Agnico Eagle Mines Limited

Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle second quarter results 2023 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, you may press the pound key. And now I will turn the call over to Mr. Amar Al-Jundi. You may begin.

Thank you very much, and good morning, everyone. Before we jump in, I would like to point out that we will be talking about some forward-looking concepts and statements, and there's some documents at the beginning of the package that you might want to go through. We have our team with us today. We're going to be in a very good position to talk about the quarter and a very good position to answer questions afterwards. But really, today there are only three key takeaways that we'll go through. One, we had a very strong operating quarter, consistent performance by the team across all the sites, and I'm proud to say now for several quarters in a row. Two, excellent progress. on our Abitibi optimization programs. As many of you know, we have a very ambitious program to consolidate and optimize our Abitibi platform. We believe we have the potential to add several hundred thousand ounces of additional production potentially, and we've made some good progress on that, and we'll talk about that and where we are. And the third point is we've had some excellent exploration results. Guy will talk about that. But excellent results across many of the operations and I would say that all of these results are in places we already operate. We have infrastructure, we have teams and we have the capacity to utilize and leverage off existing infrastructure. These are not exploration results. at the top of a mountain range in the middle of nowhere. These are in our backyard, and they will make a big difference. Guy will talk about it. In fact, we're so confident that we've increased his exploration budget, putting us over $300 million this year, demonstrating, again, the confidence we have in the business. When we talk about strong operations, just hitting some highlights, record quarterly production, costs, $840 cash costs at the bottom of our guidance range, all with another quarter of exceptional safety performance. I'm proud to say that we have now had the safest first half of the year ever in the 66-year history of the company. There is nothing more important than the safety of our people and our communities. And I've said it before, I'll say it again, you cannot have that kind of safety performance without excellent operating capabilities, and you can't have the kind of operating results we've had without that type of safety performance. That's all led to, impressively, record quarterly cash flow, and Jamie Porter will be talking about our financials later on. So hitting some highlights, payable gold production of 873,000 ounces, good quality. cost control, all in sustaining costs of $11.50 an ounce, cash costs of $840 an ounce at the bottom end of our guidance, generating almost a billion dollars of operating cash flow this quarter. Just getting into a few more, just frankly, I'm quite proud of this, so I'm going to hit a few points. Malardic produced its 7 millionth ounce since we've had it in 2011. We've updated the Odyssey project. Dominic is going to talk about that, but just some highlights. An additional 1.7 million ounces, additional three years out to 2042. And most importantly, still open at depth, still getting some very good exploration results in geologic upside. I mentioned on a call this morning, Malartic was discovered by the Goldie brothers in 1923. So that mine has been around for 100 years. It's produced with us and previously over 12 million ounces. It's got a mine life out another 20 years. It's still open. It is just a great example of putting yourself in the best places in the world based on geologic potential and political stability. 100 years and plus. Detour. Natasha is going to talk about some of the great progress the team has made there. to build that mine, but from an operating perspective, proudly record quarterly mill throughput at Detour. At Goldex, record quarterly mill throughput since the restart. At Macasa, record quarterly mill throughput, record skip tons, record underground development. The team there has really, frankly, delivered on that mine. Great ore body, great operating team. Meliodine, record monthly mill throughput in May, and Meadowbank record production for the first six months of the year, again with one of the safest quarters in the company's history. I'll address the question now because we'll get it later, I'm sure. With the very strong start of the year, we are already being asked, are we going to update and improve guidance? What I would say is it's very early. We've only had the first two quarters. But I will say we are clearly off to a very strong start. We are clearly tracking production that would be above the midpoint of our guidance, and we are clearly tracking costs very well relative to our guidance. So an excellent start of the year. We're very confident, and we're confident going forward. Next slide. Actually, keep it on this slide here. So if we do the update on the key drivers again, Natasha and Dominic are going to talk about it. I'll just hit a few points. As I mentioned, Canadian Malartic, we updated the internal study in June. We talked about the additional ounces, the additional years, the potential there. But really what's exciting more than anything is the significant geologic upside that we continue to see there. That is a fantastic asset. At Detour Lake, Natasha is going to talk about it. The great progress we've made, but also Guy is going to talk about some of the exploration results to bring in potentially underground ore. Remember, our objective at Detour, our vision, is to try to get that to a million ounces a year. This is a mine that's already out to 2052 that is still going to be increasing And to get it to a million ounces a year, it's going to be a combination of increasing the mill throughput and bringing in higher grade ore from the underground. And we're working on that. And we'll be looking to give some updates in the first half of next year. On optimizing some of the other assets, good progress looking at the potential at Macasa, the upper zones in Amalgamated Kirkland. We're doing our work on Upper Beaver. We're doing our work at Wassamak. As I remind everyone, the opportunities there are not just the base case standalone for those projects, but really what we're excited about and what we're working hard on is can we develop those assets without having to build additional mill capacity and utilize existing infrastructure, mill infrastructure and tailings infrastructure at either Mallardic or at La Ronde. As a reminder, the Upper Beaver and Wassamak each have a potential for between 150,000 to 200,000 ounces a year. Amalgamated Kirkland and the Upper Zones at Makassar, 20,000 to 40,000 ounces a year, and that's progressing well. So just between those projects, we have the potential for an additional 350,000 to 450,000 ounces a year using existing infrastructure, which reduces our permitting risk, which reduces our environmental footprint, and materially increases our return on capital. That's something we're very focused on. And that doesn't include other projects, for example, at CAMFLO, for example, potentially at Second Shaft at some point at Mallardic. Now, before I turn it over, we're also getting questions on how are these studies going Frankly, they're going well. There are no delays whatsoever. We expect to start to come out with some guidance in the first or second quarter of next year. But understand something as simple as, you know, the underground at Mallardic, it just takes a lot of drilling. These things just take a little bit of time. And frankly, I'm very impressed with the way the team is working and the progress made. And again... we expect to be able to start giving some guidance in the first or second quarter next year. You know, not everything is probably going to work, but things are looking pretty well so far. So with that introduction, I will turn it over to Dominic to talk first about Odyssey.

Thank you, Amar. Odyssey project, if we put it in perspective, the first hole where we discovered the East Goldie Zone in 2018. In 2021, we released the first study and we just updated that one last June. Very good improvement where production profile increased by three years. So we have now in front of us a 20 years life of mine with 8.5 million ounces on the production plan. And this is just the beginning. As Ammar said, This is, there's still full of potential to just increase those zones and eventually maybe also on the regional aspect too. Maybe one important point about that updated study and where we are today is we de-risked the project with now, in 2020, we had 5% of the quality, the answers which were under indicated resources, now we're up to 53%. which is a good news, and the grade is still there. There's no discrepancy. The team are happy about that. And also, we have now 60% of the surface construction completed in the last two years and a half, which was not the easiest year to do that, but I need to say the fact that we were in a B2B, the fact that also we had... good guys, good leaders with experience to deliver that. This has been done, very well done in those years. And I have in the room here Serge Blais and Daniel Paré, which are two leaders, key guys, which have worked on that. We are now going to reduce the pace of the construction. The workers outside are going to decrease from 400 to 150, so it's going to be easier paced. And now we're getting into the next phase, which is sinking the shaft. But overall, at the current gold price, the value of the project is $2.5 billion with a 33% return on the investment. An update on the ramp, how it's going. Odyssey South ramp up going on track. So the team did over one kilometer drilling last month. In May, it was a record. So we are now at 600 meters below the surfaces. And we start the production from the Odyssey South Zone, which is the first one we're going to mine there for the next three, four, five years at approximately 80,000 ounces per year. We are on track with that. Maybe a good news on the reconciliation so far, we talked to you about the internal zone, which was something difficult to see from the surfaces or to understand from the surfaces. Now we're touching it, and we see that there is upside through those zones. And that could potentially add more ounces from 2024 to 2027, but it is still early. We're defining the infill drilling program right now to better understand those zones. The first dope was supposed to be 30 tons at 2.6. It ends up to be 45 tons at 2.9. So this is a great bonus that we had. The next important phase also is all the shaft sinking. So to access the east Gaudi zone, which you could see on the bottom left of the figure, there's two things. We need to bring the ramp and to build all the infrastructure and to start to develop the first pyramids. We also need to sink the shaft. So it's a 1.8-kilometer shaft. Today we're at the 76-meter done, and we need – We are also in the step that is now back to the, or we're just initiating the full cycle to sink the shaft. So we took the first four-meter bench last week, and the next one is coming in the coming weeks, and we start to installing the seal. So that's a good news. That was an important step, and all the construction done behind in the past year was to achieve that. So everything is on track on that side. We had up to... 16 drills uh on the property in the in the second quarter so as you could see we're still drilling intensively in the past year we've put emphasis on to doing conversion again to de-risk that study but now we're turning back to do more exploration and potentially add resources and on top of that we need to recall that the mill have a 40 000 ton per day capacity still available in the one of the best place in the world so we have homework to do to bring some answers through that meal So on that, I would pass the microphone to Natesha.