Agnico Eagle Mines Limited

operator today. At this time, I would like to welcome everyone to the Agnico Eagle Q2 2024 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 the star followed by the number two. Thank you. Mr. Amar Al-Jundi, you may begin your conference.

Good morning and thank you for joining us today. We are very excited to be reporting another exceptional quarter and to share with you some of the important work that teams are focused on to create additional value. Some of the highlights this quarter include continued strong operational performance with excellent cost control. This focus on cost control has allowed us to deliver for our owners tremendous leverage to increase gold prices, as demonstrated by our third consecutive quarter of record-free cash flow. A significantly strengthened investment-grade balance sheet with over $900 million of cash at quarter end and $250 million of debt repaid in July. We continue our long-standing commitment to shareholder returns with $50 million in share buybacks in the quarter and almost $200 million paid out in the quarterly dividend, marking over 40 years of consecutive quarterly dividends. Prudent, measured, and importantly, economically driven reinvestment into the business, including approximately $50 million of supplemental exploration budget focused primarily on Detour, Mallardic, and Hope Bay, and based on exceptional ongoing exploration results, and announcing the next steps to developing the Upper Beaver Mine an expanding detour to potentially over a million ounces a year of annual production, both investments based on exceptional projected risk-adjusted economic returns. We continue to deliver stable, reliable, consistent operational results safely and responsibly in the most prospective and the most politically stable jurisdictions in the world. With our strong first-half results, we are very well positioned to reiterate that our production and cost guidance for 2024. However, before we get into the operational and financial details, I'd like to take a moment to talk about safety and sustainability. The safety of our people, our partners, our communities, and our environment is paramount. Nothing is more important. I'm proud to say we had another strong quarter on the safety and sustainability front. This performance has been recognized by our peers with our teams recently winning several industry awards, including, to name just a few, on the safety front, from the Canadian Mining Institute, I'm sorry, from the Canadian Institute of Mining, the John T. Ryan Safety Awards for 2023 for Eastern Canada to Canadian Malartic, for the Prairie Provinces and Territories to Meliodene, and for Canada nationally to Goldex. Our mine rescue competitions, At the mine rescue competitions, our mines won a total of eight awards, including five first-place awards. On the sustainability front, Agnico Eagle's Laurent Complex was awarded the 2024 Towards Sustainable Mining Environmental Excellence Award, presented by the Mining Association of Canada. And we also recently released our inaugural Reconciliation Action Plan and our 2023 Climate Action Report. As Sean Boyd, our chairman and longtime CEO, often says, it's not just what you do, but how you do it. So well done to the teams. In our first quarter call earlier this year, with gold prices and our revenue up significantly, we chose in that call not to focus on the record cash flows we generated, but instead to focus on cost control. We wanted to emphasize cost control because While we don't control the gold price, we can work hard to control costs, and it is our strongly held and fundamental view that the benefit of higher gold prices must go to our owners, not to higher costs, and certainly not to bad projects. Our performance in this second quarter demonstrates that this focus on cost control is real, and this focus is delivering results for our owners with Q2 cash costs at $870 an ounce. I can tell you with quite a bit of pride that at every mine, at every call, at every meeting, the teams remain laser focused not only on cost control but on continuous improvement to make our operations more efficient, more productive, and to offset cost inflation where we can. And as we continue to deliver record cash flows And as we continue to accrue cash on our balance sheet, our focus is not only on continued cost control, but also on continued discipline when it comes to capital allocation. This is your money. We remain as committed to disciplined capital allocation at $2,300 gold, at $2,400 gold, as we were at $1,800 gold. In fact, the projects we will talk about today, Canadian Malartic, Detour Underground, Upper Beaver are exactly the same projects we talked about a year ago when gold prices were $1,800. We are moving ahead in exactly the same manner at exactly the same measured pace as we guided at the beginning of the year. As a reminder, at Detour Underground, we're investing in an exploration ramp and bulk sample to de-risk the project. At Upper Beaver, we are investing in an exploration shaft a shallow ramp, and bulk samples to de-risk the project. Again, these are the same projects and the same steps we guided in both February and April. Total spent for both of these combined is expected to be about $100 million a year over the next three years. This is a measured and responsible approach. These are great projects with great economics, with tremendous upside to expand and extend mine lives. They are Straight down the fairway of what we do and what we've done. These are not new projects in countries we've never been to before. They are in our backyard and we've done our homework. We have the people, the skills, the resources to take these projects prudently to the next level. Again, we're talking about $100 million a year over the next three years. Our goal is to deliver projects that not only have a great return on capital, but also a great risk-adjusted return on capital. That's what we mean by disciplined capital allocation, and that's what we aim to deliver with these investments into the business. And with that introduction and summary, I now turn the presentation over to our CFO, Jamie Porter, who will go over our financial results. Jamie?

Thank you, Amar. As mentioned, we have had a very strong first half of the year, delivering consistent operational results and excellent cost performance. In the current higher gold price environment, our focus has been on ensuring that the benefit of higher prices accrues to the bottom line and that we deliver strong financial results, and we've certainly demonstrated that this quarter. We generated record financial results for a third consecutive quarter with adjusted EBITDA of approximately $1.2 billion and free cash flow of over half a billion dollars in the second quarter. One of the key drivers to our strong financial results has been our focus on cost control. Cash costs were below the low end of our guidance in the quarter, driven by the strong operating results and the benefit of the weaker Canadian dollar, which was partially offset by higher royalty costs, which are linked to the gold price. With respect to all-in sustaining costs, we came in at $31 an ounce below the low end of guidance. This was driven by the lower cash costs as well as deferred sustaining capital. We do expect our all-in sustaining costs to increase in the third quarter as we catch up on sustaining capital. Our all-in sustaining costs are hundreds of dollars per ounce below our peers, and our all-in sustaining cost margin increased to 50% in the quarter, which is amongst the best in our industry. Taking a closer look at our financial highlights, our revenues increased by 21% over the second quarter of 2023 to over $2 billion. Importantly, our adjusted EBITDA increased by 33%, and our free cash flow increased by over 80% when compared to the prior year period. On an adjusted basis, net income per share was $1.07 in the second quarter, a 65% increase relative to the prior year. Overall, we had strong financial results for the quarter and first half of the year. We move on to slide five. During the quarter, we significantly strengthened our balance sheet, increased our liquidity to $2.9 billion, and reduced our net debt to under $1 billion, all supported by record-free cash flow. We also increased returns to shareholders through 50 million of share buybacks. In July, we repaid 100 million of senior notes on maturity. We also made an accelerated payment of 150 million on our 600 million term loan facility, bringing our total debt repayment subsequent to quarter end to 250 million. We continue to prioritize returns to shareholders with our dividend and share buybacks representing nearly 50% of the free cash flow we generate in the first half of the year. We plan to continue to strengthen our balance sheet, reinvest in the business, and opportunistically buy back shares. We move on to slide six. This slide really highlights our disciplined approach to capital allocation. When comparing to what we budgeted at the start of the year using the $1,800 gold price, we now forecast generating an additional $1 billion of incremental after-tax cash flow. We expect that approximately 80% of that incremental after-tax cash flow will be allocated to continued strengthening of our financial position and share buybacks. We also continue to reinvest in our business. We focus on projects with solid risk-adjusted returns and advance them in a phased, measured manner with incremental capital spending. We are also providing a supplemental exploration budget of $50 million for this year based on the positive drill results we've seen at some of our key projects that Guy will go over later in the presentation. While we continue to focus on our portfolio of high-quality internal growth projects, we complement this with our strategy of acquiring strategic toehold positions in emerging high-quality opportunities, which is something that Agnico Eagle has done for decades. The theme of our first quarter conference call was cost discipline. This quarter, we want to highlight that we also remain very focused on capital discipline. We're taking a measured approach with our organic growth projects, again, to ensure that the benefit of rising gold prices accrues to our balance sheet and to our shareholders. I'll now turn the call over to Dom, who will provide an overview of our operational results.