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Agnico Eagle Reports First Quarter 2022 Results – Strong Operational Performance; Integration Ahead of Schedule and Corporate Merger Synergies Better than Expected; Good Progress at Key Exploration and Development Projects

Press Release

(All amounts expressed in U.S. dollars unless otherwise noted)

TORONTO, April 28, 2022 – Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) (“Agnico Eagle” or the “Company”) today reported financial and operating results for the first quarter of 2022.

First quarter of 2022 highlights:

  • Solid quarterly production and costs despite COVID-19 challenges – Payable gold production1 in the first quarter of 2022 was 660,604 ounces at production costs per ounce of $1,002, total cash costs per ounce2 of $811 and all-in sustaining costs (“AISC”) per ounce3 of $1,079. These results include a full quarter of production from the Agnico Eagle mines and 52 days of production from the legacy Kirkland Lake Gold Ltd. (“Kirkland Lake Gold”) mines (Detour Lake, Macassa and Fosterville) reflecting the period after the closing of the merger between Agnico Eagle and Kirkland Lake Gold on February 8, 2022 (the “Merger”). Including a full quarter of production from the legacy Kirkland Lake Gold mines, total payable gold production in the first quarter of 2022 was 806,329 ounces with total cash costs per ounce approximately in line with the mid-point of 2022 total cash cost guidance announced in February 2022
  • Several key cornerstone assets delivered strong operational performance in the first quarter of 2022 – The LaRonde Complex and the Detour Lake and Fosterville mines all encountered higher grades which resulted in better than expected gold production and costs. At LaRonde, production was 105,037 ounces of gold at total cash costs per ounce of $560. In the post-Merger period, Detour Lake produced 100,443 ounces of gold at total cash costs per ounce of $600, while Fosterville produced 81,827 ounces of gold at total cash costs per ounce of $309. The strong operational performance in the first quarter of 2022 puts these mines in a good position to deliver on 2022 guidance forecasts
  • COVID-19 challenges seen in late 2021 and early 2022 appear to be moderating – Most of the Company’s operations were affected by COVID-19 over the past few months, but production levels and costs in the first quarter of 2022 were generally in line with forecasts. All sites are still maintaining active protocols but risks now appear to be more manageable and the situation improved through the quarter. As a result, the Company began the reintegration of its Nunavummiut workforce (which had been sent home in December 2021) in mid-March, after consultation with the Nunavut Government and other local stakeholders. The reintegration was completed in early April 2022
  • Gold production, cost and capital expenditure guidance reiterated for 2022 – Expected payable gold production in 2022 remains unchanged at approximately 3.2 to 3.4 million ounces with total cash costs per ounce expected to be between $725 and $775 and AISC per ounce expected to be between $1,000 and $1,050. Total capital expenditures (excluding capitalized exploration) for 2022 are still estimated to be approximately $1.4 billion. Guidance for 2022 includes production, costs and capital for the period commencing January 1, 2022 for the Detour Lake, Macassa and Fosterville mines
  • Inflationary cost environment continues to evolve – Cost pressures were relatively minor in the first quarter of 2022, largely due to cost savings initiatives, long-term agreements with local suppliers, existing fuel hedges and the predominantly locally sourced labour force. The inflationary cost environment continues to be dynamic given the changing political landscape and the effects of COVID-19. As such, the Company will continue to monitor and assess any impacts on forecast costs in the coming months as inflation could have more of an effect during the remainder of the year
  • Merger completed February 8, 2022; Focus Now on Delivering Synergies and Maximizing Value Drivers – The Merger with Kirkland Lake Gold was completed on February 8, 2022 and the integration process is gaining momentum. The senior management team has been finalized and is focused on optimizing and leveraging best practices to deliver on corporate and operational synergies and to maximize value drivers:
    • Expected Corporate G&A synergies (before tax) are now expected to be up to $200 million in the first five years (up from previous guidance of $145 million) and up to $400 million over the next ten years (up from previous guidance of $320 million)
    • The estimate for potential operational synergies remains unchanged at approximately $130 million per year ($440 million over five years, $1.1 billion over 10 years). The estimate of strategic opportunities to reduce current and future expenditures as part of the project pipeline also remains unchanged at up to $240 million over five years and $590 million over 10 years. While realization of these benefits will be a multi-year endeavour, encouraging progress was made in the first quarter of 2022
    • Updates on key value drivers are set out below and additional summaries are provided in the operational section of this news release
  • Update on key value drivers
    • Odyssey project – Underground development and surface construction activities remain on schedule and on budget. Inflationary cost pressures remain manageable at this time. From a labour perspective, the Company is successfully building a highly skilled team and the Odyssey project is considered an employer of choice in the Abitibi. Fifteen drills are active on the property, with three underground drills completing infill drilling on the Odyssey South deposit and 12 surface drills focused on infilling and expanding the East Gouldie mineralization. Shaft sinking is expected to begin in the fourth quarter of 2022 and the first underground production is expected to commence in the first half of 2023
    • Detour Lake – Mill optimization projects are progressing as planned and drilling continues to intersect mineralization west of the resource pit shells, including 30.9 grams per tonne (“g/t”) gold over 16.0 metres at 451 metres depth. Additional mineralization has also been encountered at depth (3.5 g/t over 45.1 metres at 822 metres depth), further supporting the potential for future underground mining. A technical evaluation is underway with the goal of converting a portion of last year’s measured and indicated mineral resources into mineral reserves in the second quarter of 2022
    • Kirkland Lake regional update – At the Amalgamated Kirkland (“AK”) deposit, the underground ramp from Macassa has been extended by 225 metres and nine drill holes have been completed in the higher-grade portion of the deposit (assays pending). AK ore could complement the feed at the Macassa mill as early as 2024. At Upper Beaver, infill drilling continues to intersect significant mineralization, including 7.4 g/t gold and 0.4% copper over 14.2 metres at 1,582 metres depth. In addition, drilling appears to have encountered a new zone of mineralization 500 metres southeast of the main mineralized zone (assays pending)
    • Hope Bay – Drilling at the Doris deposit has discovered extensions to the known mineralized zones. Deep exploration drilling in the BTD Connector area returned highlights of 23.0 g/t gold over 5.0 metres at 502 metres depth and 9.4 g/t gold over 14.9 metres at 491 metres depth. Additional drills are expected to begin operating in the coming weeks. Exploration is expected to continue through 2023 while a larger production scenario is being evaluated
  • Strong investment grade balance sheet; normal course issuer bid (“NCIB”) expected to commence in early May 2022 – On February 9, 2022, Fitch Ratings placed Agnico Eagle’s BBB credit rating on a Positive Outlook. At March 31, 2022, the Company’s net debt4 totaled $503.7 million. Subsequent to the quarter end, the Company repaid with cash the $125 million 6.77% Series C senior notes at maturity on April 7, 2022. Under the proposed NCIB, the Company intends to purchase up to $500 million of its common shares (up to a maximum of 5% of its issued and outstanding common shares)

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