Filed by Agnico-Eagle Mines Limited
Pursuant to Rule 165 and Rule 425 under
the United States Securities Act of 1933, as amended
Filing Company: Agnico-Eagle Mines Limied
Commission File No. 001-13422
Date: August 23, 2005
Searchable text section of graphics shown above
[GRAPHIC]
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Forward Looking Statement |
Building from Strength |
[LOGO] |
This presentation contains certain “forward-looking statements” (within the meaning of the United States Private Securities Litigation Reform Act of 1995) that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties are disclosed under the heading “Risk Factors” in the Company’s Annual Report on Form 20-F filed with Canadian securities regulators and with the United States Securities and Exchange Commission. Certain financial measures discussed in this presentation, such as total cash costs per ounce and minesite costs per ton, are not recognized measures under U.S. GAAP. Reconciliation of these financial measures to their closest U.S. GAAP measure and technical information regarding mineral reserve and resource estimates are provided in the Company’s press release announcing earnings for the second quarter of 2005, which has been filed with the Securities and Exchange Commission and is posted on the Company’s website located at www.agnico-eagle.com.
2
Agnico-Eagle has filed with the SEC a registration statement on Form F-4 containing an offer document regarding the offer. This presentation does not constitute an offer to purchase or sell or a solicitation of an offer to sell or purchase shares of Riddarhyttan or Agnico-Eagle to any person in the United States of America, its possessions and other areas subject to its jurisdiction or to, or for the account or benefit of a U.S. person (as defined in Regulation S under the United States Securities Act of 1933, as amended). The offer will be made to those persons solely under the offer document that is part of the registration statement. Investors and stockholders are advised to read the offer document and other documents relating to the offer carefully because they include important information regarding the offer. Investors and stockholders may obtain a free copy of the offer document and certain other documents relating to the offer from the SEC’s website at www.sec.gov. Free copies of these documents can also be obtained by directing a request to Agnico-Eagle. YOU SHOULD READ THE OFFER DOCUMENT AND OTHER DOCUMENTS RELATING TO THE OFFER CAREFULLY BEFORE MAKING A DECISION CONCERNING THE OFFER.
3
• OPERATIONS
• LARONDE
• GOLDEX
• ADVANCED PROJECTS
• LAPA
• LARONDE II
• ADVANCED EXPLORATION
• RIDDARHYTTAN
• PINOS ALTOS
• EXPLORATION
• BOUSQUET
• NEVADA
• SUMMARY
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Exploration Success Creating Shareholder Value |
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[GRAPHIC]
Global Growth
LaRonde is a Strong Foundation
• Pro-mining environments with low political risk
• Projects well matched to our technical skills
• Favourable geology with camp potential – growing gold resources
• Excellent infrastructure nearby
• Large property positions & database – aggressive exploration program
[GRAPHIC]
5
|
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Low Cost LaRonde Mine Helps Fund Growth |
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[LOGO] |
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H1, 2005 Operating Results |
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Gold (ounces) |
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117,081 |
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Silver (ounces in thousands) |
|
2,302 |
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Zinc (pounds in thousands) |
|
85,488 |
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Copper (pounds in thousands) |
|
7,694 |
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Minesite costs per ton (C$) |
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$ |
49 |
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Total cash costs ($/oz) |
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$ |
84 |
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[GRAPHIC]
7
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Earnings (millions) |
|
$ |
23.2 |
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Earnings per share |
|
$ |
0.27 |
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Cash flow provided by operating activities (millions) |
|
$ |
47.2 |
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Cash & equivalents June 30, 2005 (millions) |
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$ |
121 |
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[GRAPHIC]
8
Full Year 2005 Forecast
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Assumptions |
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(US$) |
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Gold ($/oz) |
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$ |
423 |
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Silver ($/oz) |
|
$ |
7.03 |
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Zinc ($/lb) |
|
$ |
0.57 |
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Copper ($/lb) |
|
$ |
1.56 |
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US$ / C$ |
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$ |
1.21 |
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Breakdown
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Tons |
|
2,910,000 |
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Tons per Day |
|
7,975 |
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Payable Production: |
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|
|
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Au (ounces) |
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250,000 to 260,000 |
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Ag (ounces in thousands) |
|
5,000 |
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Cu (pounds in thousands) |
|
17,000 |
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Zn (pounds in thousands) |
|
166,000 |
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Minesite costs / ton (C$) |
|
$48-$50 |
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Total cash costs / oz (US$) |
|
$90-$100 |
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9
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Building from Strength |
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LaRonde |
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Tons Produced
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|
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June 2004 |
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June 2005 |
|
Difference |
|
Increase / |
|
Budget |
|
|
Tons milled |
|
1 442 926 |
|
1 466 715 |
|
+ 23 789 |
|
2 |
% |
1 443 492 |
|
|
Tons hoisted |
|
1 495 115 |
|
1 406 423 |
* |
-88 692 |
|
-6 |
% |
1 443 489 |
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* Ore pass inventory = 12 000 tons
Tons by Horizon
[CHART]
Short Tons
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Horizon |
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||||||
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|
|
155 |
|
194 |
|
215 |
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Total |
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Budget |
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406 006 |
|
364 117 |
|
673 368 |
|
1 443 490 |
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Forecast |
|
403 049 |
|
380 736 |
|
662 390 |
|
1 446 175 |
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Realized |
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489 707 |
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364 173 |
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557 274 |
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1 411 154 |
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|
|
|
194 |
|
215 |
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2004 |
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31% |
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15% |
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2005 Jan-May |
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40% |
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18% |
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2005 June |
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28% |
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8% |
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Ore Recovery
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|
|
194 |
|
Budget |
|
215 |
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Budget |
|
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2005 Jan-May |
|
92% |
|
94% |
|
89% |
|
99% |
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2005 June |
|
92% |
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92% |
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86% |
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94% |
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On going |
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To do |
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• |
Development |
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Focus on high priority faces |
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* |
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• |
Cable bolting |
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use Cmac and extra manpower |
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* |
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• |
Production drilling |
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increase # of one shot blasts Use Machine Roger in difficult stopes |
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* |
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• |
Mucking |
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6 Yd Scoops used in stopes Purchase a 9th 8 Yd Scoop |
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* |
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• |
Increase zone 7 prod |
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Priority management |
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* |
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• |
Underhand mining of secondary stopes where necessary due to poor ground |
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* |
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||
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• |
Recovery |
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Balance recovery vs dilution control efforts |
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* |
New Gold Mine under Construction
• Base case $400 gold, 1.30 C$/US$
• Base case IRR 15% after tax
• Capital cost $135 million
• Minesite operating costs C$17/ton
• Starting H2, 2008
• Estimated average annual production of 170,000 oz.
• Estimated average total cash costs $200/oz
• Probable reserve of 22.1 million tons at 0.07 oz/ton, or 1.6 million oz
[GRAPHIC]
20
KEY ATTRIBUTES
• Most Advanced Project in Agnico-Eagle’s Pipeline
• Short Pre-production Period – 3 Years
• Simple Orebody Geometry – Utilizing Existing Infrastructure
• Economies of Scale
• Metallurgically Simple
• Synergies with nearby LaRonde – Operating Staff
• Exploration Upside – Open at Depth
Sampling Results - Bulk Sample 2004
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Pilot DDH |
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Wall Chips |
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Muck |
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Tons |
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Total u-g |
|
0.065 opt |
|
0.085 opt |
|
0.065 opt |
|
18,389 |
t |
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|
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Mill (final results) |
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|
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0.081 opt |
|
18,210 |
t |
DDH and muck sampling under estimate the grade
ORE RESERVES
PROBABLE RESERVES
• 22.1 million tons at 0.07 oz/ton or 1.6 million ounces
Goldex extensively sampled, based on:
• 329 Diamond Drill Holes
• 40,401 Core Samples
• 2,600 Chip Samples
• 145,000 Tons of Bulk Sampling
Capital Costs
Capital Cost (CAN M $)
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Year 1 |
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Year 2 |
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Year 3 |
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Year |
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Year |
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Year |
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Total |
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Mine Surface Plant |
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$ |
13 |
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$ |
13 |
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$ |
3 |
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|
$ |
29 |
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Shaft |
|
$ |
2 |
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$ |
16 |
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$ |
2 |
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$ |
20 |
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Mine Development |
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$ |
11 |
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$ |
13 |
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$ |
8 |
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$ |
3 |
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$ |
35 |
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||
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Mine Constr. & Closure |
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$ |
1 |
|
$ |
7 |
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$ |
4 |
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$ |
1 |
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$ |
3 |
|
$ |
17 |
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|
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Mobile Equipments |
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$ |
6 |
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$ |
8 |
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$ |
3 |
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$ |
17 |
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Concentrator |
|
$ |
16 |
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$ |
31 |
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$ |
5 |
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$ |
52 |
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|||
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Tailings & Closure |
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$ |
1 |
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$ |
7 |
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|
|
|
|
$ |
1 |
|
$ |
2 |
|
$ |
12 |
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||
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Working Capital & Salvage |
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$ |
7 |
|
$ |
8 |
|
$ |
-15 |
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|
|
|
|
$ |
-7 |
|
$ |
-7 |
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||
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Total |
|
$ |
56 |
|
$ |
105 |
|
$ |
11 |
|
$ |
4 |
|
$ |
1 |
|
$ |
-2 |
|
$ |
176 |
|
Operating Costs
|
Operating cost |
|
2003 |
|
2005 |
|
|
|
|||||
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Waste Dev. |
|
|
0.26 $/t |
|
2 |
% |
0.07 $/t |
|
1 |
% |
|
|
|
Ore Dev. |
|
|
0.77 $/t |
|
5 |
% |
0.66 $/t |
|
4 |
% |
|
|
|
Stoping |
|
|
4.46 $/t |
|
28 |
% |
3.04 $/t |
|
18 |
% |
|
|
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U/G Services |
|
|
3.00 $/t |
|
19 |
% |
4.78 $/t |
|
28 |
% |
|
|
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Milling |
|
|
5.53 $/t |
|
35 |
% |
5.88 $/t |
|
35 |
% |
|
|
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ADM & Tech. Serv. |
|
|
1.75 $/t |
|
11 |
% |
2.54 $/t |
|
15 |
% |
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|
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Total |
|
|
15.77 $/t |
|
|
|
16.97 $/t |
|
|
|
+8 |
% |
Financial Evaluation
Gold = 400 Us $/oz
Exchange rate = 1.3
Gold = 520 C$/oz
|
|
|
August 2003 |
|
April 2005 |
|
|
|
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25.9 M t. @ |
|
23.6 M t. |
|
|
|
|
0.062 dil. |
|
0.070 dil. |
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|
|
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1.60 M oz |
|
1.64 M oz |
|
|
|
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|
|
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Capex |
|
165 M C$ |
|
176 M C$ |
|
|
Operating cost |
|
15.77 C$/s.t. |
|
16.97 C$/s.t. |
|
|
|
215 Us$/oz |
|
205 Us$/oz |
|
|
|
|
280 C$/oz |
|
265 C$/oz |
|
|
|
|
|
|
|
|
|
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IRR |
|
12% |
|
15% |
|
|
Net Cashflow |
|
189 M C$ |
|
202 M C$ |
|
CAPITAL COST SENSITIVITIES
|
|
|
$300 |
|
$325 |
|
$350 |
|
$375 |
|
$400 |
|
$425 |
|
$450 |
|
$475 |
|
$500 |
|
|
-10% |
|
3.4 |
% |
6.7 |
% |
11.2 |
% |
14.6 |
% |
17.6 |
% |
20.6 |
% |
23.5 |
% |
26.0 |
% |
27.8 |
% |
|
-5% |
|
2.5 |
% |
6.4 |
% |
10.0 |
% |
13.3 |
% |
16.3 |
% |
19.2 |
% |
22.0 |
% |
24.4 |
% |
26.2 |
% |
|
Base case capital cost |
|
1.6 |
% |
5.4 |
% |
8.9 |
% |
12.2 |
% |
15.0 |
% |
17.9 |
% |
20.6 |
% |
23.0 |
% |
24.7 |
% |
|
+5% |
|
0.8 |
% |
4.5 |
% |
7.9 |
% |
11.1 |
% |
13.9 |
% |
16.7 |
% |
19.4 |
% |
21.7 |
% |
23.3 |
% |
|
+10% |
|
0.0 |
% |
3.6 |
% |
7.0 |
% |
10.1 |
% |
12.8 |
% |
15.6 |
% |
18.2 |
% |
20.5 |
% |
22.1 |
% |
GRADE SENSITIVITIES
|
|
|
$300 |
|
$325 |
|
$350 |
|
$375 |
|
$400 |
|
$425 |
|
$450 |
|
$475 |
|
$500 |
|
|
+10% |
|
6.1 |
% |
9.8 |
% |
13.4 |
% |
16.6 |
% |
19.5 |
% |
22.4 |
% |
25.1 |
% |
27.1 |
% |
28.8 |
% |
|
+5% |
|
3.9 |
% |
7.7 |
% |
11.2 |
% |
14.5 |
% |
17.3 |
% |
20.2 |
% |
22.9 |
% |
25.1 |
% |
26.8 |
% |
|
Base case Grade |
|
1.6 |
% |
5.4 |
% |
8.9 |
% |
12.2 |
% |
15.0 |
% |
17.9 |
% |
20.6 |
% |
23.0 |
% |
24.7 |
% |
|
-5% |
|
-0.9 |
% |
3.0 |
% |
6.5 |
% |
9.8 |
% |
12.7 |
% |
15.5 |
% |
18.2 |
% |
20.8 |
% |
22.6 |
% |
|
-10% |
|
-3.6 |
% |
0.4 |
% |
4.0 |
% |
7.3 |
% |
10.2 |
% |
13.0 |
% |
15.7 |
% |
18.2 |
% |
20.4 |
% |
OPERATING COST SENSITIVITIES
|
|
|
$300 |
|
$325 |
|
$350 |
|
$375 |
|
$400 |
|
$425 |
|
$450 |
|
$475 |
|
$500 |
|
|
-10% |
|
4.7 |
% |
8.3 |
% |
11.7 |
% |
14.8 |
% |
17.5 |
% |
20.3 |
% |
22.9 |
% |
25.0 |
% |
26.6 |
% |
|
-5% |
|
3.2 |
% |
6.9 |
% |
10.3 |
% |
13.5 |
% |
16.3 |
% |
19.1 |
% |
21.8 |
% |
24.0 |
% |
25.7 |
% |
|
Base case operating costs |
|
1.6 |
% |
5.4 |
% |
8.9 |
% |
12.2 |
% |
15.0 |
% |
17.9 |
% |
20.6 |
% |
23.0 |
% |
24.7 |
% |
|
+5% |
|
0.0 |
% |
3.9 |
% |
7.5 |
% |
10.9 |
% |
13.8 |
% |
16.7 |
% |
19.5 |
% |
22.0 |
% |
23.7 |
% |
|
+10% |
|
-1.7 |
% |
2.4 |
% |
6.1 |
% |
9.5 |
% |
12.5 |
% |
15.5 |
% |
18.3 |
% |
21.0 |
% |
22.8 |
% |
EXPERIENCED PROJECT TEAM
• Project Manager – Rosaire Emond, P.Eng.
• Mine Superintendent – Christian Provencher, P.Eng.
• Construction Manager – Pierre Bureau, P.Eng.
• Project Metallurgist – Paul Cousin, P.Eng.
• Mill Superintendent – Julie Fournier, P.Eng.
• Planning Engineer – Hughes Destenay, P.Eng.
• Senior Geologist – Dyanne Duquette, P.Geo.
Independent Review – Roscoe Postle Associates Inc.
CONCLUSION
“In RPA’s opinion, the GOLDEX Feasibility Study is a reasonable representation of the proposed project. The proposed mine will be one of the lowest grade mines in the industry and, therefore will be more sensitive to the kind of risks that are present in every operation”.
RECOMMENDATIONS
• Reserves – Compare to Standard Kriged Block Model
• Verify whether Dilution Used is too Low
• Validate Recovery of 93.6 %
• Capital Costs – Contingency too Low
AGNICO-EAGLE RESPONSE
• Reserves
• Standard block model run
• Estimated grade higher (0.075 opt vs. 0.074 opt)
• Resource classification confirmed
• Dilution (20% vs. 10%)
• Overall grade would decrease from 0.070 opt to 0.067 opt
• Negative impact on IRR of 0.6 % to 14.4 % (after tax)
• Recovery
• Used actual recoveries from 3 mill tests
• 0.6 % recovery will have negative impact on IRR of 0.3 %
• Capital Costs
• Falls within sensitivity analysis
• Negative impact on IRR of 2.2 % (after tax) to 12.8 %
SUMMARY & CONCLUSIONS
“Agnico-Eagle’s Board Recommends Placing Goldex Into Production”
• Robust Economics
• Experienced Mine Building Team
• Pro – Mining Region
• Qualified Labour Available
• Straightforward Metallurgy & Mine Plan
• Short Lead Time
• Financed Internally
Potentially the Second New Mine
• Probable reserve of 4.5 million tons at 0.26 oz/ton, or 1.2 million oz
• Indicated resource of 0.8 million tons at 0.16 oz/ton, or 0.13 million oz
• Inferred resource of 1.9 million tons at 0.22 oz/ton, or 0.41 million oz
• $30 million shaft sinking program in progress – Phase 1
• additional $80 million to reach full production – Phase 2
• Potential production of 1,500 tpd and 125,000 ounces per year at total cash costs below $200/oz
• Feasibility complete in H2, 2006
[GRAPHIC]
Longitudinal Section
[GRAPHIC]
• Sinking advance – 10 ft per day
• Potentially 2nd new mine
• Feasibility complete in H2 2006
|
|
Building from Strength |
|
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|
[LOGO] |
|
|
LARONDE II |
|
Long Life Mine
• Large gold reserve – continuing resource conversion
• Higher NSR values at depth in polymetallic envelope
• Pre-feasibility expected in third quarter 2005 – internal winze vs. new shaft
• Detailed engineering of preferred option by year end, 2005
[GRAPHIC]
Trend thicker and higher grade
• Winze is the preferred option
• Will extend Laronde’s mine life rather than augment LaRonde I production
• ADVANTAGES
• Technically simpler
• Lower Capex – use existing infrastructure
• Shorter lead time
• Lower risk
• STUDIES COMPLETED
• Rock Mechanics
• Access Options
• Ventilation
• Mine Development & Infrastructure
• Mining Rate & Sequence
• TO COMPLETE
• Access – Winze Option
• Feasibility – December 2005
|
|
Building from Strength |
|
|
|
|
[LOGO] |
|
|
Suurikuusikko |
|
• Bid proceeding as planned
• If bid successful, expected to be completed in 2005
• Suurikuusikko resource continues to grow
• 6 drills in operation
• Adjacent to major infrastructure
[GRAPHIC]
If The Bid Is Successful:
[GRAPHIC]
• Complete acquisition and merger
• Accelerate drill program
• Convert resources to reserves
Results of the Extensive Exploration Programme 2004-2005
[GRAPHIC]
Expenditures for the extensive exploration programme: USD 7.0
|
|
Building from Strength |
|
|
Location Map |
|
[LOGO] |
|
|
Pinos Altos |
|
High Grade Precious Metals Values
• Indicated gold resource* of 4.4 million tons at 0.18 oz/ton, or 0.8 million oz
• Inferred gold resource* of 2.5 million tons at 0.18 oz/ton, or 0.4 million oz
• Indicated silver resource* of 4.4 million tons at 3.8 oz/ton, or 17 million oz
• Inferred silver resource* of 2.5 million tons at 3.4 oz/ton, or 8.4 million oz
* As calculated by Peñoles
[GRAPHIC]
$2.8 Million Work Plan 2005
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COST |
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TASK |
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MONTHS |
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US$ |
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May |
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June |
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July |
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Aug |
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Sept |
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Oct |
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Nov |
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Open pit exploration and resource conversion (24,000 feet drilling) |
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$ |
0.72 |
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Underground reserve confirmation and resource conversion (15,400 feet drilling) |
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$ |
0.47 |
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Deep exploration (16,000 feet drilling) |
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$ |
0.73 |
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Underground rehabilitation, engineering and metallurgical studies, care and maintenance |
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$ |
0.87 |
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Review period to exercise Purchase Option |
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TOTAL COST |
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$ |
2.8 |
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Update |
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$ |
1.15 |
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Building from Strength |
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Cortez Trend Area |
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[LOGO] |
|
Lander and Eureka Counties, Nevada |
Nevada |
|
[GRAPHIC]
Current Projects
• NSR North and South
• Norma Sass (Norma Sass, Lander Ranch and Blue Nugget Claims)
• Trend Project
[GRAPHIC]
Norma Sass property
• early-stage exploration project
• located immediately south of the Gold Acres open pit mine and west of the Pipeline Mine
• represents one of Nevada’s best remaining exploration targets
• previous drilling at Norma Sass encountered ore-grade gold values hosted by favorable lower-plate carbonate strata.
[GRAPHIC]
Summary
• LaRonde generating strong earnings and cash flows
• New gold mine under construction at Goldex
• Potential second new mine at Lapa by 2008
• Good track record of increasing reserves
• Exciting growth opportunities at LaRonde II, Suurikuusikko and Pinos Altos
• Largest exploration budget in Agnico-Eagle’s history
Reserves – Millions of Ounces
[CHART]