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Meadowbank MineAnalyst TouryNunavut - June 28, 2011
1Member of the World Gold Council www.gold.org Meadowbank, Canada
Forward Looking Statements
The information in this document has been prepared as at June 28, 2011. 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 forwardl ki i f ti d th i i f C di i i l iti l Wh d i thi d t th d “ ti i t ”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 orinformation.
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 futureinternal rates of return mining costs cash costs minesite costs and other expenses; estimates of future capital expenditures andinternal rates of return, mining costs, cash costs, minesite costs and other expenses; estimates of future capital expenditures andother cash needs, and expectations as to the funding thereof; statements and information as to the projected development of certainore deposits, including estimates of exploration, development and production and other capital costs, and estimates of the timing ofsuch exploration, development and production or decisions with respect to such exploration, development and production; estimates ofreserves and resources, and statements and information regarding anticipated future exploration; the anticipated timing of events withrespect to the Company's minesites and statements and information regarding the sufficiency of the Company's cash resources. Suchstatements and information reflect the Company's views as at the date of this document and are subject to certain risks uncertaintiesstatements and information reflect the Company s views as at the date of this document and are subject to certain risks, uncertaintiesand assumptions, and undue reliance should not be placed on such statements and information. Many factors, known and unknowncould cause the actual results to be materially different from those expressed or implied by such forward looking statements andinformation. 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 othercosts; currency fluctuations; financing of additional capital requirements; cost of exploration and development programs; mining risks;
it t t i k i t d ith f i ti t l d i t l l ti th l tilit f thcommunity protests; risks associated with foreign operations; governmental and environmental regulation; the volatility of theCompany's stock price; and risks associated with the Company's byproduct metal derivative strategies. For a more detaileddiscussion 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 31,2010, as well as the Company's other filings with the Canadian Securities Administrators and the U.S. Securities and ExchangeCommission. The Company does not intend, and does not assume any obligation, to update these forward-looking statements and
2
information. Marc Legault, a Qualified Person and the Company’s Vice-President, Project Development, reviewed the technicalinformation disclosed herein. For a detailed breakdown of the Company’s reserve and resource position see the February 16, 2011press release on the Company’s website. That press release also lists the Qualified Persons for each project.
Note To InvestorsRegarding 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 recognizedS ( S G )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 pertonne that the Company expects to incur to mine gold at the applicable projects and do not include production costs attributable toaccretion expense and other asset retirement costs, which will vary over time as each project is developed and mined. It is thereforenot practicable to reconcile these forward-looking non-GAAP financial measures to the most comparable GAAP measure. Areconciliation of the Company's total cash cost per ounce and minesite cost per tonne to the most comparable financial measuresreconciliation of the Company s total cash cost per ounce and minesite cost per tonne to the most comparable financial measurescalculated and presented in accordance with US GAAP for the Company's historical results of operations is set forth in the notes to thefinancial statements included in the Company's Annual Information Form and Annual Report on Form 20-F, for the year endedDecember 31, 2010, as well as the Company's other filings with the Canadian Securities Administrators and the SEC.
3
LaRonde Goldex Kittila Lapa Pinos Altos Meadowbank
Nunavut – An Integral Part of AEM’s Long-Term StrategyMeadowbank and Meliadine – 29% of AEM’s growing reserves and 38% of resources
NUNAVUT TERRITORY NUNAVUT
g g
RailwaySeasonal ShippingScheduled Air Route
NUNAVUT TERRITORY• CANADA •
NUNAVUT
MeadowbankMine
RANKININLET
RANKININLET
YELLOWKNIFEYELLOWKNIFE
Mine
BAKERLAKE
BAKERLAKE
IQALUITIQALUIT
RAGLANMINE
Meliadine Project
H u d s o nB a yCHURCHILL
INLETINLET MINE
4
“The GDP of Nunavut increased by 11% in 2010 largely due to the Meadowbank mine.” Source: Conference Board of Canada
Meadowbank – History
■ 1983 Ground is staked around a gold showing in the Meadowbank area
■ 1987 Gold discovered on Portage deposit
■ 1995 Cumberland purchases 60%, increases resource to 1.5 Moz
1997 C b l d i 100% i iti t f ibilit t di■ 1997 Cumberland acquires 100%, initiates pre-feasibility studies
■ 2005 AMEC Feasibility returns 2.8 Moz P&P within 3.8 MI&I
2006 G S th Z di■ 2006 Goose South Zone discovery
■ 2007 Agnico-Eagle acquires Cumberland - $750 million; Construction starts■ 2008 110 km all season road completed from Baker Lake to the site■ 2008 110 km all-season road completed from Baker Lake to the site. ■ 2010 First gold is poured Feb 27, 2010. Processing plant achieves commercial
production March 1.
5
Meadowbank - Overview
■ 1st major mine of its type in Nunavut
■ Only 3 years to permit, build and achieve first gold pour
■ AEM invested over $1.5 Billion since 2007■ Acquisition - $750 million
■ Pre-production - $710 million
■ Exploration - $30 million
■ Several challenges met and overcome in first year of operations
■ June operations above design throughput – 16 months after startup
Management Logistics Arctic Conditions
RegulatoryEnvironment
Cross Cultural
6
■ June to date - 8,554 tpd
M d b kMeadowbank
Construction
Meadowbank Project – April 2007Minimal infrastructure at the time of acquisition
Camp FacilitiesAirstrip
p
Crushing Plant
5.6 M litre Fuel Tank Pad
8
Meadowbank Site – June 2011Significant investment by AEM drastically transforms landscape in 3 short years
Power Plant
Process PlantShop
Tailing Pond
Permanent CampConstruction
Camp
9
M d b kMeadowbank
Operations
Meadowbank – Operating Parameters
Mine Throughput: 8,500 tpdVault Pit
Metallurgical Au Recovery: 92.5%
Mining Method: Three Open PitsMine is on IOL Land
Airstrip Airstrip
TIA
Mine is on IOL Land –Mineral rights to NTI and Canada
550 permanent jobs
Average annual production: Mill SiteMill Site
Years 1 to 4: 400,000 oz Au
Life of Mine: 350,000 oz Au
Open Pit Mineral Reserve: 3.64 million oz Au
Portage PitPortage Pit
Au
Goose Island PitGoose Island Pit
11Third Portage Lake
Meadowbank Site – June 2011Mining Operations – Portage Open Pit
12
Processing Facilities
7000T Li C it D7000T Live Capacity Dome
P & Mill F ilitiPower & Mill Facilities
13
Processing Plant Flowsheet
14
Process Plant
■ 8,500 tpd – design capacity
■ SAG mill – 26’x12,5’L 4,500hp
■ Ball mill - 18’ x 29’L, 6,000 hp, , p
■ Gravity Circuit Falcon Concentrator 1x30’’ with Intensive Leach Circuit
■ Leach & CIP
15
Process Plant
■ Diesel Power Plant 17.6 MW operating, 26 MW total (6 x 4,4 MW)MW)
■ Primary Gyratory Crusher 42” X 65” - 500 hp
■ Pre-Crushing Circuit 900 hp Start-up June 26th operating up to design rate of 600 t/h
16
M d b kMeadowbank
Challenges Overcome
■ Management ■ Logistics – Geography■ Regulatory Environment■ Training & Cross Cultural Issuesg■ Arctic Conditions
Challenges
■Management ■ Hired & built a new team
■Logistics and Geography■ Requires long term planning – tight schedule
■ Increased competition – price reduction
■ Experienced logistics & procurement team
■Regulatory environment ■ Numerous agreements to negotiate (IIBA, Water
compensation, surface leases, production leases, etc. )
■ Permitting duplication & clarity
18
■ Permitting – duplication & clarity
Management & WorkforceAEM relies on experienced base of skilled labour in the Val d’Or area
Val d’Or used as a base for:■ Mine staff■ Mine staff ■ Technical Services■ Administration (Regional Office)■ Supplies
3 cultures working together3 cultures working together■ Inuit, French southerner, English
southerner
■ Good communication critical to avoid wrong perceptions
■ Overall – very good successMeadowbank
Workforce (Feb 11)Inuit Southerner Total % Inuit
19
Contractors 28 458 486 6%
Operation (AEM) 242 386 628 39%
Total 270 844 1114 24%
Logistics – Short Sealift PeriodSealift period is only 3 months long
20
Logistics – All Weather Road Provides AccessConnects to Baker Lake: 110 Km $60 MConnects to Baker Lake: 110 Km, $60 M
MEADOWBANK
WhitehillsLake
21Baker
BAKERLAKEAIRPORT
Lake0 10 Km
Bridge
Crossing
Challenges (cont’d)
■Training & Cross Cultural Issues■ 39% of workforce are Inuit
■High Inuit absenteeism & turnover
I d j b t i i i t■ Increased job training requirements
■ Increased cross cultural training requirements
■Arctic Conditions■Arctic Conditions ■ Steep learning curve
■ Permanent secondary crushing plant vs temporary■ Permanent secondary crushing plant vs temporary
■ Improved maintenance – equipment modified
22
Arctic Weather Conditions Extreme temperature causes mining equipment problemsExtreme temperature causes mining equipment problems
Extreme temperatures of -60C with the wind-chill caused hydraulic system failures. Oil viscosity and hose breakage i d d ti i ifi tl
23
increased downtime significantly
Arctic ConditionsBay Goose and Stormwater Dikes – Short Summer Period
24
Challenge – Meadowbank Kitchen Fire
■March 10: 460 employees on site. Outside temperature -60C with windchill
■ 315 persons evacuated in 17 hours■ 175 stayed on site, supported by the kitchen of the exploration camp■ Open pit, construction, dyke grouting and diamond drilling shutdown
Fi ft th 230 l it M i t d ti f■Fire aftermath: 230 employees on site – Maintenance and portion of mine employees
■ Temporary kitchen running and full operation with 460 persons on site by late April
■Mill running out of stockpile■ Permanent replacement kitchen will be completed by end of 2011
25
■ Permanent replacement kitchen will be completed by end of 2011
Meadowbank Site - Fire March 10th 2011
Tailings Pond Power Plant
Permanent CampProcess Plant
Shop
ConstructionCamp
26
Meadowbank Kitchen Fire Impact
27
Dining Room in the Gym
28
Open Pit Dilution
■Ore geometry changedchanged
■Too much dilution –estimated at 20-30%
T h &■Too much ore & waste movement
■Revised blasting sequence
Meadowbank blast
29
Pinos Altos blast
Challenge – Equipment Availability
100Artic Conditions
First year of operation in Extreme Weather Condition
708090
100Forecast 82‐85%
506070
ability [%
]
203040
Availa
010
30
Hauling Drilling Loading
Meadowbank Broken Ore Inventory
3,500,000
Q1 issues impact
2,500,000
3,000,000
h
Forecast
1,500,000
2,000,000
es /
Mon
th
500,000
1,000,000
Tonn
e
Total broken ore inventory
0
Dec‐09
Jan‐10
Feb‐10
Mar‐10
Apr‐10
May‐10
Jun‐10
Jul‐1
0
Aug
‐10
Sep‐10
Oct‐10
Nov
‐10
Dec‐10
Jan‐11
Feb‐11
Mar‐11
Apr‐11
May‐11
Jun‐11
Jul‐1
1
Aug
‐11
Sep‐11
Oct‐11
Nov
‐11
Dec‐11
Total broken ore inventorytarget
31
Tonnes moved Broken rock inventoryTonnes move forecasted Broken rock inventory forecasted
Meadowbank – Daily Tonnage MovedMining operations back on track after the fire
First year of operation in Extreme Weather Condition
90 000
100 000Extreme Conditions
Forecast
50 000
60 000
70 000
80 000
ved
per d
ay
Addition of 2 new trucks
20 000
30 000
40 000
50 000
Tonn
es m
ov
Kitchen Fire
0
10 000
20 000
v‐09
ec‐09
n‐10
b‐10
ar‐10
pr‐10
y‐10
n‐10
ul‐10
g‐10
p‐10
ct‐10
v‐10
ec‐10
n‐11
b‐11
ar‐11
pr‐11
y‐11
n‐11
ul‐11
g‐11
p‐11
ct‐11
v‐11
ec‐11
32
No De Ja Fe Ma
Ap
Ma Ju Ju
Au Se Oc
No De Ja Fe Ma
Ap
Ma Ju Ju
Au Se Oc
No De
Realized Forecast
M d b kMeadowbank
Operating Results and OutlookOutlook
Crushing Capacity ShortageSecondary crusher installation in late June 2011 y
Startup June 26th 2011
34
■Operating up to a rate of 600 tonnes per hour
Meadowbank – Mill Throughput Progression
400
450
9200Design Throughput : 385 t/h - Daily Operation Throughput : 8500 t/d
Pre-Crushing CircuitOperational June 26th
Mill Throughput : 405 t/h(9000 t/d)
8500
350
put 7200
8200
put*
*
385 8500
250
300
Hou
rly T
hrou
ghp
5200
6200
Dai
ly T
hrou
gh
June 26thMonth to Date
8554 t/dMill Accomplishments
150
200
H
3200
4200
Aver
age
DMill Accomplishments- Correct design & construction deficiencies- Intensive training & learning- Overall grinding circuit optimization
Improved stability & measures of control
100
150
2200
3200- Improved stability & measures of control
35
Time
**Ref. 92% Mill Availability
Meadowbank – Daily Meters Drilled
First year of operation in Extreme Weather Condition
2 500
3 000Extreme Conditions
2 000
2 500
per d
ay
Forecast
1 000
1 500
Met
ers
drill
ed
0
500
09 09 10 10 10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 11 11 11 11 11 11
M
36
Nov
‐0
Dec‐0
Jan‐1
Feb‐1
Mar‐1
Apr‐1
May‐1
Jun‐1
Jul‐1
Aug
‐1
Sep‐1
Oct‐1
Nov
‐1
Dec‐1
Jan‐1
Feb‐1
Mar‐1
Apr‐1
May‐1
Jun‐1
Jul‐1
Aug
‐1
Sep‐1
Oct‐1
Nov
‐1
Dec‐1
Realized Forecast
Meadowbank Monthly Gold ProductionProduction on track to steady state following a series of challenges
40 000
30 000
35 000Forecast 30,730 oz / month
20 000
25 000
old Oz
10 000
15 000Go ■ Improvements will
result in lower costs per ounce and tonne
5 000
37
Realized Oz Forecast Oz
Meadowbank Gold Production ForecastSecondary crusher expected to significantly boost production
Challenges overcome:Crushing capacityExtreme weatherBlasting sequence
100,000 oz
120,000 oz
Blasting sequenceEquipment availabilityKitchen FireDilution/Blasting
60 000 oz
80,000 oz
40,000 oz
60,000 oz
0 oz
20,000 oz
38
Estimated gold production (Q) Historical gold production (Q)
Agnico-Eagle’s overview of Nunavut – 4 years laterOpportunities & observations
■ Great community support, councils, people, businesses■ Excellent mineral potential■ Excellent mineral potential■ 35 new joint ventures formed■ Agreement with NTI completed on prospective claims■ Shipping costs have declined, more flights■ Declining unemployment■ Increasing interest in training■ Increasing interest in training■ Gained valuable experience in developing future
projects
■ Developed regional GN Gov’t of Canada community■ Developed regional, GN, Gov’t of Canada, community, personal and business relationships
■ Better understanding of Inuit culture
39
Future
■What’s next for Meadowbank■More training Increase % Inuit in every department■More training – Increase % Inuit in every department■ Keep expanding hiring in all of Kivalliq■ Optimize the mill and the mine ramp up■ Optimize the mill and the mine ramp up■ Decrease the unit operating costs■ Complete dyke construction work (2013)
40
Questions ?
41
A solid financial position, low-cost structure, well funded growth projects in regions of lowwell-funded growth projects in regions of low
political risk, and a focused, consistent strategy put Agnico-Eagle in a strong position to continue
creating exceptional per share value.
Executive and Registered Office:
145 King Street East Suite 400
Sean BoydVice Chairman and 145 King Street East, Suite 400
Toronto, Ontario, Canada, M5C 2Y7Tel: 416-947-1212Toll-Free: 888-822-6714 Fax: 416-367-4681
Chief Executive Officer
Ebe ScherkusPresident and
Chief Operating Officer
Ammar Al-JoundiSVP Finance and
Chief Financial Officer
David SmithSVP Investor Relations
Trading Symbol:
agnico-eagle.comTrading Symbol:
AEM on TSX & NYSE