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Gold/Mining/Energy : Agnico-Eagle Mines Ltd. - AGE (U.S. AEM) -- Ignore unavailable to you. Want to Upgrade?

To: Robert J Mullenbach who wrote (272)	6/25/1999 9:32:00 AM
From: lwk	Read Replies (1) \| Respond to of 1612

Agnico-Eagle Announces Further Expansion at LaRonde to 5000 Tons Per Day Stock Symbols: AGE (TSE, ME) AEM (NYSE) TORONTO, June 25 /CNW-PRN/ - Agnico-Eagle Mines Limited (''Agnico-Eagle'') announced today its decision to expand production at its LaRonde Mine a further 39% from a planned 3600 tons per day to 5000 tons per day. As a result, gold production will almost triple to 337,000 ounces in 2004 at a cash operating cost of US$104 per ounce making the LaRonde Mine one of the lowest cost gold mines in the world. ''This expansion program will strengthen Agnico-Eagle's ability to generate increased earnings and cash flow in a low gold price environment,'' said Sean Boyd, President and Chief Executive Officer. ''More importantly our expansion plan has been revised from earlier preliminary plans and has a greater rate of return and shorter payback due to a reduction in required upfront capital and increased production in the initial years of the expansion program. This will allow us to internally finance more of the expansion program than initially forecasted,'' added Mr. Boyd. The required capital investment to move to 5000 tons per day is US$34 million spread over the next 3.5 years. This is a more efficient deployment of capital than earlier preliminary estimates. This capital investment program provides for a delayed schedule of underground development at depth due to the availability of high grade, easily accessible gold ore from the recently acquired El Coco property on the eastern boundary of the LaRonde property. The addition of this ore to the LaRonde Mine plan will result in better than initially estimated gold production levels, increasing from 128,000 ounces in 1999 to 337,000 ounces in 2004. In addition, cash operating costs to produce an ounce of gold (including royalties on El Coco production) will decline significantly from US$217 in 1999 to US$104 in 2004. ------------------------------------------------------------------------- 1999 2000 2001 2002 2003 2004 ------------------------------------------------------------------------- Gold production 128,000 188,000 221,000 301,000 310,000 337,000 (ozs.) ------------------------------------------------------------------------- Cash costs (US$/oz.) (including royalties 217 156 131 114 113 104 on El Coco production) ------------------------------------------------------------------------- From an investment point of view, the expansion from 3600 tons per day to 5000 tons per day generates attractive returns. Using a long term gold price of US$300 per ounce the rate of return on the US$34 million investment to expand from 3600 tons per day to 5000 tons per day is 36% with a payback of slightly more than two years. The overall rate of return on the entire expansion investment which began in 1994 of US$218 million is 16% with a payback of less than five years. Approximately US$120 million of the US$218 million total investment remains to be spent over the next 3.5 years broken down as follows: remaining 1999 (last 9 months) -- US$55 million; 2000 -- US$44 million; 2001 -- US$17 million and 2002 -- US$4 million. Beyond 2002, maintenance capital and deferred development is expected to average US$7 million per year and includes amounts to develop the deep ore zones at the bottom of Shaft No. 3. The sensitivity of the rate of return, at various gold and zinc prices, on the incremental US$34 million investment is shown in the table below: Zinc Price (US$/lb.)/ Gold Price (US$/oz.) 250 275 300 325 0.45 24% 27% 29% 32% 0.50 32% 34% 36% 37% 0.55 35% 37% 38% 39% 0.60 37% 39% 40% 41% The Company's balance sheet remains strong with a cash and bullion position of US$82 million at the end of the first quarter. This cash balance along with projected cash flow from operations in 2000, 2001 and 2002 are expected to be sufficient to fund the US$34 million investment required to move to a 5000 ton per day production rate. A long-term bank facility is being negotiated that will provide necessary working capital, during this capital expenditure program. This facility will also enhance the Company's liquidity and financial flexibility. The additional US$34 million investment required to move to the higher production rate also makes good strategic and technical sense as it maximizes the value of the LaRonde Mine through economies of scale which drives down unit production costs and accelerates cash flows. The benefits of the ongoing expansion program will begin very soon as the first mining commences in the new mineralized zones next month. The Company has updated its gold reserve and resource figures to account for drilling during the first six months of 1999 and the recent El Coco acquisition. The overall reserve and resource tonnage now exceeds 42 million tons up from 39.7 million tons at December 31, 1998. This reserve and resource is estimated to contain 5.0 million ounces of gold. At a production rate of 5000 tons per day, the mine life is estimated at over 20 years. Of this total reserve and resource, 1.5 million ounces is classified as proven and probable ore reserves up from 1.3 million ounces at the beginning of the year. This press release contains certain ''forward-looking statements'' (within the meaning of the United States Private Securities Litigation Reform Act of 1995) that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements. Other risks and uncertainties are disclosed under the heading ''Risk Factors'' in the Company's Annual Information Form (AIF) filed with certain Canadian securities regulators (including the Ontario and Quebec Securities Commissions) and with the United States Securities and Exchange Commission (as Form 20-F). Agnico-Eagle Mines Limited is an established Canadian gold producer with operations located principally in northwestern Quebec and exploration and development activities in Quebec, Ontario and Nevada. Consistently one of the industry's lowest-cost producers, Agnico's operating history includes 24 years of continuous gold production primarily from underground mining operations. Current proven and probable gold reserves stand at 1.5 million contained ounces, with an additional 3.5 million ounces in the mineral resource category at its LaRonde Mine. Agnico-Eagle is currently focused on the expansion and large scale exploration program of its LaRonde Mine which is expected to result in increased gold production and expanded gold reserves. SOURCE: Agnico-Eagle Mines Limited

To: Robert J Mullenbach who wrote (272)	6/25/1999 12:28:00 PM
From: Robert J Mullenbach	Respond to of 1612

Nice release, CASH cost of 104 bucks, ROI is figured at 300 per OZ. what if gold went it to a bull market, that would make some nice reading.!!!!! Can't wait till web page is updated on visual graphics on new addition. corporate-ir.net XXXXXXXXXXXXXX From an investment point of view, the expansion from 3600 tons per day to 5000 tons per day generates attractive returns. Using a long term gold price of US$300 per ounce the rate of return on the US$34 million investment to expand from 3600 tons per day to 5000 tons per day is 36% with a payback of slightly more than two years. The overall rate of return on the entire expansion investment which began in 1994 of US$218 million is 16% with a payback of less than five years. Approximately US$120 million of the US$218 million total investment remains to be spent over the next 3.5 years broken down as follows: remaining 1999 (last 9 months) -- US$55 million; 2000 -- US$44 million; 2001 -- US$17 million and 2002 -- US$4 million. Beyond 2002, maintenance capital and deferred development is expected to average US$7 million per year and includes amounts to develop the deep ore zones at the bottom of Shaft No. 3.