investing activities | (115,786) | (123,126) | (374,519) | (851,619) | ||||||||||||||
| FINANCING ACTIVITIES | ||||||||||||||||||
| Dividends paid | (14,940) | (14,606) | (59,512) | (54,065) | ||||||||||||||
| Repayment of finance lease obligations | (6,122) | (7,087) | (23,657) | (21,453) | ||||||||||||||
| Sale-leaseback financing | - | - | - | 1,027 | ||||||||||||||
| Proceeds from long-term debt | 111,000 | 50,000 | 436,000 | 1,010,000 | ||||||||||||||
| Repayment of long-term debt | (196,000) | (49,410) | (697,086) | (724,050) | ||||||||||||||
| Note issuance | - | - | 50,000 | - | ||||||||||||||
| Long-term debt financing | (196) | - | (1,689) | (2,127) | ||||||||||||||
| Repurchase of common shares for restricted share unit plan | - | - | (11,899) | (7,518) | ||||||||||||||
| Proceeds on exercise of stock options | 3,662 | - | 17,672 | 16,994 | ||||||||||||||
| Common shares issued | 2,136 | 2,418 | 9,411 | 10,428 | ||||||||||||||
| Cash (used in) provided by financing activities | (100,460) | (18,685) | (280,760) | 229,236 | ||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (2,315) | (3,431) | (14,346) | (7,505) | ||||||||||||||
| Net (decrease) increase in cash and cash equivalents during the period | (77,814) | 18,714 | (53,387) | 38,436 | ||||||||||||||
| Cash and cash equivalents, beginning of period | 201,964 | 158,823 | 177,537 | 139,101 | ||||||||||||||
| Cash and cash equivalents, end of period | \\$ | 124,150 | \\$ | 177,537 | \\$ | 124,150 | \\$ | 177,537 | ||||||||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||||||||||
| Interest paid | \\$ | 23,158 | \\$ | 23,663 | \\$ | 69,414 | \\$ | 67,632 | ||||||||||
| Income and mining taxes paid | \\$ | 33,756 | \\$ | 13,070 | \\$ | 81,112 | \\$ | 51,302 | ||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL PERFORMANCE MEASURES
(thousands of United States dollars, except where noted)
(Unaudited)
| Total Production Costs by Mine | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||||
| (thousands of United States dollars) | |||||||||||||
| LaRonde mine | \\$ | 32,041 | \\$ | 47,629 | \\$ | 172,283 | \\$ | 188,736 | |||||
| Lapa mine | 12,652 | 17,463 | 52,571 | 61,056 | |||||||||
| Goldex mine | 13,378 | 17,350 | 61,278 | 64,836 | |||||||||
| Meadowbank mine | 49,177 | 67,099 | 230,564 | 270,824 | |||||||||
| Canadian Malartic mine(i) | 46,093 | 47,701 | 171,473 | 113,916 | |||||||||
| Kittila mine | 32,203 | 36,546 | 126,095 | 116,893 | |||||||||
| Pinos Altos mine | 24,351 | 32,690 | 105,175 | 123,342 | |||||||||
| Creston Mascota deposit at Pinos Altos | 7,070 | 7,729 | 26,278 | 28,007 | |||||||||
| La India mine(ii) | 12,854 | 13,110 | 49,578 | 36,949 | |||||||||
| Production costs per the consolidated statements of income (loss) | \\$ | 229,819 | \\$ | 287,317 | \\$ | 995,295 | \\$ | 1,004,559 | |||||
| Reconciliation of Production Costs to Total Cash Costs per Ounce of Gold Produced(iii) by Mine and Reconciliation of Production Costs to Minesite Costs per Tonne(iv) by Mine | |||||||||||||
| LaRonde Mine - Total Cash Costs per Ounce of Gold Produced(iii) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 32,041 | \\$ | 47,629 | \\$ | 172,283 | \\$ | 188,736 | |||||
| Adjustments: | |||||||||||||
| Inventory and other adjustments(v) | 16,847 | 5,633 | 31,417 | 27,070 | |||||||||
| Cash operating costs (co-product basis) | \\$ | 48,888 | \\$ | 53,262 | \\$ | 203,700 | \\$ | 215,806 | |||||
| By-product metal revenues | (11,553) | (18,293) | (45,678) | (79,015) | |||||||||
| Cash operating costs (by-product basis) | \\$ | 37,335 | \\$ | 34,969 | \\$ | 158,022 | \\$ | 136,791 | |||||
| Gold production (ounces) | 73,161 | 59,316 | 267,921 | 204,652 | |||||||||
| Total cash costs per ounce of gold produced (\\$ per ounce)(iii): | |||||||||||||
| Co-product basis | \\$ | 668 | \\$ | 898 | \\$ | 760 | \\$ | 1,055 | |||||
| By-product basis | \\$ | 510 | \\$ | 590 | \\$ | 590 | \\$ | 668 | |||||
| LaRonde Mine - Minesite Costs per Tonne(iv) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 32,041 | \\$ | 47,629 | \\$ | 172,283 | \\$ | 188,736 | |||||
| Inventory and other adjustments(vi) | 2,316 | (1,837) | 2,582 | (1,511) | |||||||||
| Minesite operating costs | \\$ | 34,357 | \\$ | 45,792 | \\$ | 174,865 | \\$ | 187,225 | |||||
| Minesite operating costs (thousands of C\\$) | C\\$ | 53,119 | C\\$ | 52,073 | C\\$ | 222,799 | C\\$ | 206,858 | |||||
| Tonnes of ore milled (thousands of tonnes) | 563 | 538 | 2,241 | 2,085 | |||||||||
| Minesite costs per tonne (C\\$)(iv) | C\\$ | 94 | C\\$ | 97 | C\\$ | 99 | C\\$ | 99 | |||||
| Lapa Mine - Total Cash Costs per Ounce of Gold Produced(iii) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 12,652 | \\$ | 17,463 | \\$ | \\$ 52,571 | \\$ | 61,056 | |||||
| Adjustments: | |||||||||||||
| Inventory and other adjustments(v) | (247) | (1,858) | 1,161 | 750 | |||||||||
| Cash operating costs (co-product basis) | \\$ | 12,405 | \\$ | 15,605 | \\$ | 53,732 | \\$ | 61,806 | |||||
| By-product metal revenues | (42) | (55) | (62) | (61) | |||||||||
| Cash operating costs (by-product basis) | \\$ | 12,363 | \\$ | 15,550 | \\$ | 53,670 | \\$ | 61,745 | |||||
| Gold production (ounces) | 19,929 | 25,611 | 90,967 | 92,622 | |||||||||
| Total cash costs per ounce of gold produced (\\$ per ounce)(iii): | |||||||||||||
| Co-product basis | \\$ | 622 | \\$ | 609 | \\$ | 591 | \\$ | 667 | |||||
| By-product basis | \\$ | 620 | \\$ | 607 | \\$ | 590 | \\$ | 667 | |||||
| Lapa Mine - Minesite Costs per Tonne(iv) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 12,652 | \\$ | 17,463 | \\$ | 52,571 | \\$ | 61,056 | |||||
| Inventory and other adjustments(vi) | (1,297) | (1,999) | (1,000) | 545 | |||||||||
| Minesite operating costs | \\$ | 11,355 | \\$ | 15,464 | \\$ | 51,571 | \\$ | 61,601 | |||||
| Minesite operating costs (thousands of C\\$) | C\\$ | 15,076 | C\\$ | 17,636 | C\\$ | 65,686 | C\\$ | 68,128 | |||||
| Tonnes of ore milled (thousands of tonnes) | 136 | 162 | 560 | 639 | |||||||||
| Minesite costs per tonne (C\\$)(iv) | C\\$ | 111 | C\\$ | 109 | C\\$ | 117 | C\\$ | 107 | |||||
| Goldex Mine - Total Cash Costs per Ounce of Gold Produced(iii) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 13,378 | \\$ | 17,350 | \\$ | 61,278 | \\$ | 64,836 | |||||
| Adjustments: | |||||||||||||
| Inventory and other adjustments(v) | 812 | (161) | 878 | (720) | |||||||||
| Cash operating costs (co-product basis) | \\$ | 14,190 | \\$ | 17,189 | \\$ | 62,156 | \\$ | 64,116 | |||||
| By-product metal revenues | (8) | (4) | (23) | (20) | |||||||||
| Cash operating costs (by-product basis) | \\$ | 14,182 | \\$ | 17,185 | \\$ | 62,133 | \\$ | 64,096 | |||||
| Gold production (ounces) | 27,646 | 29,463 | 115,426 | 100,433 | |||||||||
| Total cash costs per ounce of gold produced (\\$ per ounce)(iii): | |||||||||||||
| Co-product basis | \\$ | 513 | \\$ | 583 | \\$ | 538 | \\$ | 638 | |||||
| By-product basis | \\$ | 513 | \\$ | 583 | \\$ | 538 | \\$ | 638 | |||||
| Goldex Mine - Minesite Costs per Tonne(iv) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 13,378 | \\$ | 17,350 | \\$ | 61,278 | \\$ | 64,836 | |||||
| Inventory and other adjustments(vi) | (189) | (290) | (1,253) | (797) | |||||||||
| Minesite operating costs | \\$ | 13,189 | \\$ | 17,060 | \\$ | 60,025 | \\$ | 64,039 | |||||
| Minesite operating costs (thousands of C\\$) | C\\$ | 17,605 | C\\$ | 19,314 | C\\$ | 76,408 | C\\$ | 70,728 | |||||
| Tonnes of ore milled (thousands of tonnes) | 572 | 575 | 2,313 | 2,117 | |||||||||
| Minesite costs per tonne (C\\$)(iv) | C\\$ | 31 | C\\$ | 34 | C\\$ | 33 | C\\$ | 33 | |||||
| Meadowbank Mine - Total Cash Costs per Ounce of Gold Produced(iii) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 49,177 | \\$ | 67,099 | \\$ | 230,564 | \\$ | 270,824 | |||||
| Adjustments: | |||||||||||||
| Inventory and other adjustments(v) | 5,194 | (656) | 7,282 | 2,688 | |||||||||
| Cash operating costs (co-product basis) | \\$ | 54,371 | \\$ | 66,443 | \\$ | 237,846 | \\$ | 273,512 | |||||
| By-product metal revenues | (455) | (805) | (3,665) | (2,420) | |||||||||
| Cash operating costs (by-product basis) | \\$ | 53,916 | \\$ | 65,638 | \\$ | 234,181 | \\$ | 271,092 | |||||
| Gold production (ounces) | 102,580 | \\$ | 86,715 | \\$ | 381,804 | \\$ | 452,877 | ||||||
| Total cash costs per ounce of gold produced (\\$ per ounce)(iii): | |||||||||||||
| Co-product basis | \\$ | 530 | \\$ | 766 | \\$ | 623 | \\$ | 604 | |||||
| By-product basis | \\$ | 526 | \\$ | 757 | \\$ | 613 | \\$ | 599 | |||||
| Meadowbank Mine - Minesite Costs per Tonne(iv) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 49,177 | \\$ | 67,099 | \\$ | 230,564 | \\$ | 270,824 | |||||
| Inventory and other adjustments(vi) | (724) | (1,177) | (4,441) | 2,539 | |||||||||
| Minesite operating costs | \\$ | 48,453 | \\$ | 65,922 | \\$ | 226,123 | \\$ | 273,363 | |||||
| Minesite operating costs (thousands of C\\$) | C\\$ | 63,514 | C\\$ | 73,612 | C\\$ | 280,950 | C\\$ | 300,635 | |||||
| Tonnes of ore milled (thousands of tonnes) | 1,028 | 1,027 | 4,033 | 4,129 | |||||||||
| Minesite costs per tonne (C\\$)(iv) | C\\$ | 62 | C\\$ | 72 | C\\$ | 70 | C\\$ | 73 | |||||
| Canadian Malartic Mine - Total Cash Costs per Ounce of Gold Produced(i)(iii) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 46,093 | \\$ | 47,701 | \\$ | 171,473 | \\$ | 113,916 | |||||
| Adjustments: | |||||||||||||
| Inventory and other adjustments(v) | (705) | (1,100) | 3,630 | (10,862) | |||||||||
| Cash operating costs (co-product basis) | \\$ | 45,388 | \\$ | 46,601 | \\$ | 175,103 | \\$ | 103,054 | |||||
| By-product metal revenues | (1,236) | (1,230) | (4,689) | (2,771) | |||||||||
| Cash operating costs (by-product basis) | \\$ | 44,152 | \\$ | 45,371 | \\$ | 170,414 | \\$ | 100,283 | |||||
| Gold production (ounces) | 72,872 | 66,369 | 285,809 | 143,008 | |||||||||
| Total cash costs per ounce of gold produced (\\$ per ounce)(iii): | |||||||||||||
| Co-product basis | \\$ | 623 | \\$ | 702 | \\$ | 613 | \\$ | 721 | |||||
| By-product basis | \\$ | 606 | \\$ | 684 | \\$ | 596 | \\$ | 701 | |||||
| Canadian Malartic Mine - Minesite Costs per Tonne(i)(iv) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 46,093 | \\$ | 47,701 | \\$ | 171,473 | \\$ | 113,916 | |||||
| Inventory and other adjustments(vi) | (1,504) | (1,627) | 280 | (11,656) | |||||||||
| Minesite operating costs | \\$ | 44,589 | \\$ | 46,074 | \\$ | 171,753 | \\$ | 102,260 | |||||
| Minesite operating costs (thousands of C\\$) | C\\$ | 59,578 | C\\$ | 52,327 | C\\$ | 219,714 | C\\$ | 113,818 | |||||
| Tonnes of ore milled (thousands of tonnes) | 2,428 | 2,449 | 9,545 | 5,263 | |||||||||
| Minesite costs per tonne (C\\$)(iv) | C\\$ | 25 | C\\$ | 21 | C\\$ | 23 | C\\$ | 22 | |||||
| Kittila Mine - Total Cash Costs per Ounce of Gold Produced(iii) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 32,203 | \\$ | 36,546 | \\$ | 126,095 | \\$ | 116,893 | |||||
| Adjustments: | |||||||||||||
| Inventory and other adjustments(v) | 901 | (1,625) | (187) | 3,051 | |||||||||
| Cash operating costs (co-product basis) | \\$ | 33,104 | \\$ | 34,921 | \\$ | 125,908 | \\$ | 119,944 | |||||
| By-product metal revenues | (39) | (37) | (155) | (124) | |||||||||
| Cash operating costs (by-product basis) | \\$ | 33,065 | \\$ | 34,884 | \\$ | 125,753 | \\$ | 119,820 | |||||
| Gold production (ounces) | 44,279 | 43,130 | 177,374 | 141,742 | |||||||||
| Total cash costs per ounce of gold produced (\\$ per ounce)(iii): | |||||||||||||
| Co-product basis | \\$ | 748 | \\$ | 810 | \\$ | 710 | \\$ | 846 | |||||
| By-product basis | \\$ | 747 | \\$ | 809 | \\$ | 709 | \\$ | 845 | |||||
| Kittila Mine - Minesite Costs per Tonne(iv) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 32,203 | \\$ | 36,546 | \\$ | 126,095 | \\$ | 116,893 | |||||
| Inventory and other adjustments(vi) | 869 | (1,753) | (374) | 2,560 | |||||||||
| Minesite operating costs | \\$ | 33,072 | \\$ | 34,793 | \\$ | 125,721 | \\$ | 119,453 | |||||
| Minesite operating costs (thousands of €) | € | 30,160 | € | 27,500 | € | 111,329 | € | 89,987 | |||||
| Tonnes of ore milled (thousands of tonnes) | 377 | 366 | 1,464 | 1,156 | |||||||||
| Minesite costs per tonne (€)(iv) | € | 80 | € | 75 | € | 76 | € | 78 | |||||
| Pinos Altos Mine - Total Cash Costs per Ounce of Gold Produced(iii) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 24,351 | \\$ | 32,690 | \\$ | 105,175 | \\$ | 123,342 | |||||
| Adjustments: | |||||||||||||
| Inventory and other adjustments(v) | 3,374 | (1,976) | 6,458 | (581) | |||||||||
| Cash operating costs (co-product basis) | \\$ | 27,725 | \\$ | 30,714 | \\$ | 111,633 | \\$ | 122,761 | |||||
| By-product metal revenues | (9,188) | (6,414) | (37,030) | (31,643) | |||||||||
| Cash operating costs (by-product basis) | \\$ | 18,537 | \\$ | 24,300 | \\$ | 74,603 | \\$ | 91,118 | |||||
| Gold production (ounces) | 44,496 | 40,669 | 192,974 | 171,019 | |||||||||
| Total cash costs per ounce of gold produced (\\$ per ounce)(iii): | |||||||||||||
| Co-product basis | \\$ | 623 | \\$ | 755 | \\$ | 578 | \\$ | 718 | |||||
| By-product basis | \\$ | 417 | \\$ | 597 | \\$ | 387 | \\$ | 533 | |||||
| Pinos Altos Mine - Minesite Costs per Tonne(iv) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 24,351 | \\$ | 32,690 | \\$ | 105,175 | \\$ | 123,342 | |||||
| Inventory and other adjustments(vi) | 2,031 | (2,375) | 2,481 | (2,376) | |||||||||
| Minesite operating costs | \\$ | 26,382 | \\$ | 30,315 | \\$ | 107,656 | \\$ | 120,966 | |||||
| Tonnes of ore processed (thousands of tonnes) | 600 | 634 | 2,378 | 2,520 | |||||||||
| Minesite costs per tonne (US\\$)(iv) | \\$ | 44 | \\$ | 48 | \\$ | 45 | \\$ | 48 | |||||
| Creston Mascota deposit at Pinos Altos - Total Cash Costs per Ounce of Gold Produced(iii) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 7,070 | \\$ | 7,729 | \\$ | 26,278 | \\$ | 28,007 | |||||
| Adjustments: | |||||||||||||
| Inventory and other adjustments(v) | (156) | (84) | (328) | 1,232 | |||||||||
| Cash operating costs (co-product basis) | \\$ | 6,914 | \\$ | 7,645 | \\$ | 25,950 | \\$ | 29,239 | |||||
| By-product metal revenues | (720) | (423) | (2,412) | (1,574) | |||||||||
| Cash operating costs (by-product basis) | \\$ | 6,194 | \\$ | 7,222 | \\$ | 23,538 | \\$ | 27,665 | |||||
| Gold production (ounces) | 13,933 | 12,989 | 54,703 | 47,842 | |||||||||
| Total cash costs per ounce of gold produced (\\$ per ounce)(iii): | |||||||||||||
| Co-product basis | \\$ | 496 | \\$ | 589 | \\$ | 474 | \\$ | 611 | |||||
| By-product basis | \\$ | 445 | \\$ | 556 | \\$ | 430 | \\$ | 578 | |||||
| Creston Mascota deposit at Pinos Altos - Minesite Costs per Tonne(iv) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 7,070 | \\$ | 7,729 | \\$ | 26,278 | \\$ | 28,007 | |||||
| Inventory and other adjustments(vi) | (328) | (163) | (757) | 870 | |||||||||
| Minesite operating costs | \\$ | 6,742 | \\$ | 7,566 | \\$ | 25,521 | \\$ | 28,877 | |||||
| Tonnes of ore processed (thousands of tonnes) | 529 | 551 | 2,099 | 1,794 | |||||||||
| Minesite costs per tonne (US\\$)(iv) | \\$ | 13 | \\$ | 14 | \\$ | 12 | \\$ | 16 | |||||
| La India Mine - Total Cash Costs per Ounce of Gold Produced(ii)(iii) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 12,854 | \\$ | 13,110 | \\$ | 49,578 | \\$ | 36,949 | |||||
| Adjustments: | |||||||||||||
| Inventory and other adjustments(v) | (725) | (514) | (28) | 1,172 | |||||||||
| Cash operating costs (co-product basis) | \\$ | 12,129 | \\$ | 12,596 | \\$ | 49,550 | \\$ | 38,121 | |||||
| By-product metal revenues | (772) | (1,055) | (4,058) | (3,230) | |||||||||
| Cash operating costs (by-product basis) | \\$ | 11,357 | \\$ | 11,541 | \\$ | 45,492 | \\$ | 34,891 | |||||
| Gold production (ounces) | 23,432 | 23,273 | 104,362 | 71,601 | |||||||||
| Total cash costs per ounce of gold produced (\\$ per ounce)(iii): | |||||||||||||
| Co-product basis | \\$ | 518 | \\$ | 541 | \\$ | 475 | \\$ | 532 | |||||
| By-product basis | \\$ | 485 | \\$ | 496 | \\$ | 436 | \\$ | 487 | |||||
| La India Mine - Minesite Costs per Tonne(ii)(iv) | |||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (thousands of United States dollars, except as noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs | \\$ | 12,854 | \\$ | 13,110 | \\$ | 49,578 | \\$ | 36,949 | |||||
| Inventory and other adjustments(vi) | (859) | (652) | (657) | 778 | |||||||||
| Minesite operating costs | \\$ | 11,995 | \\$ | 12,458 | \\$ | 48,921 | \\$ | 37,727 | |||||
| Tonnes of ore processed (thousands of tonnes) | 1,439 | 1,427 | 5,371 | 4,442 | |||||||||
| Minesite costs per tonne (US\\$)(iv) | \\$ | 8 | \\$ | 9 | \\$ | 9 | \\$ | 8 | |||||
Notes:
(i) On
Malartic GP, which now holds the Canadian Malartic mine. The information set out in this table reflects the Company's 50.0% interest in the Canadian Malartic mine since the date of acquisition.
(ii) The La India mine achieved commercial production on
(iii) Total cash costs per ounce of gold produced is not a recognized measure under IFRS and this data may not be comparable to data presented by other gold producers. Total cash costs per ounce of gold produced is reported on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for by-product metal revenues, unsold concentrate inventory production costs, smelting, refining and marketing charges and other adjustments, and then dividing by the number of ounces of gold produced. Total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as total cash costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made. The calculation of total cash costs per ounce of gold produced on a co-product basis does not reflect a reduction in production costs or smelting, refining and marketing charges associated with the production and sale of by-product metals. The Company believes that these generally accepted industry measures provide a realistic indication of operating performance and provide useful comparison points between periods. Total cash costs per ounce of gold produced is intended to provide information about the cash generating capabilities of the Company's mining operations. Management also uses these measures to monitor the performance of the Company's mining operations. As market prices for gold are quoted on a per ounce basis, using the total cash costs per ounce of gold produced on a by-product basis measure allows management to assess a mine's cash generating capabilities at various gold prices. Management is aware that these per ounce measures of performance can be affected by fluctuations in exchange rates and, in the case of total cash costs of gold produced on a by-product basis, by-product metal prices. Management compensates for these inherent limitations by using these measures in conjunction with minesite costs per tonne (discussed below) as well as other data prepared in accordance with IFRS. Management also performs sensitivity analyses in order to quantify the effects of fluctuating metal prices and exchange rates.
(iv) Minesite costs per tonne is not a recognized measure under IFRS and this data may not be comparable to data reported by other gold producers. This measure is calculated by adjusting production costs as shown in the consolidated statements of income (loss) for unsold concentrate inventory production costs, and then dividing by tonnes of ore milled. As the total cash costs per ounce of gold produced measure can be impacted by fluctuations in by-product metal prices and exchange rates, management believes that the minesite costs per tonne measure provides additional information regarding the performance of mining operations, eliminating the impact of 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 costs per tonne. Management is aware that this per tonne measure of performance can be impacted by fluctuations in processing levels and compensates for this inherent limitation by using this measure in conjunction with production costs prepared in accordance with IFRS.
(v) Under the Company's revenue recognition policy, revenue is recognized on concentrates when legal title and risk is transferred. As total cash costs per ounce of gold produced are calculated on a production basis, an inventory adjustment is made to reflect the sales margin on the portion of concentrate production not yet recognized as revenue. Other adjustments include the addition of smelting, refining and marketing charges to production costs.
(vi) This inventory and other adjustment reflects production costs associated with unsold concentrates.
Reconciliation of Production Costs to All-in Sustaining Costs per Ounce of Gold Produced
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | ||||||||||
| (United States dollars per ounce of gold produced, except where noted) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
| Production costs per the consolidated statements of income (loss) | |||||||||||||
| (thousands of United States dollars) | \\$ | 229,819 | \\$ | 287,317 | \\$ | 995,295 | \\$ | 1,004,559 | |||||
| Adjusted gold production (ounces)(i) | 422,328 | 387,535 | 1,671,340 | 1,425,796 | |||||||||
| Production costs per ounce of adjusted gold production(i) | \\$ | 544 | \\$ | 741 | \\$ | 596 | \\$ | 705 | |||||
| Adjustments: | |||||||||||||
| Inventory and other adjustments(ii) | 60 | (6) | 30 | 16 | |||||||||
| Total cash costs per ounce of gold produced (co-product basis)(iii) | \\$ | 604 | \\$ | 735 | \\$ | 626 | \\$ | 721 | |||||
| By-product metal revenues | (57) | (73) | (59) | (84) | |||||||||
| Total cash costs per ounce of gold produced (by-product basis)(iii) | \\$ | 547 | \\$ | 662 | \\$ | 567 | \\$ | 637 | |||||
| Adjustments: | |||||||||||||
| Sustaining capital expenditures (including capitalized exploration) | 214 | 240 | 183 | 230 | |||||||||
| General and administrative expenses (including stock options) | 53 | 67 | 58 | 83 | |||||||||
| Non-cash reclamation provision and other | 3 | 4 | 2 | 4 | |||||||||
| All-in sustaining costs per ounce of gold produced (by-product basis) | \\$ | 817 | \\$ | 973 | \\$ | 810 | \\$ | 954 | |||||
| By-product metal revenues | 57 | 73 | 59 | 84 | |||||||||
| All-in sustaining costs per ounce of gold produced (co-product basis) | \\$ | 874 | \\$ | 1,046 | \\$ | 869 | \\$ | 1,038 | |||||
| Notes: | |
| (i) | The La India mine achieved commercial production on February 1, 2014. 3,492 ounces of payable gold production were excluded from the calculation of total cash costs per ounce of gold produced for the year ended December 31, 2014 as they were produced prior to the achievement of commercial production. |
| (ii) | Under the Company's revenue recognition policy, revenue is recognized on concentrates when legal title and risk is transferred. As total cash costs per ounce of gold produced are calculated on a production basis, an inventory adjustment is made to reflect the sales margin on the portion of concentrate production not yet recognized as revenue. Other adjustments include the addition of smelting, refining and marketing charges to production costs. |
| (iii) | Total cash costs per ounce of gold produced is not a recognized measure under IFRS and this data may not be comparable to data reported by other gold producers. Total cash costs per ounce of gold produced is reported on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for by-product metal revenues, unsold concentrate inventory production costs, smelting, refining and marketing charges and other adjustments, and then dividing by the number of ounces of gold produced. Total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as total cash costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made. Accordingly, the calculation of total cash costs per ounce of gold produced on a co-product basis does not reflect a reduction in production costs or smelting, refining and marketing charges associated with the production and sale of by-product metals. The Company believes that these generally accepted industry measures provide a realistic indication of operating performance and provide useful comparison points between periods. Total cash costs per ounce of gold produced is intended to provide information about the cash generating capabilities of the Company's mining operations. Management also uses these measures to monitor the performance of the Company's mining operations. As market prices for gold are quoted on a per ounce basis, using the total cash costs per ounce of gold produced on a by-product basis measure allows management to assess a mine's cash generating capabilities at various gold prices. Management is aware that these per ounce measures of performance can be affected by fluctuations in exchange rates and, in the case of total cash costs of gold produced on a by-product basis, by-product metal prices. Management compensates for these inherent limitations by using these measures in conjunction with minesite costs per tonne as well as other data prepared in accordance with IFRS. Management also performs sensitivity analyses in order to quantify the effects of fluctuating metal prices and exchange rates. |
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