Agnico Eagle Mines Limited

Good morning. My name is Julie and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle Four Quarter Results 2022 conference call. All lines set and placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. Thank you. Mr. Ammar Al-Jandi, you may begin your conference.

Thank you very much and good morning, everyone. It's a pleasure to be here and have the opportunity to talk about 2022, but more importantly, about 2023 and beyond, where we are quite excited and we see some exceptional opportunities that by the end of the call, I think hopefully all of you will see them with us. Just before we jump in, some forward-looking statements you should take into account the normal sorts of things but why don't we then just jump right in on on page five so uh we're going to talk about again 2022 and 2023 i would say that 2022 full year can be characterized by two things number one solid and strong operational performance but number two and this is important some very strategic consolidations that have led and will lead to some great opportunities that we're going to talk about. On the operations side, for the full year, we had a strong year with regards to production meeting our guidance, but I would say more impressively costs meeting the upper end, slightly above the upper end of our guidance where we had told the market we would come out. We all know that 2022 was a tough year for inflation. It was a tough year on the workforce side, but the company delivered quite well overall. We had continued advancement of some key development projects, Odyssey, Detour Lake, some other key projects that we're going to talk about, and we delivered all of that with the company's best safety record in 66-year history of the company. That's impressive. At the same time, we repaid $225 million of debt with cash as it came due, and we paid a dividend of 40 cents per share, quarterly dividend continuing, which is at a good level. At the same time, we increased mineral reserves by 9% to almost 50 million ounces. So a very strong year operationally, I think, across the board. And we'll talk about the fourth quarter where there were a few more challenges But I'm very proud of the team for what they delivered this year. On the strategic consolidation, very successful merger and integration between Agnico Eagle and Kirkland Lake. That went very well. I use the past tense because it's done. We delivered synergies faster and in greater quantum than we expected. thought we would, which is great, and frankly, the teams are working exceptionally well together, and you will see that when I talk about 2023 and beyond. Secondly, we're looking forward to the pending acquisition of Yamanis Canadian assets, including, most importantly, the other 50% of the world-class Malartic mine and all the potential that it has. Those two strategic deals, the consolidation of of Kirkland and Agnico and the acquisition of Yamana's Canadian assets are core and fundamental to our strategy, which is to consolidate the best operating regions in the world for gold mining. Next page, please. And I want to take a minute, because we talk about this a lot, but sometimes a picture is worth a thousand words. And what we try to show here is what this Abitibi gold belt means for us. It's a region about 160 by 200 kilometers, and let's take a look at some of these numbers. Mineral reserves, over 30 million ounces. Resources, over 30 million ounces. Inferred resources, about 20 million ounces. These numbers are about the same as the total Nevada gold mine, JV, but in this case, we own 100% of it, and we've been operating here for over 50 years. So we think this region has a lot of potential, and that's what we're going to be talking about. We will be producing in excess of 2 million ounces from this region at about $800 cash cost, and this region also is a fundamental part of our ability to operate, we think, with a strong competitive advantage in Nunavut, as this is a basis for a lot of those operations And Nunavut, again, going to be between 800,000 and 900,000 ounces of production. So you can see the quantum of this strategy of combining and consolidating what we've done over the last couple of years. Now, when we did the merger with Kirkland, and this time last year when we had this call, there was a lot of emphasis on synergies. But we said very clearly we didn't do the merger because of synergies we did the merger because of what we saw was a huge potential to consolidate this region and leverage off our competitive advantage in what we think is one of the best places in the world as measured by geologic potential and political stability. So as we look forward and I'll next stage please that's what we're going to be talking about in 2023 and going forward. It's really where last year was about integrating the companies, delivering on the production guidance, and consolidating this region. 2023 is all about optimizing what we've got. There's a lot we're working on, but I'm going to hit three things, and I think this is the most important page in the entire presentation. And these are only the three biggest. There are a lot of others. But detour lakes. We continue to have exceptional exploration results at depth and moving west. We are continuing to assess, and Natasha and the team have done a great job already with the mill expansion. We think we can expand, and we're looking at opportunities to go from 28 million tons to 30 million tons with minimal CapEx investment. And remember, the permitting is up to 32 million tons. And importantly, we are continuing to work. We promised that we would do this by the end of this year. We're making good progress towards the potential for this mine to be producing over a million ounces a year for decades. And we're looking forward to continuing to work on that and seeing where we are at the end of the year and talking more about it then. The Canadian Malartic Complex, we're now calling it a complex because That's what it is going to be. We paid a fair price for the second half of Malartic based on its current life of mine. But the reason we did the deal is because we think there's a lot more potential. And we're going to talk about that a little bit. We think that there is we have already approved an increase in exploration as soon as the deal is completed, because there is a lot of exploration potential. And we'll talk about that a little later. We are going to be initiating initial production in March. We are sinking the shaft and we are assessing the potential for additional ore source at Mallardic. We think that the Mallardic complex between the ore available at the mine site and opportunities to bring in ore nearby, this could be another plus one million ounce a year producer for decades to come. So this is what we're trying to do. In the best place arguably in the world to mine, you can see that between Detour and the Mallardic Complex, potential each to be in excess of a million ounces a year for decades. And then the third item to hit briefly is using excess capacity of existing infrastructure throughout the region and leveraging that infrastructure. This is what we mean by getting the full potential and leveraging off our competitive advantage. We're going to talk about this later, but to hit the highlight, from the assets we will already own and that are near where existing mill capacity is, we think there's the potential for up to 500,000 ounces of additional production by 2030, starting slowly in 2024, but really picking up sort of 28, 29, 30 when this milk capacity comes in place. Now, in and of itself, I think that's impressive. And people talk about, you know, the best growth is organic growth. This is the best of the organic growth, because it's not just growth in areas where we exist. It is potentially growth with minimal additional capital expenditure. If you can bring a mine into production and not have to build a mill and not have to build tailings facilities, you've probably cut the capital cost of that mine in half. And you've done it in a region where you... know it's safe to operate, where you have the best reputation in town, where there is minimal environmental impact, minimal permitting impact. This really is the best organic growth. It generates the most money for our shareholders. It does it with the least risk, and it does it with the smallest environmental footprint. That, we believe, is the future of mining not just gold mining but any mining just quickly hitting on on 2024 and the fourth quarter uh the first three quarters uh i would say were exceptional quarters from an operational uh perspective we delivered above budget on production um and very good cost control the fourth quarter i would classify as a solid quarter We did have some challenges, but the team still delivered pretty well. If you think, you know, we're going to come in about the middle of our production guidance of 3.2 to 3.4, so the bottom end any quarter would have been 800,000 ounces, and that's where we came in this fourth quarter at costs of 863. What I will say is, yes, the costs were a little bit higher, more than a little bit. The costs were higher in the fourth quarter, and that is a function of two things. One, it is a function of the full inflationary pressures affecting us. Our team did a great job in 2022 of getting ahead of some of what we thought were going to be inflationary pressures. We had bought more inventory. We put on some hedges early. We did a lot of very good things that controlled costs. But we're not immune from inflation forever. And what you're seeing in the fourth quarter is some of that affecting us, including in particular as we had the sea lift at Nunavut. So the fourth quarter included those full inflationary pressures, but the costs were also impacted somewhat by some operating challenges. I'll hit Keetala and Fosterville first. Keetala, we have a restriction there. Right now, a permitting restriction on the mill throughput. We applied for the permit to go from 1.6 to 2 million tons a year. That permit was approved. It was appealed. And right now, we are dealing with that appeal. So we're limited to 1.6 million tons a year. We have put in our guidance an assumption of 1.6 million tons a year. We are optimistic it actually gets resolved in the next couple of months, but we don't know that it will. So our budget is, I don't want to say conservative, but it does assume the $1.6 million, and if things go the way that we hope they go and that we're optimistic they go, we will have an ability to produce more at Keetala and probably another 30,000 to 40,000 ounces there. And going forward, by the way, because we have that restriction in place in our forward year guidance as well. And then at Fosterville, we have a noise restriction. We were in Australia. I was in Australia with the team a couple of weeks ago. We are optimistic that that restriction, the noise restriction, which is limiting about 25% of the production at Fosterville, We are optimistic that will be lifted. We can't guarantee it. So we have not included the full production at Fosterville. But if that restriction is lifted, it would be about another 50,000 ounces a year. So I just wanted to point that out. You know, maybe some people say we're being a little bit too conservative on that, but... You know, I'm speaking to the owners of the company, and our job is to identify all of these issues, and that's what we're doing. La Ronde, we talked about La Ronde last quarter. I'll talk about it again. You know, La Ronde has been in production for 35 years. It's a fantastic mine. It's a fantastic ore body. We're hitting some of the best grades we've ever hit there. But the real word about La Ronde is sustainability. This is a mine that's been expanded five times. It has a huge amount of potential, but the reason we've operated safely, and I'm going to emphasize that word safely for 35 years and hopefully operate safely for decades more, is because we've operated sustainably. And sustainably includes, in this case, having a team of world-class rock mechanics and internal and external advisors who guide us on the best way to sustainably mine this multi-decade asset. And they have advised that we go to a slower mining rate. The gold is still there. We are just mining at a slower rate at depth. And so the opportunity at Laurent is, and frankly, this is a good thing, we are going to start exploring more laterally. You know, you always follow the highest grade gold, which is going down, and we know the gold continues to go down. But as we reduce the rate at depth, we are going to explore laterally. And, you know, it might take a couple of years, but we are confident that we will be able to find additional operating faces and increase the production rate again. And then just before I flip, it was a good year. I want to call out to Detour, which had a record year, Amarok that had a record year, and Goldex that had a record year since the restart. Next page, please. Just very quickly at some of the operating and financial highlights, operating margin of about $720 million in the quarter, about $3.1 billion through the year. You've got all this data. We don't need to go into it in detail. This is impressive as well. Not only did we increase reserves by 9%, but equally important, we increased mineral resources by 12%. The mineral resources of today set the basis for the mineral reserves of tomorrow. And so we're very proud that we not only increased reserves, reserves, but increased resources. And frankly, we think we're going to be able to continue to do this over the next several years going forward. And so at this stage, we talked about 2022. We really are excited about 2023 going forward. We identified Detour, and Natasha is now going to talk about that. We identified Mallardic. Dominic's going to talk about that. And then I'll talk a little bit about the potential for that additional 500,000 ounces towards the end of the decade. Natasha?

Thank you, Omar, and good morning, everyone. I'll provide a quick update on Detour and our vision to get to a million ounces per year. And I'll start with the mill expansion project. We continue to advance multiple initiatives to increase our mill throughput from 23 million to 28 million tons a year by 2025. And the last major initiative in our plan to achieve 28 million tons was successfully completed in 2022 with the installation of our secondary crusher screens. The installation was completed in the second half of the year with the first line completed in Q3 and the second line completed in Q4. The initial results were very encouraging. We saw a daily average throughput equivalent to 28 million tons per year, but these rates are not sustained consistently over time yet. So now the focus at the mill has shifted to optimizing the mill processes, analyzing the wear and tear from the higher throughput to optimize our maintenance practices, and basically just improving the mill runtime so that the higher throughput becomes more and more consistent over time. And based on the work that needs to be done, we see potential for a faster timeline that was expected to be achieved in 2025. And in addition to a faster timeline of getting to 28 million tons a year, as Amar mentioned, we're also evaluating a pathway to increase the mill throughput beyond that with further optimization and fine-tuning of our mill processes and our maintenance strategy as we adapt them to higher milling rates. The mill optimization includes improved process controls. We're also including the implementation of an expert system like we have at some of our other mills. So these initiatives have the potential to achieve a range of somewhere between 29 to 30 million tons a year with limited capital. And other ongoing initiatives include the screening and sorting of low-grade ore with the potential to bring the throughput even higher. And then just on the update for the underground study, an initial underground mineral resource associated with the mineralization outside of the planned final pit limits at depth and to the west is expected to be completed in the first half of 2023, and then this will be used as the basis for the potential underground mining scenarios that will be worked on in the second half of the year. But we expect to complete an initial technical evaluation by the by year end 2023. Moving to the next slide. I'll briefly touch on the exploration highlights at detour in the last quarter, and I'll start with the infill drilling program. This was a program completed in the saddle zone and just below the west portion of the pit, the area that you see that's highlighted in blue. The results shown on the right side of the slide in the first bullet continues to indicate a wide envelope of gold mineralization. And then just west of the infill drilling, just outside of that mineral resource shell as part of the expansion drilling program, you'll see that we continue to show a similar trend where we had a hole that intersected a wide zone with pretty high-grade inclusions. This one included 10.2 grams per ton of gold over 28.9 meters. And finally, the regional drilling program also showed promise. This was a program that was conducted approximately 2.4 kilometers west of the West Pit mineral resource, and it showed signs that these pockets of gold mineralization along the Sunday Lake deformation zone still continues. So all in all, very encouraging results in the quarter for detour. One other thing I wanted to mention is that the good exploration results discussed in prior quarters has led to the significant increase in the mineral resource, mineral reserve update at year end. But the exploration highlights that I'm talking about today and in the news release only became available after the MRMR year end update. So it's just, it just shows the potential to continue the growth at DTOR from both the open pit resources and advancing the understanding of the underground upside. And with that, I'll pass the presentation on to Dominic Girard, our COO for Quebec, Nunavut, and Europe.