Agnico Eagle Mines Limited Q4 FY2025 earnings call

• Strong 2025 performance with gold prices up, production and costs met, debt repaid, cash built up, dividends and buybacks returned to owners. - Focus on increasing production by 20%-30% over next decade with projects like Detour Lake (potential 300-350k oz/year via underground), Canadian Malartic complex (opportunity to add 400-500k oz/year via fill-the-mill), Upper Beaver (expected over 200k oz/year), Hope Bay (study supports 400-425k oz/year operation), and others. - Operational highlights include progress at various mines like Malartic with fill-the-mill strategy, Detour with underground project advancement, Upper Beaver ahead of schedule, and exploration successes leading to increased reserves and resources.

In 2025, Agnico Eagle delivered 3.45 million ounces of gold production. Total cash costs were $979 per ounce and all-in sustaining costs were $1,339 per ounce. Reserves were at a record 55.4 million ounces (up 2%), resources at 47.1 million ounces (up almost 10%), and inferred ounces at 41.8 million ounces (up 15.5%). For 2026, cash costs are forecast to be over $100 per ounce higher than 2025, but more than half of the increase is from higher royalties and a stronger Canadian dollar. Excluding those, cost increase is about 4% to 5%.

• Expect stable production levels over next 3 years, with 2026 midpoint guidance for cash costs $1,070 per ounce and all-in sustaining costs $1,475 per ounce. - 60% of 2026 cash cost increase due to higher royalties and stronger Canadian dollar, 40% due to inflation and lower grade mining sequences. - Adjusted calculation of total cash costs and all-in sustaining costs for Nunavut operations to exclude certain payments. - Capital expenditure guidance reflects focus on reinvestment for next phase of growth, with acceleration at some projects.

Q: If I could just tackle the subject of M&A right off the block, and I understand that it's probably a little bit sensitive right now, but any color you could provide would be helpful. But has Agnico decided if they would tender their shares to the offer currently out on Foran.

A: Well, thanks, Lawson. Look, like any M&A activity, the decisions are up to the various shareholders, and there's a lot more shareholders than us. So that's not really something I would be comfortable discussing.

Q: Maybe just to clarify, there were a few cost productivity initiatives mentioned in this presentation. I remember there were a lot more also mentioned in the last quarter presentation. Is this already incorporated in the 2026 ASIC guidance? Or is this further improvement from the guidance that's provided?

A: Dominique speaking. I would say it's partially included, but not all. We all -- it's Natasha and myself role to put the bar at the right place for budget and guidance, but we keep some flexibility in that.

Q: If everything goes according to plan with the project portfolio, I'm wondering if we should expect CapEx to increase in future years? Or should we think about the current run rate as more of a plateau going forward?

A: Yes, Josh, it's Jamie here. It's a good question. And I think, I mean, with the 20% to 30% production growth starting in 2030 and ramping up through the decade, you're seeing the benefits of that capital spending. Assuming we go ahead with Hope Bay and approve construction of that project in May of this year, that would add about $300 million to maybe $350 million of capital. So if you factor what we've guided, the $2.1 billion that we guided of the $300 million for Hope Bay, we're about $2.4 billion, $2.5 billion of capital this year, plus another $400 million of capitalized exploration. I think that's an appropriate range over the course of the next few years. We will see capital kind of stay at that elevated level. And then once we start to see that stair step increase in production in 2030, you'd expect the capital to start to come off.

Q: Can you give us an approximate cost estimate of the ounces coming from the life extension at Meadowbank like out to 2030?

A: Well, I probably should have said to Dom because he's got more updated numbers. I think the last number I saw was sort of in the $2,200 to $2,300.

Q: Just to perhaps follow on from the capital allocation question in terms of returning excess cash to Josh's question, yes, I mean, would you consider the combination of buybacks and special dividends in a continued high price scenario? Or would you just extend the $2 billion buyback facility?

A: Yes. I think we could really do either. I think there's no reason for us to rule out ever paying a special dividend. That would certainly be a consideration in, as you say, a continually rising gold price environment. If we achieve that cap of $2 billion, and we're still generating excess cash beyond what we need or anticipate needing to run the business, then that would certainly be a consideration.

Q: I was just going to continue with Hope Bay, if I could, from Anita's question. Dominique, can you remind me, you said if we get the go ahead in May. And by the way, if we do have a mine tour, Dominique, it better be in May or [indiscernible] barbecue for us to attend. Would -- can you just remind me of what exactly you have permitted up there to do for that $300 million that would be spent in 2026? And what exactly would that $300 million go for?

A: Yes. We have all the permit to spend that $300 million. It's not an issue. There's some element to do before, let's say, getting into production, but there is no red flag on that. What we're going to spend, it's mainly procurement. It's mainly putting steel, concrete and everything we need. Again, we work with barge season. It's always what we need to spend from mid or let's say, the first barge in September '26, getting to the September '27, we need to put everything on the boat. So it is approximately 8 boats that we need to fill up and to deliver to site and to start some more work. This is one part of the spending. The other part is to do ramp development. So keep preparing the field to be ready for full production in 2030. So that's going to be the other part where we're going to spend money.

Q: We increased the underground resources at Malartic this year, 7.5 million ounces. Should we expect 7.5 million more in the coming year? Or are we getting done with it first. Then second, in terms of converting the inferred resources eventually to reserves, is it more efficient to wait until after 2030 when the first and second shafts might be done, significant development has been completed and the zones can be either visually inspected or channel sampled or close space drilled from underground without the substantial cost of 0.5 mile or 1 mile holes from surface.

A: John, this is Guy. So your first question, this year, we made a big push at converting the outskirt when you look at the pale green mineral inventory in the outskirt of East Gouldie to bring it to the inferred. So this is where you saw the big addition. There's still some mineral inventory in the outskirt, but much less than we were used to have. And it was by design because we wanted to tight fill that mineralized envelope to bring it to infer. And to your second question, we are already kind of doing some with the current infrastructure, with the ramp in the upper part of East Gouldie. We're going to be doing more and more of that conversion to reserve because you're right, achieving kind of the drill spacing to classify it to indicated or reserve is much more cost efficient from underground. So we're going to be doing having access from the current linkage ramp that goes all the way to the East Gouldie and from the upper part of East Gouldie, trying to do as much of the reserve conversion from underground. But there will be also a continuation of drilling from surface. But we've seen over the total number of drill rig that Dominique was mentioning, there is a progressive shift towards much more drilling from underground compared to the drilling from surface. So we were really aiming to bringing it to infer from surface, and we're going to be doing a lot more of the conversion towards reserve from underground. For the reason you mentioned, the fact that in order to achieve the drill spacing at 30- to 40-meter drill spacing, it's much easier to achieve that and less -- and more cost effective to do that from underground.

Q: Congrats on a record year. Could you unpack the slowing of the mill ramp and change of sequencing at Detour Lake a bit further and implications on cost and CapEx for the next few years ahead of that growth trajectory into the next decade?

A: Sure. You're talking about the time line, Bennett, for the mill ramp-up at Detour? Yes. And any implications, I guess, also including incremental stripping and things like that. Okay. Sounds good. So I'll start with the mill. So in terms of the mill, we did reach 28 million tonnes this year. It's a remarkable achievement for the team. The mill has been in expansion mode for the last 6 years, Bennett. And so the team was looking to just take a bit of time to stabilize the throughput and ensure that we have the sustainable operating practices in place. And this just gives the team a little bit of flexibility. So with respect to the time line, we're looking at still getting the mill up and running to 29 million tonnes by 2030. And at the same time, when we reran our life of mine plan, we're looking at reaching the 1 million ounces in the early 2030s. So not much of a change on that end yet. Yes. Part of the thing with -- and this is getting maybe a little bit pedantic, but it's not just the throughput, it's make sure you don't have any recovery issues, you don't have any reliability issues. So Natasha's point, it's -- they've done a great job. And I think we have some of the best people in the world on that, and we always take their advice on how to do things the best way.

Q: And then coming to Meadowbank, the mine life, it's nice to see extended to 2030, even if it's incrementally higher cost ounces. But wondering if you could give a better understanding of the opportunity beyond 2030 as it relates to an underground-only mine. I mean could this be of similar size and scale as we've seen over recent years?

A: Yes. The team are looking, targeting, and again, this is very conceptual 250. Is it something possible by -- we know it is going deeper underground. So we could just keep mining. They're also looking for smallest pushback here and there. They're looking below what we've mined at Goose at the time, below what we've mined at Vault at the time, putting that together to see could we extend the Meadowbank. Of course, the USD 5,000 per ounce gold price is very welcome for Nunavut, for Meadowbank. It is also very welcome because we keep drill -- the drill keep running. And who knows? We just need one hole, and that could change the picture. So it's very positive. Yes, it is higher cost. But as Ammar mentioned, it is on top of with existing infrastructure with minimal CapEx to deliver that. So we are still working on it. Maybe 20, I will say not before 2027, we give you -- we could give you more on that. Let's see how the team is going to be able to work at it.