Agnico-Eagle’s Gold Production Increased 73%

 

TORONTO, ON - "Agnico-Eagle's production growth continues as third quarter gold production increased 73% over the third quarter of 2008. However, our production ramp-up has not been as rapid as we had anticipated which has negatively impacted third quarter earnings. We expect a dramatic improvement in fourth quarter production and cash costs with increased output at our Kittila and Lapa mines and the ramp-up of production at our Pinos Altos mine in Mexico", said Sean Boyd, Vice-Chairman and Chief Executive Officer.  Meadowbank remains on schedule for initial production in the first quarter of 2010. All necessary construction materials and consumables are on site. At the LaRonde Extension, shaft sinking almost complete and underground development is to begin shortly.

The increase in production, relative to the third quarter of 2008, is attributable to significantly higher production from Goldex, in Canda, as well as production from the Lapa, Kittila and Pinos Altos mines, which were not in production in that quarter.

The higher cash costs are largely due to a stronger Canadian dollar and the fact that several of the mines remain in the start-up/optimization phase and contain no byproduct metals.

For the first nine months of 2009, Agnico-Eagle recorded net income of $38.6 million, down from the $51.3 million recorded in the first nine months of 2008. Excluding the foreign currency translation gain and loss recorded in the 2008 and 2009 year to date results respectively, year to date net income was significantly higher on the strength of a 76% increase in gold production and stronger gold and base metal prices.

Payable gold production in the first nine months of 2009 was a record 329,628 ounces at total cash costs per ounce of $391, up 76% from 187,402 ounces at total cash costs of $15 per ounce in the first nine months of 2008.

Full year production is now expected to be approximately 500,000 ounces of gold. The decrease from previous guidance is due to the slower than expected ramp up of the Kittila mill, in Finland, the mining of lower grade blocks at Goldex and the higher than expected ore dilution at the start-up of Lapa, in Canada. The early stages of commissioning the plant, specifically the filter presses in the mill, at Pinos Altos is also taking longer than expected. However each of these operations made significant progress late in the third quarter of 2009. As these operational improvements continue into the fourth quarter, record quarterly gold production of approximately 170,000 ounces is expected.

Full year 2010 guidance is reduced to between 1.0 million ounces and 1.1 million ounces of gold. The decrease is due to the decision to add a further contingency to the start-up phase of the new mines based on the experience in commissioning three new mines in 2009. However, the long term production forecasts for these mines remain unchanged. Additionally, five internal expansion opportunities have the potential to further increase the Company's gold production by more than 50% from 2010 through 2015.

The company’s address is 145 King Street East, Suite 400, Toronto, ON M5C 2Y7.