Stock Symbol: AEM (NYSE and TSX)
(All amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, Feb. 23, 2022 /PRNewswire/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle" or the "Company") today announced senior management changes and reported fourth quarter and full year 2021 financial and operating results, as well as future operating guidance.
Ammar Al-Joundi has been appointed President and Chief Executive Officer, effective immediately. Mr. Al-Joundi is a proven executive with a long history of mining industry experience who previously served as President of Agnico Eagle. With this appointment, Mr. Al-Joundi joins the Company's board of directors (the "Board"). Anthony Makuch advised the Board that he has decided to step down as Chief Executive Officer and as a director of Agnico Eagle.
Mr. Al-Joundi has over 20 years of experience in mining, capital markets and banking, with specialization in finance and business strategy. He joined Agnico Eagle as President in 2015, after serving as Chief Financial Officer at Agnico Eagle (from September 2010 to June 2012) and as Chief Financial Officer and Senior Executive Vice President at Barrick Gold Corporation (from July 2012 to February 2015). Prior to joining Agnico Eagle in 2010, he spent 11 years at Barrick in various senior financial roles including Senior Vice-President of Finance, Senior Vice-President of Business Strategy and Capital Allocation, and Executive Director and CFO of Barrick South America.
"Ammar has the right mix of skill, experience and knowledge to execute the new Agnico Eagle's strategic plan to become the world's leading and highest quality senior gold producer," said Executive Chair Sean Boyd. "We are confident that Ammar is the right leader to complete the integration of Agnico Eagle and Kirkland Lake Gold and, working closely with our combined Board members and executive team and our outstanding employees, he will help drive the Company's successes as we continue to work to create long-term value for the Company's shareholders and other key stakeholders," added Mr. Boyd.
The Agnico Eagle Board expresses its thanks to Mr. Makuch for steering Kirkland Lake Gold Ltd. ("Kirkland Lake Gold") through this transformative transaction and for his contributions to Kirkland Lake Gold during his tenure.
Tony Makuch said: "We built Kirkland Lake Gold by acquiring, developing and operating high-quality assets in good jurisdictions with significant exploration upside. Just as important, we build a business based on honesty, integrity, respect for all people and support for communities. We have culminated all this with the merger of equals with Agnico Eagle and I am very proud to have been involved in creating the third largest global gold producer in the world. I am leaving Agnico with a strong and dedicated leadership team and I believe they will continue to be successful. I would like to thank the tremendous team of people at Kirkland Lake Gold for their years of hard work and support in building a truly special company."
Jeff Parr, Vice-Chair of Agnico Eagle and former Chair of Kirkland Lake Gold, said, "We want to thank Tony for his tremendous contribution to the success of Kirkland Lake Gold, building the company into a 1.4 million ounce per year producer with the industry's lowest unit costs and significant growth potential. Tony's track record for enhancing the value of assets through investment in exploration, development and the optimization of performance is unsurpassed and we know he will continue to have great success in whatever venture he chooses next."
Agnico Eagle 2021 highlights:
Record annual gold production – Payable gold production1 in the full year 2021 was 2,030,176 ounces (excluding 56,229 ounces of payable gold production at Hope Bay, and including 24,057 ounces and 1,956 ounces of pre-commercial gold production at the Tiriganiaq open pit at Meliadine and the Amaruq underground project, respectively) at production costs per ounce of $835, total cash costs per ounce2 of $761 and all-in sustaining costs ("AISC") per ounce3 of $1,038. Production costs per ounce, total cash costs per ounce and AISC per ounce exclude the Hope Bay mine and the pre-commercial production ounces from Amaruq and Tiriganiaq
Strong Quarterly production in spite of COVID-19 impacts – Payable gold production in the fourth quarter of 2021 was 501,227 ounces (excluding 705 ounces of payable gold production at Hope Bay, and including 1,608 ounces of pre-commercial gold production at the Amaruq underground project) at production costs per ounce of $892, total cash costs per ounce of $812 and AISC per ounce of $1,126. Production costs per ounce, total cash costs per ounce and AISC per ounce exclude the pre-commercial production ounces from Amaruq. Production and costs in the fourth quarter of 2021 were negatively affected by a reduction in operating activities in Nunavut largely due to a COVID-19 outbreak in mid-December 2021
Several operational milestones achieved in the fourth quarter of 2021 and full year 2021 – In December 2021, new monthly records for gold production were set at Kittila and Canadian Malartic. In 2021, new annual records for gold production were set at Meliadine, Kittila and Canadian Malartic, while the LaRonde Complex had its best year ever in terms of tonnage milled. Several production milestones were also reached in the fourth quarter of 2021, with the LaRonde Complex pouring its seven millionth ounce of gold, Goldex reached one million ounces of gold produced (since the 2013 restart) and Canadian Malartic reached six million ounces of gold produced (100% basis)
COVID-19 still a concern, but risks appear manageable at this time – The Company has increased its efforts to monitor and manage risks associated with the Omicron variant of COVID-19. At this time, case counts appear to be dropping and the Company expects that it will be able to maintain budgeted production levels. The Company expects that its efforts to help protect the northern communities from this COVID-19 variant will have a slightly negative effect on production in the first quarter of 2022 as the Nunavut-based workforce ("Nunavummiut") were sent back to their communities in December 2021. Plans are being reviewed to re-integrate the local workforce as soon as possible
"The fourth quarter of 2021 was Agnico Eagle's fifth consecutive quarter of over 500,000 ounces of gold production, which is particularly impressive given the impacts of COVID-19 during the latter part of the quarter. On a full year basis, in 2021 the Company achieved records in gold production, operating cashflow and mineral reserves, all while delivering the best safety performance in the Company's 64-year history", said Ammar Al-Joundi, Agnico Eagle's President and Chief Executive Officer. "Looking forward, all of our mines, both those contributed by Agnico Eagle and Kirkland Lake Gold, are well positioned for another strong year in 2022, and well into the future. Furthermore, the Company is investing more than ever before at our mines and in exploration to build an even stronger business, in what we believe are the best places in the world to mine for gold", added Mr. Al-Joundi.
1 Payable production of a mineral means the quantity of a mineral produced during a period contained in products that have been or will be sold by the Company whether such products are shipped during the period or held as inventory at the end of the period.
2 Production costs per ounce and total cash costs per ounce are non-GAAP ratios that are not standardized financial measures under the financial reporting framework used to prepare the Company's financial statements and, unless otherwise specified, is reported on a by-product basis in this news release. For the detailed calculation of production costs per ounce and the reconciliation to production costs and for total cash costs on a co-product basis, see "Reconciliation of Non-GAAP Financial Performance Measures" below. See also "Note Regarding Certain Measures of Performance".
3 AISC per ounce is a non-GAAP ratio that is not a standardized financial measure under the financial reporting framework used to prepare the Company's financial statements and, unless otherwise specified, is reported on a by-product basis in this news release. For a reconciliation to production costs and for all-in sustaining costs on a co-product basis, see "Reconciliation of Non-GAAP Financial Performance Measures" below. See also "Note Regarding Certain Measures of Performance".
The New Agnico Eagle – A best-in-class gold mining company with the largest gold production from Canada and well positioned internationally with profitable and prospective assets in Australia, Finland and Mexico.
Merger with Kirkland Lake Gold Ltd. (the "Merger") – On February 8, 2022, the Merger with Kirkland Lake Gold Ltd. ("Kirkland Lake Gold") was completed
New three-year operational guidance – Payable gold production for 2022 is forecast to be approximately 3.2 to 3.4 million ounces with total cash costs per ounce expected to be between $725 and $775 and AISC per ounce expected to be between $1,000 and $1,050. Gold production for 2023 and 2024 is expected to be in a similar range to 2022 at approximately 3.2 to 3.4 million ounces of gold with relatively stable total cash costs per ounce and AISC per ounce compared to 2022. As the expected Merger synergies are realized, both cost metrics are expected to then decline in 2023 and 2024. Estimated capital expenditures for 2022 total approximately $1.4 billion, which includes approximately $703 million of sustaining capital4 at the Company's operating mines and $710 million on growth projects5. Not included in the 2022 estimated capital expenditures is approximately $131 million relating to capitalized exploration
Strong Combined Mineral Reserve Base Totaling 44.6 Million Ounces of Gold – At December 31, 2021, Agnico Eagle's proven and probable mineral reserves were a record 25.7 million ounces of gold (337 million tonnes grading 2.37 grams per tonne ("g/t") gold); measured and indicated mineral resources were 17.2 million ounces (353 million tonnes grading 1.52 g/t gold); and inferred mineral resources were 23.7 million ounces (272 million tonnes grading 2.72 g/t gold). At December 31, 2021, Kirkland Lake Gold's proven and probable mineral reserves were 18.9 million ounces of gold (584 million tonnes grading 1.01 g/t gold); measured and indicated mineral resources were 22.4 million ounces (647 million tonnes grading 1.08 g/t gold); and inferred mineral resources were 6.9 million ounces (94.0 million tonnes grading 2.28 g/t gold)
Large exploration program planned for 2022 with a focus on minesite and pipeline opportunities – The exploration budget in 2022 is approximately $324 million ($193 million of expensed exploration and $131 million of capitalized exploration), with a primary focus on the expansion of mineral reserves and mineral resources at operating mines (Detour, Macassa, Fosterville and Meliadine) and pipeline projects (the Odyssey and Hope Bay projects)
Future Value Drivers
Synergies and optimization opportunities expected to drive over $2B in value creation over the next 10 years – In 2022, the Company expects to realize Merger-related corporate and operational synergies of approximately $40 million to $60 million, of which $12 million have already been realized at the time of this news release. In subsequent years, the Company expects to ramp up these synergies to approximately $165 million per year. A further $590 million over 10 years are expected to be realized through strategic optimizations which include the development of the Amalgamated Kirkland ("AK") deposit at the Kirkland Lake camp with initial gold production potentially as early as 2024
Detour Lake Mine – Successful exploration programs in 2020 and 2021 led to a significant increase in open-pit mineral resources in 2021. These new mineral resources and ongoing business improvement initiatives will be incorporated into a new technical report expected to be filed in the second quarter of 2022. This report is expected to show growth in mineral reserves and provide additional opportunities to enhance the future production profile of the mine
Macassa Mine – Sinking of the #4 Shaft was completed in January 2022, over a year earlier than initially planned. Completion of other #4 Shaft development activities are expected in late 2022. The #4 Shaft is expected to provide numerous benefits, including increased hoisting capacity, improved unit costs, better ventilation, and enhanced capabilities to pursue exploration potential across the Kirkland Lake camp. Gold production at Macassa is forecast to increase from 170,000 to 190,000 ounces in 2022 with a target to approximately 330,000 to 350,000 ounces in 2024. Production levels could potentially increase once the full benefit of the #4 Shaft is realized
Fosterville Mine – Based on current exploration results, the Company's long-term goal for Fosterville is to establish the mine as a long-life asset through success in replacing mineral reserves. The Company believes there is potential to discover additional high-grade zones that could potentially support higher production levels and improvements in unit costs
Odyssey Project – Underground development and surface construction activities remain on schedule and on budget as of the date hereof. In 2022, approximately 136,835 metres of surface and underground drilling is planned to infill and expand mineral reserves. From 2023 to 2028, gold production is forecast to be approximately 932,000 ounces at total cash costs of approximately $800 per ounce (all numbers on a 100% basis). Average annual payable production is expected to be approximately 545,400 ounces of gold from 2029 to 2039, with total cash costs per ounce of approximately $630
Kittila Expansion Project – The mill expansion was completed ahead of schedule in late 2020 and shaft sinking is expected to be completed in the second half of 2022, with commissioning of the production hoist expected in late 2022 or early 2023. Completion of the shaft is expected to result in lower operating costs and provide additional drilling access to increase mineral reserves and mineral resources at depth. Estimated total expansion project costs remain within the previously disclosed range of €190 to €200 million
Optimization and consolidation of mining assets and infrastructure in the Kirkland Lake gold camp – There are several development assets in the Kirkland Lake area with significant mineral reserves and mineral resources. Studies are underway to evaluate the potential to advance some of these assets into production (AK, Upper Beaver, Upper Canada) either as standalone projects or by leveraging existing infrastructure at Macassa or the Holt processing complex
Strong balance sheet allows for asset development and robust returns to shareholders, including a new share buyback program – With over $2.2 billion in liquidity, the Company is well positioned to fund its existing capital requirements and increase returns to shareholders. With this strong financial position, the Company announced today that, subject to the approval of the Toronto Stock Exchange (the "TSX), it intends to launch a normal course issuer bid to repurchase for cancellation up to 9 million of its common shares, for up to an aggregate amount of $500 million, representing approximately 2% of its 454.8 million common shares issued and outstanding as at February 23, 2022.
Quarterly dividend increased by 14% – A quarterly dividend of $0.40 per share has been declared (previous quarterly dividend was $0.35)
4 Sustaining capital is a non-GAAP measure that is not a standardized financial measure under the financial reporting framework used to prepare the Company's financial statements. See "Note Regarding Certain Measures of Performance".
5 Growth projects or development capital is a non-GAAP measure that is not a standardized financial measure under the financial reporting framework used to prepare the Company's financial statements. See "Note Regarding Certain Measures of Performance".
Fourth Quarter 2021 Results Conference Call and Webcast Tomorrow
Agnico Eagle's senior management will host a conference call on at 11:00 AM (E.S.T.) to discuss the Company's fourth quarter and full year financial and operating results, as well as operating plans following completion of the Merger.
For those preferring to listen by telephone, please dial 1-416-764-8659 or toll-free 1-888-664-6392. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.
Please dial 1-416-764-8677 or toll-free 1-888-390-0541, access code 093746#. The conference call replay will expire on Friday, March 25, 2022.
The webcast and presentation slides will be archived for 180 days on the Company's website.
To read the complete article and see all of the financial tables on https://www.prnewswire.com/, please click here.