Agnico posts record earnings

Agnico-Eagle Mines (AGE-T) has had a stellar fourth quarter at its LaRonde gold mine, ending the year with record production of gold and base metals from its mine 40 km east of Rouyn-Noranda, Que.

Fourth quarter earnings totalled US$15.6 million, compared with US$2.4 million in the same quarter of 2003. For the year ended Dec. 31, net earnings were US$47.9 million, a turn-around from 2003 when the company posted a loss for the year of US$19.5 million.

All metals saw increased production during the year; gold production was up 15% to 271,567 oz., silver production was up 44% at 5.7 million oz., zinc production was up 67% to 167.28 million pounds and copper production was up 13% to 22.8 million pounds.

During the fourth quarter and over the year, the mill processed over 8,000 tons of ore per day, bringing mine operating costs down 11%, to an average $48 per ton in the fourth quarter.

Total cash operating costs for the full year stood at $56 per oz. of gold produced (including byproduct credits) down 79% from 2003. In 2005 the company expects to have a total cash operating cost of about US$140 per oz. gold. This assumes a gold price of US$375 per oz., US$6 per oz. silver, 45 per pound zinc and US$1.15 per pound copper, as well as an exchange rate of $1.27 Canadian to US$1.

The realized prices for all metals were up considerably over the previous year: US$418 per oz. for gold, $6.84 per oz. silver, US47 per pound zinc and US$1.34 per pound copper. In 2003 the realized price averaged US$368 per oz. gold, US$5.07 per oz. silver, US38 per pound of zinc and US82 per pound of copper.

Agnico succeeded in replacing the gold it produced with reserves. At Dec. 31, 2004 the LaRonde mine had a proven mineral reserve of 6.5 million tons grading 0.09 oz. gold per ton, 2.65 oz. silver per ton, 0.43% copper and 4.46% zinc. In addition, including its Lapa, Goldex and Bousquet deposits, as well as LaRonde, the company had a probable mineral reserve of 60.9 million tons grading 0.12 oz. gold per ton. The total indicated mineral resource for these projects stood at 8 million tons grading 0.11 oz. gold per ton.LaRonde at depth, Goldex and Lapa

Exploration drilling is testing the LaRonde deposit below the bottom of the Penna shaft. One hole which extended the polymetallic zone to the east, cut 24 ft. grading 0.27 oz. gold per ton, 0.4 oz. silver, 0.54% copper and 0.06% zinc. This included a 12-ft. intercept that graded 0.45 oz. gold per ton, 0.52 oz. silver, 0.61% copper and 0.06% zinc.

Another hole (3215-103A) cut 22 ft. grading 0.4 oz. gold per ton, and 0.29 oz. silver per ton. Several other holes cut from 9.5-46 ft. grading 0.12-0.24 oz. gold per ton, as well as 1.2-3.4 oz. silver per ton, up to 0.4% copper and up to 6.4% zinc. A feasibility study should be completed by next month.

Results from an 18,213-ton bulk sample taken at the Goldex property indicate a grade of 0.081 oz. gold per ton. The sample was taken along a strike length of 1,000 ft. and over a vertical distance of 650 ft., so it is representative of a large area of the deposit. Two thousand feet of raises were developed to take the sample. A previous feasibility study is being revised to incorporate the latest data; a final study will be tabled in the next few months.

Surface infrastructure is practically complete at the Lapa deposit, 10 km east of the LaRonde mine and shaft sinking (to a depth of 2,700 ft.) is beginning. The 16-foot diameter concrete-lined shaft will take over a year to develop. Agnico plans to take a 15,000-ton metallurgical bulk sample to help firm up the reserve.