TORONTO, Oct. 26 /PRNewswire/ - Agnico-Eagle Mines Limited today reported a third quarter net loss of $1.4 million, or $0.02 per share compared to a net loss of $5.1 million, or $0.09 per share in the third quarter of 1999. Operating cash flow increased to $1.5 million, or $0.03 per share, compared to a deficit of $5.5 million, or $0.10 per share in 1999.
Highlights for the quarter included:
- Mine and mill expansion to 5,000 tons per day completed on schedule in early October with mill already operating at peak tonnages of 5,500 tons per day.
- Penna Shaft operating at 5,000 tons of ore per day with peak tonnages of over 7,000 tons of ore per day.
- Gold production and cash costs on budget for the quarter and year to date.
- Definition drilling continues to identify higher than average gold grades in Zones 20 North and 20 South. Deep drill program resumed in the quarter.
"The LaRonde Mine is now positioned to generate increasing cash flows from higher gold production and sharply lower unit costs", said Sean Boyd, President & CEO. "Our efforts over the next few quarters will be focused on optimizing our operations at LaRonde to maximize cash flow and expand our reserve and resource position through the continuation of our drilling program", added Mr. Boyd.
The Company is hosting a conference call today at 2:30 p.m. to discuss third quarter results and to provide an update on exploration and development activities. To participate in the conference call, please dial (416) 620-2412. To access the rebroadcast, please dial 1-800-558-5253 and enter the reservation number 16619422.
OPERATING RESULTS AND FINANCIAL POSITION
Cash operating costs to produce an ounce of gold improved dramatically in the quarter to $199 per ounce compared to $375 per ounce in the third quarter of 1999 due to higher realized grades for all metals as the transition from Shaft No. 1 to the Penna Shaft continued. Gold production of 39,230 ounces in the third quarter was better than budget and an improvement of 161 percent from a year ago. Cash flow will continue to increase in the fourth quarter as gold production remains on target at over 70,000 ounces. Cash costs are anticipated to be approximately $75 per ounce in the fourth quarter.
At September 30, 2000 Agnico-Eagle's cash balance, excluding bullion on hand, was $9.2 million with a working capital position of $16.8 million. Including the undrawn portion of its bank facility, Agnico-Eagle has $52 million of available liquidity. Approximately $40 million remains to be spent to complete the LaRonde expansion program through 2002.
DRILLING AND EXPLORATION
Five drills were in operation at the end of the third quarter. One drill was devoted to delineation drilling in the upper part of the mine, two drills to resource conversion on the western extension of Zone 20 North between Level 134 and the shaft bottom, one drill to the deep exploration program and the fifth to the 20th Level Exploration Drift extending previously drilled holes on to the El Coco property.
On Zone 20 South drilling for production purposes above the 122 Level focused on delineating mining blocks to be mined during the fourth quarter of this year. The results, tabulated below, continue to confirm the increase in grade up plunge and to the east of the known Zone 20 South reserve:
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True Gold(oz/ton) Silver
Drill Hole Thickness(ft) Cut(2 oz) (oz/ton) Copper(%) Zinc(%)
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12821691 22.0 0.25 1.51 0.79 1.60
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12821692 22.3 0.24 1.24 0.60 1.59
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11421781 23.0 0.53 2.15 0.39 2.88
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11421782 25.3 0.53 7.42 0.47 6.00
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11421783 21.3 0.73 3.19 0.74 5.11
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11821821 22.6 0.23 1.97 0.21 3.63
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11821822 25.9 0.51 5.16 0.34 6.48
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11821751 40.7 0.30 1.28 0.32 2.18
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11821771 42.3 0.31 1.85 0.58 3.15
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A total of six drill holes were extended from the 20th Level Exploration Drift onto the El Coco Property. The objective was to test for Zone 20 South extensions upward to the 20th Level and to the east. The most interesting value to date was as follows:
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True Gold(oz/ton) Silver
Drill Hole Thickness(ft) Cut(2 oz) (oz/ton) Copper(%) Zinc(%)
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20-111 9.2 0.04 0.87 0.02 2.81
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This drill hole intersected Zone 20 South above the original 20th Level Exploration Drift. Although lower in grade, the drill hole confirms the presence of Zone 20 South beyond the current reserve outline. Results are pending on the remaining drill holes which were drilled to the west of this hole. Further development is required to explore this favourable horizon to the east.
Delineation drilling on Zone 20 North above Level 149 continued to confirm the existence of higher-grade pockets. These localized pockets are significantly higher grade than indicated by original widely spaced exploration drilling. These values, outlined below, will be incorporated into next year's mining plan:
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True Gold(oz/ton) Silver
Drill Hole Thickness(ft) Cut(2 oz) (oz/ton) Copper(%) Zinc(%)
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11420702 22.0(Au) 0.25 3.38 0.41 0.61
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11420702 9.2(Zn) 0.03 1.55 LV 3.57
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12820693 23.9(Zn) 0.02 1.74 0.01 11.59
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11420681 13.1(Au) 0.42 2.24 0.78 0.03
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11420683 11.5(Au) 0.50 2.60 1.35 0.23
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11420683 21.0(Zn) 0.02 1.44 0.06 5.28
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11820651 13.8(Au) 0.14 1.02 0.51 0.11
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11820651 23.0(Zn) 0.03 2.44 0.04 9.31
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14620611 12.5(Au) 0.09 1.39 0.27 2.47
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14620611 43.6(Zn) 0.03 3.52 0.06 10.53
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14920612 10.8(Au) 0.17 2.36 0.45 0.19
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14920612 56.4(Zn) 0.02 6.15 0.09 10.58
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Drilling resumed on Level 160 to convert the remaining resource along the western margin of the deposit. DDH 3160-08 returned the following value along the presently known western limit of Zone 20 North.
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True Gold(oz/ton) Silver
Drill Hole Thickness(ft) Cut(2 oz) (oz/ton) Copper(%) Zinc(%)
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3160-08 26.2(Au) 0.39 0.50 0.21 1.21
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This particular intercept consisted of stringer to semi massive pyrite with low copper values very similar to the higher-grade gold intercepts previously encountered at depth. This result was another indication of potentially higher-grade gold mineralization along the western margin of the deposit. Drilling will continue to test for the western extension at this horizon.
The six hole deep drill program was resumed during the quarter. DDH 3206- 10 intersected Zone 20 North at a depth of 8,200 feet below surface further to the east than anticipated. The drill hole intersected a broad zone of stringer to semi massive pyrite with significant amounts of chalcopyrite mineralization. The values are as follows:
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True Gold(oz/ton) Silver
Drill Hole Thickness(ft) Cut(2 oz) (oz/ton) Copper(%) Zinc(%)
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3206-10 95.1 0.08 0.47 0.55 0.04
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or 59.1 0.10 0.56 0.61 0.05
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This drill hole indicates a broad zone of mineralization in excess of 100 feet thick with increasing copper values to the west. Two drill holes have been targeted to intersect the area to the west at this particular horizon. Overall, five drill holes remain to be completed of the original six hole program.
EXPANSION
In the mill, the precious metals circuit was commissioned during the month of September. The mill was shut down the first three days of October and the changeover to 5,000 tons per day was successfully completed. Commissioning was smooth and metal recoveries to date are within design parameters. Gold recoveries have averaged over 90% and zinc recoveries are currently averaging over 80%. Peak tonnages of 5,500 tons per day have already been achieved with the mill operating at an average daily rate of 5,000 tons per day since October 3rd.
Most of the underground infrastructure to enable the mine to sustain production at the 5,000 ton per day rate above the 152 Level has been completed and is in place. The single item remaining to be completed was the Level 149 ore pass rock breaker installation. The new hoist and 152 Level load out have achieved planned hoisting rates. Peak tonnages of over 7,000 tons of ore per day have been hoisted. Mining conditions continue to be excellent with dilution averaging under 10%. Development has begun on the lower part of the Penna Shaft zones with level development on Levels 170, 194, 215 and 220. Gold production is expected from these levels in 2002 resulting in an expected increase in annual production at LaRonde to over 300,000 ounces.
The Longitudinal illustrations that detail the drill results presented in this report can be viewed, prior to the conference call, and/or downloaded from the Company's website:
www.agnico-eagle.com (Press Release)
This press release contains certain "forward-looking statements" (within the meaning of the United States Private Securities Litigation Reform Act of 1995) that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties are disclosed under the heading "Risk Factors" in the Company's Annual Information Form (AIF) filed with certain Canadian securities regulators (including the Ontario and Quebec Securities Commissions) and with the United States Securities and Exchange Commission (as Form 20-F).
Agnico-Eagle Mines Limited is an established Canadian gold producer with operations located principally in Northwestern Quebec and exploration and development activities in Quebec, Ontario and Nevada. Agnico-Eagle's operating history includes 25 years of continuous gold production primarily from underground mining operations. Current proven and probable reserves stand at 3.0 million contained ounces, with an additional 3.1 million ounces in the mineral resource category at its LaRonde Mine. Agnico-Eagle is currently focused on a development and expansion program at its LaRonde Division that is expected to result in increased gold production and expanded gold reserves.
Summarized Quarterly Data (Unaudited) Agnico-Eagle Mines Limited
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(thousands of United Three months ended Nine months ended
States dollars, September 30, September 30,
except where noted) 2000 1999 2000 1999
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Consolidated Financial Data
Income and cash flow
Revenues from mining operations $ 15,276 $ 5,557 $ 38,554 $ 22,873
Net loss for period $ (1,356) $ (5,063) $ (8,266) $ (9,698)
Loss per share $ (0.02) $ (0.09) $ (0.15) $ (0.18)
Operating cash flow (Note 1) $ 1,535 $ (5,500) $ (4,216) $ (7,100)
Operating cash flow per share $ 0.03 $ (0.10) $ (0.08) $ (0.13)
Weighted average number of shares
- basic (in thousands) 54,389 53,257 54,319 53,345
Operating and Financial Summary
LaRonde Division
Revenues from mining operations $ 15,276 $ 5,557 $ 38,554 $ 22,873
Mine operating costs 12,586 6,488 36,219 21,896
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Mine operating profit (loss) $ 2,690 $ (931) $ 2,335 $ 977
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Tons of ore milled 326,648 182,992 958,415 570,570
Head grades:
Gold (ounces per ton) 0.14 0.09 0.13 0.14
Silver (ounces per ton) 1.60 0.61 1.16 0.66
Zinc 3.28% 0.95% 2.24% 0.91%
Copper 0.34% 0.25% 0.33% 0.35%
Recovery rates:
Gold 90.27% 92.58% 90.66% 93.96%
Silver 65.80% 53.80% 62.90% 61.40%
Zinc 67.20% 44.90% 66.70% 53.40%
Copper 58.30% 66.90% 64.10% 74.50%
Payable production:
Gold (ounces) 39,230 15,024 102,844 73,824
Silver (ounces in thousands) 266 49 541 195
Zinc (pounds in thousands) 12,562 1,303 24,128 4,651
Copper (pounds in thousands) 1,222 603 3,749 2,807
Realized prices (US$):
Gold (per ounce) $ 278 $ 263 $ 284 $ 273
Silver (per ounce) $ 4.92 $ 5.15 $ 5.07 $ 5.28
Zinc (per pound) $ 0.53 $ 0.49 $ 0.53 $ 0.48
Copper (per pound) $ 0.84 $ 0.72 $ 0.82 $ 0.67
Onsite operating costs per ton
milled (Canadian dollars) $ 57 $ 53 $ 56 $ 57
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Operating costs per gold ounce
produced (US$):
Onsite operating costs (including
reclamation provision) $ 320 $ 431 $ 352 $ 296
Less: Non-cash reclamation
provision (5) (4) (5) (4)
Net by-product revenues (116) (52) (94) (36)
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Cash operating costs $ 199 $ 375 $ 253 $ 256
Non cash costs:
Reclamation provision 5 4 5 4
Depreciation and amortization 34 103 38 58
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Total operating costs $ 238 $ 482 $ 296 $ 318
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(1) Before non-cash working capital
Consolidated Balance Sheets Agnico-Eagle Mines Limited
as at September 30,
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(thousands of United States dollars) December 31,
2000 1999
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(Unaudited)
ASSETS
Current
Cash and cash equivalents $ 9,215 $ 22,588
Metals awaiting settlement and gold bullion 16,487 5,857
Income taxes recoverable 728 2,353
Inventories:
In-process 1,443 2,390
Supplies 2,894 3,739
Prepaid expenses and other 2,677 3,857
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Total current assets 33,444 40,784
Investments, loans, advances and other assets 20,330 21,605
Future income and mining tax assets 16,698 12,022
Mining properties 263,048 219,817
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$333,520 $294,228
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 13,008 $ 9,770
Dividends payable 546 1,682
Income and mining taxes payable 2,287 2,913
Current interest due on senior convertible notes 789 1,896
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Total current liabilities 16,630 16,261
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Long-term debt 169,644 124,122
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Reclamation provision and other liabilities 5,138 5,061
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Future income and mining tax liabilities 9,964 9,695
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Minority interest 3,263 3,291
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Shareholders' Equity
Common shares
Authorized - unlimited
Issued - 55,603,158 (1999 - 55,391,451) 154,249 152,992
Other paid in capital 14,535 14,535
Contributed surplus 4,058 4,058
Deficit (35,537) (27,271)
Company's own shares held by a subsidiary company (8,424) (8,516)
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Total shareholders' equity 128,881 135,798
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$333,520 $294,228
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Interim Consolidated Statements of Loss Agnico-Eagle Mines Limited
(Unaudited)
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(thousands of United States Three months ended Nine months ended
dollars, except per September 30, September 30,
share amounts) 2000 1999 2000 1999
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REVENUES
Revenues from mining operations $ 15,276 $ 5,557 $ 38,554 $ 22,873
Interest and sundry income 321 561 974 2,293
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15,597 6,118 39,528 25,166
COSTS AND EXPENSES
Production 12,586 6,700 36,219 22,233
Exploration 672 688 2,019 2,051
Depreciation and amortization 1,344 1,553 3,949 4,262
General and administrative 972 877 2,901 2,988
Capital tax 262 227 816 765
Interest 2,204 2,166 6,626 6,467
Other - 970 - 970
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Loss before the undernoted (2,443) (7,063) (13,002) (14,570)
Foreign currency gain (loss) (136) (1,108) (1,044) 703
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Loss before income and
mining tax recoveries (2,579) (8,171) (14,046) (13,867)
Income and mining tax recoveries (1,223) (3,108) (5,780) (4,169)
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Net loss for the period $ (1,356) $ (5,063) $ (8,266) $ (9,698)
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Loss per share $ (0.02) $ (0.09) $ (0.15) $ (0.18)
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Interim Consolidated Statements of Agnico-Eagle Mines Limited
Cash Flows (Unaudited)
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(thousands of United States Three months ended Nine months ended
dollars) September 30, September 30,
2000 1999 2000 1999
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Operating activities
Net loss for the period $ (1,356) $ (5,063) $ (8,266) $ (9,698)
Add (deduct) items not affecting
cash from operating activities:
Depreciation and amortization 1,344 1,553 3,949 4,262
Provision for (recoveries of)
future income and mining
recoveries 297 (3,255) (4,580) (4,640)
Foreign currency translation gain
(loss) 523 959 1,362 135
Amortization of deferred interest
and financing costs on senior
convertible 910 1,073 3,240 3,139
Other (183) (767) 79 (298)
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1,535 (5,500) (4,216) (7,100)
Net premiums paid on metals,
foreign currency and interest
rate option contracts (20) - (304) -
Net change in non-cash working
capital balances related to
operations
Metals awaiting settlement
and gold bullion (5,439) 13,573 (10,630) 18,382
Inventories (212) (49) 1,792 (1,955)
Prepaid expenses and other 977 (3,095) 1,180 (675)
Income and mining taxes
recoverable and payable (1,876) (72) 999 (268)
Accounts payable and accrued
liabilities 3,235 2,695 3,238 362
Current interest due on
senior convertible notes (1,107) (1,107) (1,107) (1,108)
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Cash flows from (used in)
operating activities (2,907) 6,445 (9,048) 7,638
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Investing activities
Additions to mining properties (15,301) (15,478) (47,181) (50,550)
Decrease (increase) in
investments and other (124) (4) (114) 58
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Cash flows used in investing
activities (15,425) (15,482) (47,295) (50,492)
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Financing activities
Dividends paid - (2) (1,100) (1,022)
Shares issued under employee plans 422 416 1,151 965
Proceeds from long-term debt 5,000 - 42,500 -
Purchase of the Company's own
shares held by subsidiary
company and other 156 - 345 -
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Cash flows from (used in)
financing activities 5,578 414 42,896 (57)
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Effect of exchange rate changes
on cash and cash equivalents 279 (311) 74 1,500
Net decrease in cash and
cash equivalents (12,475) (8,934) (13,373) (41,411)
Cash and cash equivalents,
beginning of period 21,690 43,785 22,588 76,262
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Cash and cash equivalents,
end of period $ 9,215 $ 34,851 $ 9,215 $ 34,851
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Other operating cash flow
information:
Interest paid during the period
(net of capitalized interest
of $2,596 (1999 - nil)) $ 2,249 $ 2,145 $ 4,493 $ 4,415
Taxes paid (recovered) during
the period $ 1,195 $ 409 $ (1,780) $ 1,574
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SOURCE Agnico-Eagle Mines Limited
CONTACT: Sean Boyd, President and CEO, Agnico-Eagle