Agnico Eagle Mines Limited

My name is Vincent and I'll be a conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle Q3 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, then two. Thank you. Mr. Amar Al-Jundi, you may begin your conference.

Thank you, operator. And good morning. And thank you for joining our call today. Before we begin, may I ask you to please take note of the forward-looking statements. I'd like to start this morning by thanking our entire team at Agnico Eagle at all sites and across all functions for delivering another solid operating quarter. for doing it safely, for doing it responsibly, all while contributing to the communities in which we operate. This consistent and reliable operational performance with an emphasis on cost control and capital discipline has allowed us to deliver tremendous margin expansion for our shareholders and to deliver record financial results for the fourth consecutive quarter, including record operating cash flow and record adjusted net income. all while strengthening the balance sheet, buying back shares, and paying a strong dividend. We firmly believe the benefit of a rising gold price should go to our owners, not to increased costs, not to poor capital deployment, but to our owners. With this in mind, during this call, we will talk not only about our record financial results, but also about our record operational results. at our mines, in our mills, and throughout the organization, from exploration to procurement to treasury and beyond, all as a result of continued efforts to optimize our business. As you see on the chart to the left, 75% through the year, we're at 76% of the midpoint of our full-year production guidance. It's impressive to be within 1% of midpoint of guidance as this demonstrates not only strong operational capabilities but also strong planning and forecasting. We remain confident in meeting our production and cost guidance this year. I'm pleased in particular with our cost control. Our year-to-date costs are at $897 an ounce which is $3 below the midpoint of our cost guidance. That's pretty good considering that the increased royalty payments associated with the higher gold prices year to date versus our budget assumption of $1,800 has added approximately $20 to our reported cash costs. One of the best measures of cost control is cost per ton in local currency. I looked at this number this morning. Our company-wide average cost per ton in local currencies has not moved in over a year. That's impressive. and congratulations to the team. In a year of record gold prices and record financial margins, we have not grown complacent. Rather, we have reconfirmed and accelerated our efforts on operational improvements. Next page, please. You will all have seen our results in our press release, and we'll go through them in more detail over the next 25 to 30 minutes. But really, there are three key messages we want to leave with you. One, Strong financial results and returns to shareholders. Two, continued optimization of our operations. And three, exciting exploration and pipeline projects. On financial results, the increase in gold price, along with solid production and cost control, has led to expanded profitability and cash flow. Year-to-date, we've returned approximately $700 million directly to our shareholders through dividends and share buybacks. Year to date we've returned approximately a billion dollars indirectly to our shareholders through reduction of net debt representing a roughly two-thirds reduction of net debt since the start of the year. Jamie Porter our CFO will go through some of those numbers in more detail in a moment. On continued operational optimization we're not standing still. Dom and Natasha will discuss not only our operating results this quarter but also some of the many initiatives our teams are working on to continue our focus on improving our operations. On exploration and pipeline, we're leaving significant amount of time for Guy to talk about some of the continued outstanding exploration results we're getting. At Detour, at Odyssey, and at Hope Bay, but also at Macasa, at Meliuddin, and at Fosterville. Outstanding exploration results, all at existing assets, leveraging off existing infrastructure and existing teams in safe jurisdictions. Next slide, please. But before I turn this presentation over to Jamie, I'd like to spend a moment on safety. Safety is always our most important priority, and on this call, I'd like to take the opportunity to congratulate our Nunavut Mine Rescue Team, who last month won the 2024 International Mine Rescue Competition in Colombia against 21 other mine rescue teams from all over the world. Winning the title of overall champion is impressive on its own but it's not it's not just what you do but how you do it. Our team shared a lot of specific rescue knowledge with several teams from other countries a share of knowledge that could well mean lives saved in some of those countries at some point in the future. Remember these mine rescue teams are the teams that miners depend on when things get difficult. These are people who devote hundreds of hours of their own personal time to train and who are volunteering by definition to go into dangerous environments under dangerous conditions should the need arise to save the lives of their workmates and their friends. That's an important job that's an important responsibility. So a big congratulations and an even bigger thank you to our mine rescue teams. And with that, I will now ask Jamie Porter, our CFO, to present our third quarter financial results.

Thanks very much, Amar. Good morning, everyone. Our results this quarter really demonstrate a track record of reliable operational and cost performance that continues to translate into very strong financial results. If you recall earlier this year, the theme of our first quarter conference call was on cost control. In the second quarter conference call, we focused more on capital discipline, reinvesting and growing the business at a steady and measured pace. This focus on cost control and capital discipline is clearly paying off, with the third quarter being characterized by record financial results across the board. By keeping costs in check, we are ensuring that the benefit of higher gold prices translates into higher margins that ultimately accrue to the benefit of our shareholders. I'm pleased to report record adjusted EBITDA of approximately 1.26 billion and record free cash flow for the fourth consecutive quarter of 620 million. Revenues increased by 31% over the third quarter of 2023 to approximately 2.2 billion. Importantly, our adjusted EBITDA increased by 64% and free cash flow increased nearly sevenfold compared to the prior year period. We are also reporting another record quarter of adjusted net income of $1.14 per share, which is another significant increase relative to the prior year period. Apart from the gold price, a key driver of our strong financial results is this continued focus on cost control and continued optimization. If you look at our cash costs, we came in at $921 per ounce in the quarter within our cash cost guidance range. Cash costs were slightly higher relative to prior quarters driven by lower production volumes, as was planned, and higher royalties, as Amar indicated in his comments. On a year-to-date basis, we remain below the midpoint of our cash cost guidance range at $897 per ounce. With respect to all in sustaining costs, in Q3, we came in at $12.86 per ounce, driven by higher sustaining capital spending, again, as expected. We were $11.69 in Q2, and in our Q2 call, we discussed that we needed to catch up on sustaining capital in the third quarter, and we did that. On a year-a-day basis, however, we remain within our guidance at $12.34 per ounce. Our all-in sustaining costs continue to be hundreds of dollars per ounce below those of our peers. During the quarter, our all-in sustaining cost margin was 48%, which is amongst the best in the industry. And on a year-over-year basis, the gold price has increased approximately 30%, while our all-in sustaining cost margin has increased 70%. That is exactly the leverage that our investors expect. With respect to operating costs, we definitely benefit from our regional approach. We are the employer of choice in many of the regions in which we operate, which helps to keep employee turnover low. Over 80% of our gold production is in Canada, where we benefit. We are currently benefiting from a relatively weak Canadian dollar, and we're very focused on continuous improvement to increase productivity and make our mines as efficient as possible. And Dom will touch on that shortly. These factors all contribute to very strong cost control. For the full 2024 year, we expect to be within our guidance range for costs, which is $875 to $925 per ounce, and $1,200 to $1,250 per ounce for all unsustaining costs. Overall, we've had excellent financial results for the quarter and first nine months of the year. If we move on to slide six, we significantly strengthened our balance sheet and reduced our net debt in the quarter. to $490 million from $1.5 billion at the start of the year. So we've improved our net debt position by over $1 billion in the first three quarters of 2024, all supported by record operating margins and free cash flow. In July, we repaid $100 million of senior notes on maturity. We also made accelerated payments totaling $275 million on our $600 million term loan facility bringing our total debt repayment in the quarter to $375 million. We also continue to prioritize returns to shareholders. For the first nine months of the year, we've returned approximately 45% of the free cash flow that we've generated through the dividend. We've returned that to shareholders through the dividend and share buybacks. We plan to continue this, to continue to strengthen our balance sheet, continue to reinvest in our business, and be opportunistic with respect to buying back shares. We move on to slide seven. This slide presents a good overview of our continued disciplined approach to capital allocation. As can be seen on the pie chart, we're ensuring that the record-free cash flow that we're generating ultimately accrues the benefit of our shareholders, again, directly through dividends and share buybacks and indirectly through the strengthening of our financial position. With that, I'll turn the call over to Natasha, who will provide an overview of our consolidated operational results.