Agnico Eagle Mines Limited

Good morning, my name is Chris and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle fourth quarter results 2021 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two. I would now like to turn the call over to Sean Boyd, Executive Chairman. Please go ahead.

Thank you, Operator, and good morning, everyone, and thank you for joining Agnico Eagle's fourth quarter conference call. I'd like to start off by thanking Tony McCooch and the Kirkland Lake team, particularly Tony, for his contributions to Kirkland Lake, but more particularly for his work over the past several months in laying the foundation for the combined new Agnico Eagle, which, you know, as we've said, is well positioned to deliver on its production and cost guidance and deliver a high quality, low risk senior gold producer. What I will do today is I will pass the call over to our new CEO, Amar Al-Jundi. I'll congratulate Amar. And I'd like to congratulate also the Agnico Eagle senior leadership team. I'm looking forward to working with all of them. And I'm highly confident in the team's collective ability and experience to deliver on the promise of the merger. So now I'd like to turn the call over to Amar.

thank you very much sean and good morning everyone i'd like many of you on the phone i've known for a long long time i'm honored to have this opportunity i'm humbled to have this opportunity and i look forward to our discussion today because i think you will see just how exciting the future is for agnico like sean i'd like to take a minute to talk about the opportunity I've had to get to know Tony McCooch over the last six months we've worked closely together and he is a man of integrity a high quality individual a good person a good human being and he will be successful with whatever endeavor he does next and Tony we wish you the best of luck both personally and professionally going forward I have to say it's been exceptional working with the new team and looking at all the opportunities. I'm 57 years old. I've been in this industry for 23 years and I've never been more excited about the ability to add value than I am today. And I hope that message will come out loud and clear as we go through the day. The key messages today are going to be forward-looking much more so than backward-looking. And remember to look at the forward-looking statements. They are now up to four pages long with increasingly small print. But the other looking forward is that Agnico Eagle is going to maintain the simple, consistent, disciplined, and proven approach to value creation that we've always had. and that frankly Kirkland has always had. Low cost, strong margins and strong cash flows. Robust production profile with tremendous growth in safe jurisdictions. A proven leadership team with a proven track record of being able to create value on a per share basis. We're going to talk about three-year guidance of 3.2 to 3.4 million ounces. Growing slowly, but importantly, we view this as a base from which to grow, and we think we will grow, and we'll talk about that. Record mineral reserve, 44.6 million ounces of gold, with the potential to grow both in the short term and the long term, and we'll talk about that later on. I'm going to spend some time confirming the opportunities we see with regards to the synergies in fact we see opportunities that are greater than the expectations that we identified when we announced the merger and we'll talk about that and then finally and importantly building on our long history of capital returns announcing a 14% increase in the quarterly dividend to 40 cents per share and our intention to launch a normal course issuer bid to repurchase up to $500 million of our shares. Now, I'm going to take a minute and say a lot of us are now repurchasing shares, and this is, think about it, what a nice difference from 10 years ago when the share price went up and people weren't repurchasing shares. This demonstrates a discipline in the industry that wasn't there 10 years ago, and it demonstrates that this discipline is not just with us, but with all of our peers, which is good for the gold industry and good for all of you, our investors. Next page, please. We have a proven and trusted leadership with decades of experience, led, of course, by Sean Boyd, our executive chair. But the board also has some other strong names that you know. Jeff Parr as vice chair, who has been the chairman of Kirkland Lake. as they've created lots of value for shareholders. And Jamie Sokolsky, our lead director, one of the most distinguished professionals in the gold space. We also have a very strong management team that I think most of you know, most of you trust. It's on the list here. I won't go through it name by name, but it combines excellent people from both companies. And what I will say is... The bench strength of this new company is exceptional. The quality of the management team is not just what you see on this chart, but goes down many levels. We are continuing to focus on growing the business. As I mentioned, we've got record reserves. But what I'd like to point out in this chart on page eight is it's all about building a pipeline and creating value over the long term. To create value, you have to find gold in the ground. To create reserves, you have to find resources. And we are doing that across the board and continuing to do that. And what you'll see is this formula that we've had, which has worked for us over the last decade, where Agnico Eagle, the combined entity, has increased reserves by over 100% over the last decade. Compare that to many of our peers. This is not a knock against the peers. It's simply to say... that this is the toughest part of the business finding pipelines of quality and profitability to grow this is what we do well and we're going to keep that strategy we're going to focus on growing mineral mineral reserves and mineral resources through continued exploration and we'll talk about our very aggressive exploration program this year we're going to be announcing increased reserves when we give our technical report at detour uh in the middle of the year and again an aggressive exploration program in 2022 but importantly and differentiating in very safe jurisdictions and most of that is off existing infrastructure and as most of you know the best return on capital the best risk-adjusted return on our on capital in this business is taking advantage of existing infrastructure in safe jurisdictions Page 9, we show on the top left our ability, both Agnico Eagle in gold and Kirkland Lake historically in blue, of growing gold production, but more importantly, gold production per share. Gold production in and of itself is nice, but it doesn't matter. What really matters is production and profitability per share, and that's what we focus on. And as you can see, through our long history of growing, we grow production, then sometimes you plateau off a base, you continue to invest, then you grow again, you plateau, you continue to invest, then you grow again. And that's what's happening with us. Both Kirkland Lake and Agnico Eagle, both of us individually had record production last year. Both of us individually had record production per share. That's impressive. At Agnico Eagle, record production per share after 64 years is really remarkable. But the next three years are a little bit of growth. The middle of guidance growing from 3.3 to 3.35 million ounces, but again, this is a base from which we can grow, and we think there's opportunity to increase that number as we go out. The gold production is underpinned by... Six cornerstone world-class assets producing more than 300,000 ounces a year. Detour, Fosterville, Meliodine, Leron, Meadowbank and Canadian Malartic. And importantly, Agnico Eagle continues to invest in the future. We are investing over $300 million in exploration. That's quite remarkable. $324 million in exploration. and development capital above sustaining development capital of $700 million. So I'm going to ask Guy Gosselin and Eric Calio to talk a little bit about some of this exploration because it really is exciting. But before they do, I just want to point out that all that we're going to talk about on page 10 and 11 as we go through it, if you look at it, All of this is either on existing assets where we have existing infrastructure in safe jurisdictions or new projects in jurisdictions we've been operating for decades. So if I could, and excuse me if we have any technical issues, but I would like Eric Calio, who has been the head of exploration at Kirkland Lake and is going to be chief growth and exploration at the new company along with Guy. Maybe, Eric, if you can talk a little bit about Detour and Macassar and Fosterville. Thanks, Mark.