Agnico Eagle Mines Limited ($AEM)

Good morning, everyone. Today, I have the pleasure to present and to introduce more what is Agnico. What are we doing, who we are, but more importantly, what differentiates ourselves. But maybe before I begin, please take -- in my remarks, it's going to be looking forward statement. So who is Agnico? So now we're the second largest gold producer in the world. We have 10 mines in operation in 4 countries. So Canada, Finland, Mexico and Australia, but 85% of the production is coming from Canada with the 3 region, Quebec, Nunavut and Ontario. We are today on a financial state point of view, last year, we'll generate $8.8 billion EBITDA. We had a $4.4 billion free cash flow at the end of last year. On that cash flow at $2.7 billion, we finished with net cash balance of $2.7 billion last year, and we give back to shareholders $1.4 billion through share buyback and through dividends. Why -- what differentiates Agnico Eagle to other companies? We don't consider ourselves as a global mining company. We are more a regional mining company. And that's why I think we're able to succeed today where we have our costs or $200 to $300 per ounces less than our peers. What -- why this is important, the regional aspect. It's the way that we found that we've built the company since many years that we've been able to have a clear and the best way to have a sustainable business. So we -- there is 2 criteria before we go into a region. Is there a geological potential that we could build many mines and to be there for many years? And do we have the political and social stability to be there for many years because that's the way we think we're able to create and to build a competitive advantage where we have a long-term relationship with the communities. We have a good, let's say, our employees are more committed, stay with Agnico. We have a very low turnover. Our turnover, for example, in Quebec is 5% to 6%. Overall, our turnover is half of the other business. when we look -- we have some sites that deter generation that people are at site. And I'm a good example of that. I've been with Agnico 26 years, starting when Agnico was one mine. And today, my daughter is a mining engineer at one of our mine in Nunavut. But I'm not an exception. That's the common into Agnico to have this. So that gives us good strength to build our project and to have a good technical base on the knowledge on operation, on construction and on delivering on target. What's the result of that is it's working. When you look to our results, it's working. So in the past 20 years, we've been able to increase the production 14x compared to where we were before. This looks good, but what is difficult to do is to do it per share. And our focus always remains to do it per share. We've been able to the last 2 decades to increase our production per share by 3x, which is not an easy achievement to do. And we have a growth plan, I'm going to talk later to keep doing that, growing the company without, let's say, in the per share value. When you look also on the EBITDA and when you look at the number there per share, the dividend per share, everything is in the positive. Overall, Agnico has been better than the S&P 400 and the XAU index. So we have a compounded return of the last 20 years of 13% Again, this -- the success is based a lot on the strategy to grow the company, but on a regional basis. So we try to do acquisition or to increase our productivity in the same region where we are. So that's the future, what we see now. So we're looking to be in the early 2030s, 20% to 30% more production that's where we are today. So right now, in the next coming years, we're 3.4, 3.5 million ounces for the next 3 years. We're going to be north of 4 million into 2030 plus. And this is based on the same 5 projects that we were looking and working on when the gold price was at $2,000. So the 2 first ones are to increase the production at the site where we have infrastructure, we have the people at Detour Lake. I'm going to talk more in the detail in the coming, but the 2 first sites is assets in operation. After that, we have Hope Bay and we have Upper Beaver. This is 2 new sites that we're building or we going to build. And the third -- the fifth one, San Nicolas, this one is not counted into my increase because it's more a copper project. So I'm going to talk more today about the next one. But we're in the strongest position that we've ever been with a good balance sheet with a good growth profile in front of us and a stable production in all our operations. Detour Lake, so that's a world-class asset. We've been able in the last 5 years to increase the resources, the reserve and resources by 25 million ounces in the last 5 years into that project.So without thinking differently or doing an expansion, we're going to be mining there up to 2026, 2027. That mine was discovered was in operation in 2015 or 2018, 2019, we just underground at the time. In 2010, that was reopened with an open pit and this is what we're mining right now at 750,000 ounces per year. But now we're looking to go back underground and to take higher grade from underground to replace lower grade from open pit to bring that to 1 million ounces. So again, this is done with existing infrastructure. The mill we already have underground mining. It's not a secret, and we're going to increase to -- in the -- to 1 million ounces per year. This is 1 part of the growth that we have in our view. The second one, Canadian Malartic. Since we've moved, we're moving from open pit at 60,000 tonnes per day. Now we're -- in 2029, we're going to be 100% going underground. So the grade is going to triple from 1 gram to 3 gram, but the mill capacity is going to move for the mill production is going to move from 60,000 tonnes to 20,000 tonnes per day. So we're going to keep the same production, 550,000 ounces per year, but we had a great opportunity, 40,000 tonne per day available at the mill. So we've talked about that the last 2 -- work on that last 2, 3 years. There's 3 parts of that to bring that 1 also to 1 million ounces. The first one, we're looking to have a second shaft because that deposit, it's a world-class deposit. And there's enough room that we're able to extract more for the East -- good deposit. So we're planning to do a second shaft that's going to add 200,000, 225,000 ounces per year. We're also looking to bring Marban pit. It is a pit that we just -- with the acquisition of O3, -- it is at 15 kilometers away from the mill. So we're going to mine it, truck it to the mill. And we have another project in Quebec called Wasamac. It's an underground mine, 3,000 tonne per day, 100 kilometers, we're going to track it to Malartic meal. So that's the second part of the puzzle to add more answers in the coming years. Again, on the site, in a region where we know with a low risk. If you combine Malartic and Detour together in the last 10 years, we have been able to add 50 million ounces on resources just by drilling and bringing new ideas. So that's really an interesting way to create value. The third one, Upper Beaver. That's a project in Ontario. It is close to -- you could see on the map, you disclosed to our Macassa site. So we're going to have a second mill into that camp. It is a 210,000 ounces per year that we're looking for. But that also might also unlock other deposits that we have in that camp in the future, having that mill. So we're doing currently the shaft sinking. That's the same team that did the Macassa Shaft #4 doing that shaft and the team doing the construction, it's also -- we do our own construction. So the site or the development is going as planned, and we're on target on this one. And the last 1 in the least, I'm going to talk a Bay, we bought that project from TMAC in 2021. At that time, it was 10,000 -- 100,000 ounces per year. It was not enough for Nunavut. So we've put it on care and maintenance, and we've drilled it very hard. And we found a new deposit with Patch 7, which is the best that we have. So now we're looking -- we're targeting to announce the construction of that project in May, May 19. That's going to be 400, 450 on the life of mine 1,000 ounces per year for the first 10 years, but that's just the beginning. Why we're announcing it now because it's like what we did at Meliadine. We need to have enough engineering to be -- to make sure that the costs and the schedule are solid. So we're going to be announcing it in May, and we are already over 50% of engineering. The team doing Meliadine from the study engineering and now we're starting to beef up the operation are the same team or part of the team that did Meliadine. So again, even though it's in the Arctic, it is not an easy environment. It is not our first barbecue Tanya, and we're going to do 1 also in May. But we're confident on that project. Now we have -- what we see is the first picture, but first 10 years, but we have 80-kilometer greenstone belt that we're going to keep drilling and keep -- most probably keep expanding that property. So that's the last one was looking to talk to you with their significant potential there. So the way Agnico, we're creating value. Our focus is really to create value per share, not just to improve production. That has been our mindset, and we could see the result of that, and we're going to keep doing it. So from optimization from project, we have the best pipeline that we never had with what we have in the middle, but we're also working and looking for what next what project we should bring into play in 2035. So on the exploration side, on M&A, this is a thing that always looking for to keep building that pipeline. So on that, I will pass it to you, Tanya, for a question.

Okay. Thank you very much, Dominic. I'm going to open it to the audience to see if there are any questions from the audience. Gentleman over there.

May I ask about your European ambitions. It seems that Europe is quite small now relative to your Canadian assets. And it's been the focus of companies to try to down their non-strategic assets. What does Agnico plan to do within Europe? What does it generate in terms of ounces? And what's its ambitions?

Well, we're getting that question, I think, at all meetings. Same thing As in Australia and Europe. Is it noncore asset. We don't see that as a noncore because both of the sites have a long life of mine. In fact, in Australia, that's the longest lag of mind that, that site I've never had. But we also see exploration potential at 2 sites, at Kittila and also at Fosterville. So for us, we keep drilling it. Plus when you think about that, today, the -- both sides are doing around 1 million free cash flow per day. So they are not on cost. They are more -- they are providing value to us. And both plays in Kittila and especially in Australia, it is really difficult to start a new mine and to build a new mine. So having those assets, it's an added value and it's -- we keep the regional thinking, okay, how could we bolt on that at the same place or around is that we could use the synergy we have with the team, the synergy we have the infrastructure. So there is no plan to let those goals for now.

The gentleman over here.

Do you have any plans in the Dominican Republic?

I think we are maybe involved in a project, I'm not sure. I wouldn't say maybe overall, we're getting a lot of questions are you interested on that 1 on that one. We are invested in approximately between 60 and 70 projects, which some of them are public, some of them are not. And really, that's the way we've been building the company. Our goal by doing that is to have access to the data, having access to the people being more comfortable with the region. -- to get the knowledge advantage. And often, the value of the project is well priced. So you need to see through that. You need to see it through the exploration potential to match the value and to create. We're patient. So often, it could be 2 years, 5 years, 7 years, working with the junior company to help them to develop the project. It's good for us, but it's also good for them because we could provide some technical knowledge and help how to develop the project. So I could get all questions about each project. Again, we have a dedicated team on evaluating projects and also project development. full-time people on that working -- looking to different project.

Maybe...

Maybe to answer, I will be back to the 2 criteria. Could we build many mines we have the geological potential to see many mines. That's 1 criteria. And the second one, is it stable socially? Is it stable politically. So even though we could build many mine in Afrin Africa, we won't go there.

Maybe just to round off Mexico. You've talked a bit about Europe and maybe just what's happening in Mexico, your strategy there?

Yes. So Mexico, we have 1 mine still in operation, Pinosatos. There's 2, 3 years in front of us. The team is looking with the current gold price -- could we expand it? Because again, we have the thing built and we have the team. We'll see if there's something. But the thinking is to use the workforce and the knowledge to help and to develop Scandic. So we're still into the permitting phase into the study phase at San Nicolas, but that's the plan that we have for more clear, let's say, in the future for Mexico.

And maybe if I can keep going on just about mine building in general. Like one of the concerns when I ask the CEOs of all mining companies, what is your biggest worry they say people. right? We worry about the oil today, but just people in general. So maybe you can talk a little bit in -- a bit more in depth about these new mines that you're building. all the people that we need to build these mines. Maybe you can just share with us a little bit more about how each are going to be built and how you move people around your operations.

Yes. At Agnico, we build our mind. So we never give or we don't give EPCM. So engineering, procurement, construction and management, the head of all of those blocks is an inequal person. -- that we beef up from other sites or at some -- we don't have choice with engineering firms and with consultant with contractor. But we have a core team of construction that we're able to move from 1 project to another 1 using the same process using the same way to report how the project is progressing. So that's the way we do that. I'm not concerned because, again, if I'm looking at Canadian Malartic, the team doing a first shaft is going to be the same thing is going to do the second chart. -- at Hope, the team that did Milann Amaruq now they are building HomePay, Detour, we already have the people. But that's an interesting question. I think it's a challenge for not just the mining industry. we see a bit less on a bit less. We see less quality into the engineering firms. Same thing with contractor we get -- in the past, we're able to get a contractor with 10 years of experience. Now it's not the case. It's more you get a contractor with no experience. So we need to do more training -- but because our regional thinking, we have access more than often to the A team because the contractor likes to work with us, and we know who they are. So we're not going in an area where we don't know the contractors. We know who they are. So we're able to ask, okay, fine for that project and that guy and that guy because I know those guys are going to drive the construction, for example. At the right pace.

Yes. And with a lot of projects being built in Canada, you always have to fight for labor. So.

Yes. in fact, we're just finishing hoping -- and I was in discussion with the construction of VP 2 days ago, and he was explaining to me the factor they're using on productivity. And the 1 we're using now at Tobey, it's different than Meliadine based on the current situation, based on the -- we have less expertise, less experience. So for example, I'm just giving numbers -- at Meliadine, on paper, you need 1.1 hour to install a pipe on paper. So at Meliadine was, for example, 1.1 hour that you need to put on costs. At whole day might be 1.5 hours. You put into your estimate because we know we have less capacity. But the price we're going to give to you, which is going to be around $2 billion to build Rob. This is included into our estimate. Same thing with the OpEx at Abe, we're taking the same price we use -- we're doing right now at the milled and underground in the north. So it's an advantage. We have the historical data to cost the projects.

Well, I think we're out of time, but Dominic, I will be coming to that barbecue, I hope on May 20. So Okay. Thank you, Dominic.

Thank you.