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The meadowbank experience lessons learned about gold
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The Meadowbank and Meliadine
Experience
“Mining and Exploring North of 60”
RBC Capital Markets
North of 60 Conference
April 30, 2013
Toronto
Louise Grondin
SVP Environment and
Sustainable Development
Agnico Eagle Mines Limited
Jean Robitaille
SVP Technical Services and
Project Development
Agnico Eagle Mines Limited
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FORWARD LOOKING STATEMENTS
The information in this document has been prepared as at April 30, 2013. Certain statements contained in this document constitute “forward-looking
statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward looking information under the
provisions of Canadian provincial securities laws. When used in this document, the words “anticipate”, “expect”, “estimate”, “forecast”, “will”, “planned”,
and similar expressions are intended to identify forward-looking statements or information.
Such statements include without limitation: statements regarding timing and amounts of capital expenditures and other assumptions; estimates of future
reserves, resources, mineral production, optimization efforts and sales; estimates of mine life; estimates of future internal rates of return, mining costs,
cash costs, minesite costs and other expenses; estimates of future capital expenditures and other cash needs, and expectations as to the funding
thereof; statements and information as to the projected development of certain ore deposits, including estimates of exploration, development and
production and other capital costs, and estimates of the timing of such exploration, development and production or decisions with respect to such
exploration, development and production; estimates of reserves and resources, and statements and information regarding anticipated future exploration;
the anticipated timing of events with respect to the Company’s mine sites and statements and information regarding the sufficiency of the Company’s
cash resources. Such statements and information reflect the Company’s views as at the date of this document and are subject to certain risks,
uncertainties and assumptions, and undue reliance should not be placed on such statements and information. Many factors, known and unknown could
cause the actual results to be materially different from those expressed or implied by such forward looking statements and information. Such risks
include, but are not limited to: the volatility of prices of gold and other metals; uncertainty of mineral reserves, mineral resources, mineral grades and
mineral recovery estimates; uncertainty of future production, capital expenditures, and other costs; currency fluctuations; financing of additional capital
requirements; cost of exploration and development programs; mining risks; community protests; risks associated with foreign operations; governmental
and environmental regulation; the volatility of the Company’s stock price; and risks associated with the Company’s byproduct metal derivative strategies.
For a more detailed discussion of such risks and other factors that may affect the Company’s ability to achieve the expectations set forth in the forward-
looking statements contained in this document, see the Company’s Annual Report on Form 20-F for the year ended December 31, 2012, as well as the
Company’s other filings with the Canadian Securities Administrators and the U.S. Securities and Exchange Commission. The Company does not intend,
and does not assume any obligation, to update these forward-looking statements and information. Alain Blackburn, a Qualified Person and the
Company’s Senior Vice-President, Exploration, reviewed the technical information disclosed herein. For a detailed breakdown of the Company’s reserve
and resource position see the February 13, 2013 press release on the Company’s website. That press release also lists the Qualified Persons for each
project.
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NOTES TO INVESTORS
Note Regarding the Use of Non-GAAP Financial Measures
This document presents estimates of future “total cash cost per ounce” and “minesite cost per tonne” that are not recognized measures under
United States generally accepted accounting principles (“US GAAP”). This data may not be comparable to data presented by other gold producers.
These future estimates are based upon the total cash costs per ounce and minesite costs per tonne that the Company expects to incur to mine gold
at the applicable projects and do not include production costs attributable to accretion expense and other asset retirement costs, which will vary
over time as each project is developed and mined. It is therefore not practicable to reconcile these forward-looking non-GAAP financial measures to
the most comparable GAAP measure. A reconciliation of the Company’s total cash cost per ounce and minesite cost per tonne to the most
comparable financial measures calculated and presented in accordance with US GAAP for the Company’s historical results of operations is set forth
in the notes to the financial statements included in the Company’s Annual Information Form and Annual Report on Form 20-F, for the year ended
December 31, 2012, as well as the Company’s other filings with the Canadian Securities Administrators and the SEC.
Note Regarding Production Guidance
The gold production guidance is based on the Company’s mineral reserves but includes contingencies and assumes metal prices and foreign
exchange rates that are different from those used in the reserve estimates. These factors and others mean that the gold production guidance
presented in this disclosure does not reconcile exactly with the production models used to support these mineral reserves.
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AGENDA
• Introduction
• History of AEM’s 1st venture in Nunavut
• Why Meadowbank ?
• Permitting in Nunavut
• Meadowbank Mine: - Infrastructure
- Geology
- Challenges
- Accomplishments
- Meadowbank Today
• History of AEM’s 2nd venture in Nunavut
• Meliadine Project: - Infrastructure
- History and Acquisition Rationale
- Geology
- Exploration
- Current Status
• Summary
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INTRODUCTION
Agnico Eagle has a 100% interest in the Meadowbank gold mine and the
Meliadine gold development project, both located in Nunavut.
H u d s o n
B a yCHURCHILL
RANKIN
INLET
YELLOWKNIFE
Railway
Seasonal Shipping
Scheduled Air Route
NUNAVUT TERRITORY
• CANADA •
MEADOWBANK
PROJECT
POLARIS MINE
(closed)
NUNAVUT
BAKER
LAKE
IQALUIT
RAGLAN
MINE
DIAVIK DIAMONDS
LUPIN GOLD
(closed)
NANISIVIK MINE
(closed)
EKATI
DIAMONDS
TAHERA DIAMONDS
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HISTORY OF AEM’S FIRST VENTURE IN NUNAVUT:
MEADOWBANK
History & Permitting Milestones
• 1987: First gold discovery
• 1990-1992: AEM former 55% option (spent C$3.5 M)
• 1997: Cumberland Resources acquires 100% for C$3.2M and 1.5M shares
• 2005: Feasibility announced: 2.8 Moz P&P within 3.8 MI&I
• 2006: Nunavut Impact Review Board recommends development of the project
and an Inuit Impact & Benefits Agreement (IIBA) is signed with Kivalliq Inuit
Association
• 2007: Agnico Eagle acquires Cumberland for $750 million ($650 net of cash)
• 2007 - 2010: Project construction – 8,500 tpd open pit and conventional mill with
initial capex of $710 million
• 2010: Commercial production achieved March 1
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WHY MEADOWBANK?
Finland
Kittila
Mexico
Pinos Altos
Canada
Toronto, HQ
Canada
LaRonde,
Goldex & Lapa
Canada
Meadowbank
• Construction stage project with
feasibility and permitting
essentially complete
• Open pit operation, i.e. shorter time
to production
• Synergy: could be operated from
its base of operations in Val d’Or
• Forecasted to provide significant
gold production starting in 2010
• Located in a politically stable, pro-
mining jurisdiction
• Offered additional exploration
potential in a new camp
U.S.A.
Nevada
Strategic Rationale
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PERMITTING IN NUNAVUT - INUIT OWNED LAND
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Inuit owned
subsurface rights
(35,000 km2 or less than
2% of Nunavut)
Inuit owned surface
rights (350,000 km2
or 16% of Nunavut)
If claim on Inuit Owned
Lands, agreements with
Inuit Organisations will
be required
Inuit Land
Ownership
Nunavut
1.9 million km2
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INUIT ORGANIZATIONS
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Sub-surface rights on Inuit
Owned Lands are owned by
Nunavut Tungavik Incorporated
or NTI
Surface rights on Inuit
Owned Lands are owned by
the Regional Inuit Organization
Kitikmeok
Kivalliq
Qikiqktani
Meadowbank and Meliadine on Inuit
Owned Lands in the Kivalliq region
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PERMITTING FOR EXPLORATION IN NUNAVUT
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Federal Gov’t or
Inuit Organization
EXPLORATION
Nunavut Water Board
Screening by Nunavut Impact Review Board
Exploration Lease Type B Water License
Approximately
6-12 months
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PERMITTING FOR MINING IN NUNAVUT – PROJECT
CERTIFICATE
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Construction and
Operation
Nunavut Water Board (NWB)
Assessment and Public Hearings
Screening by Nunavut Impact Review Board (NIRB)
Environmental Impact
Assessment & Public
Hearings
Type A Water License
Approximately
3-4 years
Submit Project Description to Nunavut Impact
Review Board with Application for Water Licence
Referred to NIRB Hearings Process
Inuit Impact
Benefit
Agreement
(IIBA)
Mining Lease
Water
Compensation
Agreement
Agreements with Inuit Organizations
Surface Lease
Project Certificate
Approved land use permit conformity with Nunavut Planning
Commission
Project Construction can start
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MEADOWBANK INFRASTRUCTURE : Air and water access
• Meadowbank
supported from Val
d’Or (air):
- Mine staff
- Technical Services
- Administration
- Supplies
• Supplies shipped by
barge (2-3 month
shipping season )
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5.6 M litre Fuel Tank Pad
Crushing Plant
Airstrip
Camp Facilities
MEADOWBANK PROJECT – APRIL 2007
Current Status - 2006 Site Construction
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Prior to Start Up
• AEM had limited arctic experience
• Logistics – limited shipping season, air transport issues
• Fuel storage and management
• Mining in a lake: dewatering dikes
• Staffing – management team, training of Inuit workforce
After Start Up
• Mining – blizzard and cold temperatures– temporary shutdowns and equipment
issues – mining in permafrost – dewater to mine
• Process plant - challenges reaching 8,500 tpd capacity
• Ore storage - frozen stockpiles
• Dilution - narrow mining widths, ore zone angle and ore dispersion from
blasting
• Turnover: 229 Inuit departures in 2011 (permanent and temporary)
• Kitchen fire in 2011
MEADOWBANK CHALLENGES
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MEADOWBANK ACCOMPLISHMENTS
• Block model confirmed – locally
better grade reconciliation
• June 2011 - Installed permanent
secondary crusher, which allowed
designed mill throughput of 8,500
tpd to be consistently exceeded
(now >11,000 tpd)
• Feb. 2012 - New optimized mine
plan which reduced ore and waste
tonnes by 36%
• Now have a well trained Inuit and
expat workforce with arctic
experience, ~32% Inuit workforce
Q1 : 11,300 tpd
Secondary crusher increased
throughput from 6,800 tpd in mid
2011 to 11,300 in Q1, 2013
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MEADOWBANK TODAY
• Record performance in 2012
• Expected to produce about 360,000
ozs at $985/oz in 2013.
• 2012 reserve growth (at higher
grades) could have a positive impact
on the current six year mine life
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P&P GOLD RESERVES (million oz) 2.3
AVERAGE GOLD RESERVE
GRADE (g/t)
2.8
Measured & Indicated resource
(million oz)
(10.3 M tonnes @ 2.49 g/t)
0.8
Inferred resource (million oz)
(3.6 M tonnes @ 3.81 g/t)
0.4
2013 Sustaining capital (est.) $40
2013 exploration budget $4M
See AEM Feb 13, 2013 press release for detailed breakdown of reserves and
resources.
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MELIADINE - PROJECT HISTORY
History & Permitting Milestones
• 1972: First gold discovery reported by Rankin Nickel Syndicate at Tonic Lake
• 1989: Asamera & Comaplex Minerals find the Discovery deposit (4.4 g/t over
4.0m) and form a 50:50 JV
• 1993: Discovery of Tiriganiaq (17.2/ g/t over 1.1m), F Zone and Pump Zones
• 1994: Asamera sells its interest to Cumberland Resources
• 1995: WMC options the Meliadine West property
• 2003: Comaplex Minerals buys WMC 56% interest to own 78% of the property,
Resource Capital Fund holds 50% interest in Meliadine East
• 2010: Comaplex acquires remaining interest in Meliadine East
• 2010: AEM acquires Comaplex in July for $668 million and gets 100% of the
Meliadine property.
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MELIADINE INFRASTRUCTURE
• Similar concept to Meadowbank
• Shorter road access (~24 km) to a
larger community (Rankin Inlet)
• Airport can support larger aircraft
• Slightly longer shipping season with
better port facility
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WHY MELIADINE?
• Better infrastructure than Meadowbank
• Large resource base with higher-grade
UG component
• Successor operation to Meadowbank
• Management and workforce now well
experienced with arctic operations
• AEM has built up strong relationships with
the government and local suppliers in
Nunavut
• Located in a politically stable, pro-mining
jurisdiction
• 100% ownership of an 80 km long belt
with significant exploration potential
Strategic Rationale
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MELIADINE PROJECT – RESERVES & RESOURCES
• 2012 exploration resulted in significant new
resources, primarily at the new Normeg
deposit
• Normeg is about 100 metres from the main
Tiriganiaq deposit
- could enhance overall project economics
P&P GOLD RESERVES (million oz) 3.0
AVERAGE GOLD RESERVE GRADE
(g/t)
7.0
Indicated gold resource (million oz)
(17.2 M tonnes @ 3.9 g/t)
2.2
Inferred gold resource (million oz)
(14.8 M tonnes @ 6.2 g/t)
2.9
See AEM Feb 13, 2013 press release for detailed breakdown of reserves
and resources.
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2013 MELIADINE EXPLORATION PROGRAM
• $31 million exploration program
for 2013
• Drilling restarted in March
• 9 rigs currently operating
• 90,000 m drilling planned
- Conversion of existing resources
- Extension of known deposits
• Potential for the discovery of
new zones like Normeg
• Portal cover will be installed this
year to allow restart of
exploration ramp
Portal
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MELIADINE PROJECT – CURRENT STATUS
• Road connected to camp in March
- Final construction this summer
• Alternate energy study underway
- LNG and wind power
• Expect updated technical study in 2014
- Potential OP and UG operation
• Permitting activities are ongoing
- Project certificate expected in 2014
- Potential for first production in 2018
65m bridge span over Meliadine river
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