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Agnico-Eagle Mines LimitedAgnico-Eagle Mines LimitedKittilä Update – November, 2008Kittilä Update – November, 2008
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Forward Looking Statements
The information in this document has been prepared as at October 29, 2008. Certain statements contained in this document constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward looking information under the provisions of Canadian provincial securities laws. When used in this document, the words “anticipate”, “expect”, “estimate”, “forecast”, “will”, “planned”, and similar expressions are intended to identify forward-looking statements or information.
Such statements and information include without limitation: statements regarding timing and amounts of capital expenditures and other assumptions; estimates of future reserves, resources, mineral production and sales; estimates of mine life; estimates of future mining costs, cash costs, minesite costs and other expenses; estimates of future capital expenditures and other cash needs, and expectations as to the funding thereof; statements and information as to the projected development of certain ore deposits, including estimates of exploration, development and production and other capital costs, and estimates of the timing of such exploration, development and production or decisions with respect to such exploration, development and production; estimates of reserves and resources, and statements and information regarding anticipated future exploration; the anticipated timing of events with respect to the Company's minesites and statements and information regarding the sufficiency of the Company's cash resources. Such statements and information reflect the Company's views as at the date of this document and are subject to certain risks, uncertainties and assumptions, and undue reliance should not be placed on such statements and information. Many factors, known and unknown could cause the actual results to be materially different from those expressed or implied by such forward looking statements and information. Such risks include, but are not limited to: the volatility of prices of gold and other metals; uncertainty of mineral reserves, mineral resources, mineral grades and mineral recovery estimates; uncertainty of future production, capital expenditures, and other costs; currency fluctuations; financing of additional capital requirements; cost of exploration and development programs; mining risks; risks associated with foreign operations; governmental and environmental regulation; the volatility of the Company's stock price; and risks associated with the Company's byproduct metal derivative strategies. For a more detailed discussion of such risks and other factors that may affect the Company’s ability to achieve the expectations set forth in the forward-looking statements contained in this document, see Company's Annual Information Form and Annual Report on Form 20-F for the
year ended December 31, 2007, as well as the Company's other filings with the Canadian Securities Administrators and the U.S. Securities and Exchange Commission. The Company does not intend, and does not assume any obligation, to update these forward-looking statements and information.
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3
Note to Investors Regarding the Use of Non-GAAP Financial MeasuresThis document presents estimates of future "total cash cost per ounce" and "minesite cost per tonne" that are not recognized measures under United States generally accepted accounting principles ("US GAAP"). This data may not be comparable to data presented by other gold producers. These future estimates are based upon the total cash costs per ounce and minesite costs per tonne that the Company expects to incur to mine gold at the applicable projects and do not include production costs attributable to accretion expense and other asset retirement costs, which will vary over time as each project is developed and mined. It is therefore not practicable to reconcile these forward-looking non-GAAP financial measures to the most comparable GAAP measure. A reconciliation of the Company's total cash cost per ounce and minesite cost per tonne to the most comparable financial measures calculated and presented in accordance with US GAAP for the Company's historical results of operations is set forth in the notes to the financial statements included in the Company's Annual Information Form and Annual Report on Form 20-F, for the year ended December 31, 2007, as well as the Company's other filings with the Canadian Securities Administrators and the SEC.
Notes To Investors
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Global GrowthThree mines now operating. Three new gold mines under construction
AEM’s growth projects 100% owned, with low total acquisition costs
Located in mining friendly regions of low political risk
Each project region has long-term mining camp potential
2008 through 2010 capex estimated at $1.4 billion. Approximately $680 million spent at Sept. 30, 2008. 70% of remainder committed.
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Industry Leading1 Gold Production Growth Estimates
1 For an intermediate or senior gold producer* Total cash costs for 2008 are calculated at current spot metals and currency exchange rates. All subsequent years were calculated using the following trailing 3-year average metals prices and exchange
rates: $10.55/oz Ag; $2,596/t Zn; $5,628/t Cu; C$/US$ of 1.15; US$/Euro of 1.29
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2008E 2009E 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E0
150
300
Payable Gold Production(ounces)
Total Cash Costs (weighted average)
Total Cash Costs($/oz)*
LaRonde Goldex Lapa Kittila MeadowbankPinos Altos
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Rovaniemi
Kittilä
Murmansk
KiirunaMine
Sweden Russia
Norway
55 km north of Kittilä800 km north of HelsinkiExcellent Infrastructure: roads, airports, communication
Arctic Circle
Kittilä Mine Location
25 km
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7
Kittilä Mine History
Gold mineralization discovered in 1986 by the Geological Survey of Finland;In April 1998, Riddarhyttan Resources AB purchased the deposit through public tender;Between 1999 to 2005, more than 136,000 metres Exploration Drilling Program to investigate main Suurikuusikko auriferous structure; In 2002, Riddarhyttan granted an environmental permit for mining (open pit and underground) at Suurikuusikko;In 2003, Riddarhyttan granted mining licence and permit for the Suurikuusikko deposit;In 2004, Agnico-Eagle Mines Limited purchased initial interest in Riddarhyttan;From 2004 to 2005, resources increased from 2.0 Moz Gold to 3.7 Moz Gold;In 2005, Agnico-Eagle acquired the remainder of the shares of Riddarhyttan;June 2006, Agnico Eagle announces production decision.September 2008, gold resources and reserves increased to 5.7 Moz
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8
Kittilä Mine Introduction
Project Overview
Hosts reserves of 18.2 million tonnes at 5.12 g/t gold (3 Moz/93 tonnes) – open along strike and at depth
Resources of 21.2 million tonnes containing an additional 2.7 Moz (83 tonnes) gold
Excellent exploration – camp potential
Average production planned at 150,000 oz/yr (4.8 tonnes) with approximate total cash costs of $300/oz, assuming US$/Euro of 1.3
Mining by using Surface and Underground mining methods.
Pro mining region – excellent infrastructure
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Kittilä Mine Current Status
Mining and Processing Underway
High voltage (110 KV) power line/electrical substation constructed and public road upgraded from Kiistala village to mine
Site services, buildings and infrastructure established and operational
Ramp and underground development ongoing since 2006
Fully permitted
Open pit mining started in May 2008 – self mining – October 1, 2008
Gold concentrate production started in September 2008
Autoclave commissioning ongoing
Examining options to optimize production rate of growing deposit
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Kittilä Mine Areal View August 2008
Tailings Facility
Processing, Admin and Services
Suurikuusikko Pit
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Kittilä Mine
Infrastructure Aerial View April 2008
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OPEN PIT LOCATIONS
ROURAVAARA PITROURAVAARA PIT
NORTH SUURIKUUSIKKO PITNORTH SUURIKUUSIKKO PIT
SUURIKUUSIKKO PITSUURIKUUSIKKO PIT
ETELETELÄÄ PITPIT
KETOLKETOLÄÄ PITPIT
Kittilä Mine Surface Plan
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Kittilä Mine Plant Site
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Kittilä Mine Mining
N
Open pit mining, followed by underground mining phased in over 3-4 years
Decline to provide platform from which to convert Resource to Reserves
Test deposit at depth
1 km
Suurikuusikko
View Northeast
Etelä
Ketola
Roura
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Aug. 2008
Mining Equipment2 x Sandvik Ranger 7001 x AC Roc D93 x Cat385 excavators7 x Cat777 trucks2 x Cat D6/8 bulldozers
Kittilä Mine Open Pit Mining
Suurikuusikko and Rouravaara pits, total excavation 35 Mt
Started in September 2007
Ore Mining started May 2008
Ore stockpiles totaled 235,000 tonnes at 4.6 g/t gold (Nov.14, 08)
Self Mining – Oct.1, 2008
Geological parametersDilution 15 % at 0.7 g/tOre Recovery 95%
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Kittilä Mine Open Pit Mining
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OPEN PITS AND UNDERGROUND MINE
Kittilä Mine Mining
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Kittilä Mine Underground Development
TUNNELING4,900 m completed to date4,000 m/year from 2009Decline 90 m/month
5.3 m
5.5
m Gradient 1:7
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FAR2EAR1
450 Exploration drive
Main Access Ramp
Final Pit
N
Rouravaara Zone Suurikuusikko Zone
Construction Rock Pit
Kittilä Mine Simplified Longitudinal View
Mechanized transverse open stoping with delayed backfill
Stope heights40 m in Rouravaara (to be tested by trial mining)25 m in Suurikuusikko, possibility to increase
Truck haul to surface
SupportEastern side + Ore horizon
Bolting : 3 m long cement grouted rebars, 4 bolts / mShotcrete on back and walls: 5 cm thick 30 kg/m3
Western sideShotcreting on back: 5 cm thick
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Kittilä Mine Underground Mining
25 -40 m
15 m
5 -20 m
Primary Stopes:
Cemented Rockfill (or Paste Fill)
Secondary Stopes:
Rockfill
The first secondary stope (9) can be mined after all surrounding primary stopes (1, 2, 5 and 6) are mined out and backfilled
TYPICAL LEVEL PLAN
MINING SEQUENCE-Transversal Stopes
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Kittilä Mine Production Profile (Dec. 2007)
32313231Mine Site Costs€/t
150,056171,687160,595134,673Payable
Ounces
87 %87 %84 %84 %Mill
Recovery
5.095.885.714.81Grades g/t
1056104510491044Ore tonnes
000’s
2012-2017
average
201120102009Operations
Summary
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22
Kittilä Mine Ore Processing
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Kittilä Mine Flow Sheet
Sulphur Flotation
NeutralisationAcidulation Autoclave
CCDCircuit
Process Water
Acid Water
Sulphur Concentrate
Doré Bar
Leaching(C.I.L. ) Carbon
Stripping
Cyanide Destruction
C.I.L Tailing DisposalFlotation Tailing Disposal
Reclaim Water
S.A.G.
Surge Bin
Pit & Underground
Crushing
OxygenPlant
Sulphur Flotation Tailing
CarbonFlotation
Carbon Concentrate
Grinding
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Kittilä Mine Ore Processing
Phase 1: concentrate production started in September.
Phase 2: startup and commissioning final stages of processing (autoclave) ongoing
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Kittilä Mill Control Room
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Kittilä Mill Production Target 2009
Production 2009 Mined ore tonnes 1.050.000 T Gold grade in ore 5,24 g/t Recovery in flotation % 92,0 % Recovery in leaching % 92,0 % Global Recovery 84,6 % Global Gold production, Ozs 150.000 T
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Kittilä Mill Autoclave
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Construction of tailings pond completed September 2008
Waterproof bitumen geo-membrane bottom layer in pond.
Water pumping stationbuilt at Seurujoki River
28
Kittilä Mine Tailings Facility
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1100 km
550 km
300 km
550 km
LARGE GREENSTONE BELT
Greenstone Belt extending from the Nowegian coast, through Sweden and Finland and into Russia.
Similar to large greenstone belts in Australia, North America and Africa.
Unexplored compared to other Greenstone Belts.
In spite of this, several notable deposits have been found and mined:
Pahtohavare (Cu, Au)Viscaria (Cu, Au)Kautokeino (Cu, Au)Saattopora (Au 200 000 oz, 3.6 g/t)Pahtavaara (Au 300 000 oz, 3.5 g/t)
Suurikuusikko, in the Kittilä greenstones, is centrally located in the belt.
Anomalous in size - unique
Gold Deposits in Lapland
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Kittilä Mine Reserves and Resources
Diamond Drilling at SuurikusikkoGTK: (1987-1997)
77 holes - 9 km Riddarhyttan: (1998-2005)
468 holes -143 kmAEM: 2006-2008
575 holes - 140 kmCurrent
Total 8 drills - 4 on exploration
KITTILÄ RESERVES AND RESOURCESTonnes (Mt) Au g/t Au Moz
Probable Mineral ReserveProbable Mineral Reserve 18.2 5.1 3.0Indicated Mineral ResourceIndicated Mineral Resource 5.4 3.0 0.5Inferred Mineral ResourceInferred Mineral Resource 15.7 4.3 2.2GRAND TOTALGRAND TOTAL 39.4 4.5 5.7
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1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Est.
Target:18 - 20
LaRonde Goldex Lapa Kittila MeadowbankPinos Altos
Kittilä currently AEM’s second largest in term of reserves and resources
Targeting additional reserve conversion
Positioned for further growth
Kittilä Mine Growth Potential
(Millions of Ounces)
3.0 3.3 3.3 4.0
10.47.97.9
1.3
12.5
16.7
31
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N
Kittilä Mine Ore Lenses
PLAN VIEW
LONGSECTIONKetola Etelä Suurikuusikko Roura Rimpi
1 km
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Recent deep drilling has continued to expand gold resource at depth
Drilling ongoing to convert large gold resource into reserves and extend the zones
Discovery Cost $5 per ounce
Drilling planned for 2009 Exploration drilling - over 40 km7 surface drill rigs and 1 underground rigBranching of deep drill holesResource-to-Reserve conversion drilling -over 25 km
33
Kittilä Mine Mine Exploration
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Kittilä Mine New Gold Zones at Depth
Ketola Etelä Suuri North Roura RimpiCentral Roura
1000 m
Latest Drill HolesGold g/t / True Width meters
9000
N
1000 m1000 m
0 m0 m
8000
N
7000
N
6000
N
5000
N
SUU070152.7 / 3.0 4.7 / 5.9
SUU070166.7/ 3.0
Exploration upside Probable Reserve Mineral Resource
ROU080012.16 / 47.5
Incl.8.3 / 3.0
4.17 / 3.95.43 / 6.3 11.3 / 2.4
ROU070104.64 / 7.6
SUU08001B5.39 / 3.9 4.36 / 3.46.30 /16.6
SUU080032.86/ 3.2
8.08/ 11.6 4.21/ 3.2
SUU070191.07 / 2.9 4.69 / 3.9
Longitudinal SectionLongitudinal Section
SUU061065.5 / 4.9
2,195
527
2,996
Au (000’s oz)
15,7364.34Inferred Resource
5,4163.03Indicated Reserve
18,2055.12Probable Reserve
Tonnage (000’s t)Au (g/t)Kittilä
Reserve & Resource July 2008
SUU070038.3 / 15.1
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Kittilä Mine New Gold Zones at Depth
Ketola Etelä Suuri North Roura RimpiCentral Roura
1000 m
Latest Drill HolesGold g/t / True Width meters
9000
N
1000 m1000 m
0 m0 m
8000
N
7000
N
6000
N
5000
N
SUU070152.7 / 3.0 4.7 / 5.9
SUU070166.7/ 3.0
Exploration upside Probable Reserve Mineral Resource
ROU080012.16 / 47.5
Incl.8.3 / 3.0
4.17 / 3.95.43 / 6.3 11.3 / 2.4
ROU070104.64 / 7.6
SUU080032.86/ 3.2
8.08/ 11.6 4.21/ 3.2
SUU070191.07 / 2.9 4.69 / 3.9
Longitudinal SectionLongitudinal Section
SUU061065.5 / 4.9
SUU070038.3 / 15.1
Section 36500 N
SUU08001B5.39 / 3.9 4.36 / 3.46.30 /16.6
Probable reserves 3.0 Moz Resource Potential
Roura Deep (600 – 1100m)
Suuri - Roura Deep (1100 – 1400m)
Parallel zones (East ,West and Central)
Reserve potential (resource conversion)Kittila Mine (0- 800m) -Indicated 0.5 Moz
-Inferred 1.2 MozSuuri Deep (800 – 1100 m) -Inferred 1.0 Moz
Indicated 0.5 Indicated 0.5 MozMozInferred 1.2 Inferred 1.2 MozMoz
Kittila MineKittila Mine
Inferred 1.0 Inferred 1.0 MozMoz
1100 m
800 m
1400 m
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0 m
500 m
1000 m
5800
0 E
5850
0 E
5900
0 E
Potential
West Zone
Potential
Central Zone
Potential
East Zone
Pit Outline
Kittila Mine Section 36500N Looking North
Latest Drill HolesGold g/t / True Width meters
ProbableReserve
Mineral Resource
SUU080034.21 / 3.2
SUU080032.86 / 3.2
8.08 / 11.6
New Lens
?
?
250 m
Resource Potential in parallel zones
WW EE
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N
Ketola Etela Suuri Roura Rimpi
PLAN VIEW
LONGSECTION
Surface
UndergroundExploration Drilling 2009 41.9 km diamond drilling
39.7 km surface2.2 km underground
Suuri and Roura Deep (800-1400 level)
Devico (branching) drilling
Other areas 300-800m
Kittilä Mine Mine Exploration Drill targets
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Kittilä Mine
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REGIONAL EXPLORATION TARGET RANKING BASED ON:
•Potential to add ounces
•Recent Drilling Results
•Closeness to Kittilä Mine
•Prospective Geology
•20 km of strike length potentialat Suuri
Drilling 2009 Suurikusikko Trend - Main Targets:
Hako, test extensions to previous gold intersections Retu, test extensions to the know gold zones Total 10 km drilling
Other Areas of Central Lapland 1.5 km driling on several targets
Suurikuusikko
Central Lapland
Oijärvi
Agnico-Eagle Landholdings in Finland
Exploration - Finland
100 Km
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EXPLORATION/OIJÄRVI
Exploration - Finland
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LODE 1
LODE 2
Paralell zone
EXPLORATION/OIJÄRVI/ KYLMÄKANGAS
Exploration - Finland
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Kittilä Mine Challenges
Shortage of experienced workforce – manpower
Optimise the process plant
Develop underground mine
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Kittilä Mine Opportunities
Lower dilution
Expanding deposit – potential production increase
Optimise the process plant
Well educated workforce, gaining experience daily
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Kittilä Mine Summary
Open pit & U/G performing according to plan
Processing plant operational
Workforce challenges appear to be softening
Deposit continues to grow