Meadowbank Mine Analyst Tour Nunavut - June 28, Member of the World Gold Council

Transcription

1 Meadowbank Mine Analyst Tour Nunavut - June 28, 2011 Member of the World Gold Council Meadowbank, Canada 1

2 Forward Looking Statements The information in this document has been prepared as at June 28, 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 i of Canadian provincial i securities laws. When used in this document, the words anticipate, i t 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 minesites 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; t risks ik 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 forwardlooking 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 Exchange Commission. The Company does not intend, and does not assume any obligation, to update these forward-looking statements and information. Marc Legault, a Qualified Person and the Company s Vice-President, Project Development, reviewed the technical information disclosed herein. For a detailed breakdown of the Company s reserve and resource position see the February 16, 2011 press release on the Company s website. That press release also lists the Qualified Persons for each project. 2

3 Note To Investors 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, 2010, as well as the Company's other filings with the Canadian Securities Administrators and the SEC. LaRonde Goldex Kittila Lapa Pinos Altos Meadowbank 3

4 Nunavut An Integral Part of AEM s Long-Term Strategy Meadowbank and Meliadine 29% of AEM s growing g reserves and 38% of resources NUNAVUT TERRITORY CANADA Railway Seasonal Shipping Scheduled Air Route NUNAVUT Meadowbank Mine YELLOWKNIFE BAKER LAKE RANKIN INLET CHURCHILL Meliadine Project H u d s o n B a y IQALUIT RAGLAN MINE The GDP of Nunavut increased by 11% in 2010 largely due to the Meadowbank mine. Source: Conference Board of Canada 4

5 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 Cumberland acquires 100%, initiates iti t pre-feasibility studies 2005 AMEC Feasibility returns 2.8 Moz P&P within 3.8 MI&I 2006 Goose South Zone discovery 2007 Agnico-Eagle acquires Cumberland - $750 million; Construction starts km all-season road completed from Baker Lake to the site First gold is poured Feb 27, Processing plant achieves commercial production March 1. 5

6 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 Management Logistics Arctic Conditions Regulatory Environment Cross Cultural June operations above design throughput 16 months after startup June to date - 8,554 tpd 6

7 Meadowbank Construction

8 Meadowbank Project April 2007 Minimal infrastructure at the time of acquisition Camp Facilities Airstrip Crushing Plant 5.6 M litre Fuel Tank Pad 8

9 Meadowbank Site June 2011 Significant investment by AEM drastically transforms landscape in 3 short years Power Plant Tailing Pond Shop Process Plant Construction Camp Permanent Camp 9

10 Meadowbank Operations

11 Meadowbank Operating Parameters Mine Throughput: 8,500 tpd Vault Pit Metallurgical Au Recovery: 92.5% Mining Method: Mine is on IOL Land Mineral rights to NTI and Canada Average annual production: Years 1 to 4: Life of Mine: Open Pit Mineral Reserve: Three Open Pits 550 permanent jobs 400,000 oz Au 350,000 oz Au 3.64 million oz Au Airstrip Mill Site TIA Portage Pit Goose Island Pit Third Portage Lake 11

12 Meadowbank Site June 2011 Mining Operations Portage Open Pit 12

13 Processing Facilities 7000T Live Capacity Dome Power & Mill Facilities 13

14 Processing Plant Flowsheet 14

15 Process Plant 8,500 tpd design capacity SAG mill 26 x12,5 L 4,500hp Ball mill - 18 x 29 L, 6,000 hp Gravity Circuit Falcon Concentrator 1x30 with Intensive Leach Circuit Leach & CIP 15

16 Process Plant Diesel Power Plant 17.6 MW operating, 26 MW total (6 x 4,4 MW) Primary Gyratory Crusher 42 X hp Pre-Crushing Circuit 900 hp Start-up June 26 th operating up to design rate of 600 t/h 16

17 Meadowbank Challenges Overcome Management Logistics Geography Regulatory Environment Training & Cross Cultural Issues Arctic Conditions

18 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

19 Management & Workforce AEM relies on experienced base of skilled labour in the Val d Or area Val d Or used as a base for: Mine staff Technical Services Administration (Regional Office) Supplies 3 cultures working together Inuit, French southerner, English southerner Good communication critical to avoid wrong perceptions Overall very good success Meadowbank Workforce (Feb 11) Inuit Southerner Total % Inuit Contractors % Operation (AEM) % Total % 19

20 Logistics Short Sealift Period Sealift period is only 3 months long 20

21 Logistics All Weather Road Provides Access Connects to Baker Lake: 110 Km, $60 M MEADOWBANK Whitehills Lake Bridge Crossing 0 10 Km AIRPORT BAKER LAKE Baker Lake 21

22 Challenges (cont d) Training & Cross Cultural Issues 39% of workforce are Inuit High Inuit absenteeism & turnover Increased job training i requirements Increased cross cultural training requirements Arctic Conditions Steep learning curve Permanent secondary crushing plant vs temporary Improved maintenance equipment modified 22

23 Arctic Weather Conditions Extreme temperature causes mining equipment problems Extreme temperatures of -60C with the wind-chill caused hydraulic system failures. Oil viscosity and hose breakage increased downtime significantly ifi 23

24 Arctic Conditions Bay Goose and Stormwater Dikes Short Summer Period 24

25 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 Fire aftermath: th 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

26 Meadowbank Site - Fire March 10 th 2011 Tailings Pond Power Plant Construction Camp Shop Permanent Camp Process Plant 26

27 Meadowbank Kitchen Fire Impact 27

28 Dining Room in the Gym 28

29 Open Pit Dilution Ore geometry changed Too much dilution estimated at 20-30% Too much ore & waste movement Revised blasting sequence Meadowbank blast Pinos Altos blast 29

30 Challenge Equipment Availability First year of operation in Extreme Weather Condition Availa ability [%] Artic Conditions Forecast 82 85% Hauling Drilling Loading 30

31 Meadowbank Broken Ore Inventory Q1 issues impact 3,500,000 3,000,000 Forecast 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Total broken ore inventory target 31 Tonnes / Month Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Tonnes moved Broken rock inventory Tonnes move forecasted Broken rock inventory forecasted

32 Meadowbank Daily Tonnage Moved Mining operations back on track after the fire First year of operation in Extreme Weather Condition Extreme Conditions Kitchen Fire Forecast Addition of 2 new trucks Tonnes moved per day p 11 Oct 11 v 11 Dec Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Se No Realized Forecast

33 Meadowbank Operating Results and Outlook

34 Crushing Capacity Shortage Secondary crusher installation in late June 2011 Startup June 26th 2011 Operating up to a rate of 600 tonnes per hour 34

35 Meadowbank Mill Throughput Progression Design Throughput : 385 t/h - Daily Operation Throughput : 8500 t/d Pre-Crushing Circuit Operational June 26th Mill Throughput : 405 t/h (9000 t/d) Hourly Throughp put Mill Accomplishments - Correct design & construction deficiencies - Intensive training & learning - Overall grinding circuit optimization - Improved stability & measures of control June 26th Month to Date 8554 t/d put** Average Daily Through Time **Ref. 92% Mill Availability 35

36 Meadowbank Daily Meters Drilled First year of operation in Extreme Weather Condition Extreme Conditions Forecast Meters drilled per day Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Realized Forecast 36

37 Meadowbank Monthly Gold Production Production on track to steady state following a series of challenges Forecast 30,730 oz / month Go old Oz Improvements will result in lower costs per ounce and tonne Realized Oz Forecast Oz 37

38 Meadowbank Gold Production Forecast Secondary crusher expected to significantly boost production 120,000 oz 100,000 oz Challenges overcome: Crushing capacity Extreme weather Blasting sequence Equipment availability Kitchen Fire Dilution/Blasting 80,000 oz 60, oz 40,000 oz 20,000 oz 0 oz Estimated gold production (Q) Historical gold production (Q) 38

39 Agnico-Eagle s overview of Nunavut 4 years later Opportunities & observations Great community support, councils, people, businesses 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 Gained valuable experience in developing future projects Developed regional, GN, Gov t of Canada, community, personal and business relationships Better understanding of Inuit culture 39

40 Future What s next for Meadowbank More training Increase % Inuit in every department Keep expanding hiring in all of Kivalliq Optimize the mill and the mine ramp up Decrease the unit operating costs Complete dyke construction work (2013) 40

41 Questions? 41

42 A solid financial position, low-cost structure, well-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. Sean Boyd Vice Chairman and Chief Executive Officer Ebe Scherkus President and Chief Operating Officer Executive and Registered Office: 145 King Street East, Suite 400 Toronto, Ontario, Canada, M5C 2Y7 Tel: Toll-Free: Fax: Ammar Al-Joundi SVP Finance and Chief Financial Officer David Smith SVP Investor Relations Trading Symbol: AEM on TSX & NYSE agnico-eagle.com info@agnico-eagle.com