Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM)  reported financial and operating results for the first quarter of 2023.

“The year is off to a good start with strong operational results and the best quarterly safety performance in the Company’s over 65-year history, which positions us well to meet our full year guidance projections. Costs were better than expected, primarily due to the strong operating results, favourable currency movements and a slight easing of inflationary pressures,” said Ammar Al-Joundi, Agnico Eagle’s President and Chief Executive Officer. “With the completion of the acquisition of Yamana’s Canadian assets on March 31^st, our focus in 2023 continues to be on the optimization of our strategic positions in the Abitibi gold belt, with an aim of increasing annual gold production from this region by approximately 500,000 ounces by the end of the decade. Efforts are ongoing to evaluate several opportunities to leverage existing infrastructure which has the potential to significantly increase future gold production at lower capital intensity and with a reduced environmental footprint. If realized, these opportunities have the potential to deliver increased returns to our shareholders with reduced execution and operating risk,” added Mr. Al-Joundi.

First quarter 2023 highlights – Solid operational performance and important strategic consolidations

• Strong quarterly production and costs with record safety performance – Payable gold production¹ in the first quarter of 2023 was 812,813 ounces at production costs per ounce of $804, total cash costs per ounce² of $832 and all-in sustaining costs (“AISC”) per ounce3 of $1,125. These results include only the Company’s 50% of the production from the Canadian Malartic mine up to March 30, 2023, and 100% thereafter
• Solid quarterly financial results – The Company reported quarterly net income of $3.87 per share in the first quarter of 2023, with adjusted net income⁴ of $0.58 per share. Operating cash flow was $1.30 per share. The quarterly net income of $3.87 per share includes a remeasurement gain of approximately $1.5 billion arising from the acquisition of 50% of the Canadian Malartic complex not previously owned by the Company
• Gold production, cost and capital expenditure guidance reiterated for 2023 – Expected payable gold production in 2023 remains unchanged at approximately 3.24 to 3.44 million ounces with total cash costs per ounce expected to be between $840 and $890 and AISC per ounce expected to be between $1,140 and $1,190. Total capital expenditures (excluding capitalized exploration) for 2023 are still estimated to be approximately $1.42 billion. The Company’s 2023 production, costs and capital expenditure guidance assumes 50% ownership of Canadian Malartic for the first three months of 2023 and 100% ownership for the last nine months of the year
• Update on key value drivers and pipeline projects

• • Odyssey project – Good progress was made on underground development and surface construction activities in the first quarter of 2023. Underground development via ramp access has now passed the bottom of the Odyssey South deposit and has reached the level of the first shaft access point. Shaft sinking activities have also commenced. The first production blast occurred at the Odyssey South deposit in late March 2023. Drilling activities were focused on infilling the internal zones at the Odyssey South deposit and mineral resource expansion of the East Gouldie deposit to the east and west
  • Detour Lake – In the first quarter of 2023, the mill set a record for first quarter throughput and activities continued to focus on mill process optimization and improving availability with the goal of achieving and potentially exceeding throughput of 28.0 million tonnes per annum (“Mtpa”). Step out drilling continued to the west of the resource pit shells and the Company is integrating additional drill data into a revised mineral resource model that will be used to evaluate potential underground mining scenarios
  • Optimization of assets and capital infrastructure in the Abitibi region – With the Company now owning of 100% of Canadian Malartic complex, the Company expects to have up to 40,000 tonnes per day (“tpd”) of excess mill capacity at Canadian Malartic Complex starting in 2028. By maximizing the mill throughput in the region, the Company believes there is potential to increase future gold production at lower capital costs and with a reduced environmental footprint. Internal evaluations are underway to assess potential production opportunities at the Macassa near surface deposits and the Amalgamated Kirkland (“AK”) deposit, Upper Beaver and the Wasamac project. These evaluations are expected to be completed by year-end 2023
• Continued exploration success at Meliadine, Kittila, LaRonde Zone 5 and Goldex expected to drive future mineral reserve and mineral resource additions
  • Meliadine – Drilling has targeted the vertical extensions of the mineralized zones in the central part of the Tiriganiaq and Wesmeg deposits. At Tiriganiaq, a recent intercept yielded 17.2 grams per tonne (“g/t”) gold over 4.9 metres at 770 metres depth. At Wesmeg, drilling in the eastern part of the deposit continues to return wide, high-grade intersections, with recent results including 8.9 g/t gold over 7.0 metres at 532 metres depth
  • Kittila – Drilling has extended the Rimpi Main Zone to the north, outside of the current mineral resources, with highlights of up to 5.0 g/t gold over 9.2 metres at 1,141 metres depth. In addition, drilling has extended the Rimpi Zone mineralization down-plunge from the Roura area within the Parallel / Sisar zones, with intercepts of up to 5.0 g/t gold over 4.9 metres at 1,199 metres depth
  • LZ5 – Drilling continues to expand the mineral resource envelope which now extends to a depth of 950 metres, with highlights including 3.0 g/t gold over 30.0 metres at 671 metres depth and 3.7 g/t gold over 10.1 metres at 840 metres depth. Inferred mineral resources are expected to be added at depths between 770 and 950 metres by year-end 2023
  • Goldex – Infill drilling in the South Zone Sector 3 has returned high-grade results, including 9.8 g/t gold over 15.5 metres at 1,246 metres depth and 6.0 g/t gold over 12.0 metres at 1,274 metres depth. Initial drilling in the W Zone (approximately 200 metres west of the main Goldex deposit) has returned 1.8 g/t gold over 35.0 metres at 480 metres depth in an area with historical mineralized inventory
• Acquisition of Yamana’s Canadian assets and 50/50 San Nicolás copper-zinc joint venture with Teck completed
  • Yamana Transaction – The previously announced transaction to acquire the Canadian assets of Yamana Gold Inc. (“Yamana”) closed on March 31, 2023 (the “Yamana Transaction”), and the Company now owns 100% of the Canadian Malartic Complex, the Wasamac project located in the Abitibi region of Quebec and several other exploration properties located in Ontario and Manitoba. The closing of the Yamana Transaction further solidifies the Company’s presence in the Abitibi gold belt, a region of low political risk and high geological potential, where the Company has a strong competitive advantage from having operated in the region for over 50 years
  • San Nicolás – The previously announced 50/50 joint venture agreement between Teck Resources Limited (“Teck”) and Agnico Eagle in respect of the San Nicolás copper-zinc development project located in Zacatecas, Mexico was entered into on April 6, 2023. Minera San Nicolás S.A.P.I de C.V., the joint venture company that holds the project, is now working to advance permitting and development of the project and is planning to submit an Environmental Impact Assessment and permit application for San Nicolás in 2023 and is targeting completion of a feasibility study in 2024
• 2022 sustainability report published, illustrating continued commitment to strong ESG performance and implementation of a climate strategy action plan – In 2022, Agnico Eagle maintained or improved performance across many key ESG indicators, including safety performance, efficient management of water resources and increased Indigenous employment. In addition, efforts were accelerated in 2022 to maintain a climate resilient business by setting an interim reduction target of 30% of absolute Scope 1 and 2 emissions by 2030, and publication of the Company’s first Climate Action Report
• A quarterly dividend of $0.40 per share has been declared

Annual Meeting

The Company will host its Annual and Special Meeting of Shareholders  on Friday, April 28, 2023 at 11:00 am (E.D.T).  During the AGM, management will provide an overview of the Company’s activities.

Hybrid Format

The AGM will be held in person at the Arcadian Court, 401 Bay Street, Simpson Tower, 8th Floor, Toronto, Ontario, M5H 2Y4 and online at: https://meetnow.global/M5UPTSH.

The Company is conducting a hybrid meeting that will allow registered shareholders and duly appointed proxyholders to participate both online and in person. The Company is providing the virtual format in order to provide shareholders with an equal opportunity to attend and participate at the AGM.

For details explaining how to attend, communicate and vote virtually at the AGM please see the Company’s Management Information Circular dated March 21, 2023 filed under the Company’s profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Shareholders who have questions about voting their shares or attending the AGM may contact Investor Relations by telephone at 416.947.1212, by toll-free telephone at 1.888.822.6714 or by email at info@agnicoeagle.com or the Company’s strategic shareholder advisor and proxy solicitation agent, Laurel Hill Advisory Group, at 1.877.452.7184 (toll free in North America), at 1.416.304.0211 (for collect calls outside of North America) or by e-mail at assistance@laurelhill.com.

First Quarter 2023 Financial and Production Results

In the first quarter of 2023, net income was $1,816.9 million ($3.87 per share). This result includes the following items (net of tax): a remeasurement gain arising from the acquisition of the remaining 50% of the Canadian Malartic complex of $1,543.4 million ($3.29 per share), transaction costs relating to the acquisition of the Canadian assets of Yamana of $12.5 million ($0.03 per share), foreign currency translation gains on deferred tax liabilities of $10.6 million ($0.02 per share), and mark-to-market gains on the Company’s investment portfolio of $4.1 million ($0.01 per share).

Excluding the above items results in adjusted net income of $271.3 million or $0.58 per share for the first quarter of 2023. For the first quarter of 2022, the Company reported net income of $119.1 million ($0.31 per share).

Included in the first quarter of 2023 net income, and not adjusted above, is a non-cash stock option expense of $4.7 million ($0.01 per share).

The increase in net income in the first quarter of 2023 compared to the prior-year period is primarily due to the remeasurement gain.  This gain is a result of the application of purchase accounting relating to a business combination attained in stages, which requires the remeasurement on the subsequent acquisition of the Company’s previously held 50% interest in the Canadian Malartic complex to fair value.

The fair value of the Company’s previously held 50% interest and the resulting gain on remeasurement, along with the fair values allocated to assets acquired and liabilities assumed are preliminary, and are subject to adjustment based on further analysis and evaluation over the course of the measurement period which may not exceed twelve months from the acquisition date.

Additionally, higher mine operating margins⁵ from higher sales volumes (see discussion below) and lower other expenses from lower transaction costs were partially offset by higher amortization and higher income and mining taxes.

In the first quarter of 2023, cash provided by operating activities was $649.6 million ($608.8 million before changes in non-cash components of working capital), compared to the first quarter of 2022 when cash provided by operating activities was $507.4 million ($366.0 million before changes in non-cash components of working capital).

Cash provided by operating activities (before changes in non-cash components of working capital) increased in the first quarter of 2023 when compared to the prior-year period primarily due to higher sales volumes following the merger (the “Merger”) between Agnico Eagle and Kirkland Lake Gold Ltd. (“Kirkland Lake Gold”) as opposed to the 58 days of production that followed the Merger in 2022.

In the first quarter of 2023, the Company’s payable gold production was 812,813 ounces. This compares to quarterly payable gold production of 660,604 ounces in the prior-year period.  Including the entire quarter’s production from the pre-Merger Kirkland Lake Gold mines, pro forma total gold production in the first quarter of 2022 was 806,329 ounces.

Payable gold production increased in the first quarter of 2023 when compared to the prior-year period, primarily due to the inclusion of additional days of production in the 2023 period as described above at the Detour Lake, Fosterville and Macassa mines.

In the first quarter of 2023, production costs per ounce were $804, compared to $1,002 in the prior-year period. In the first quarter of 2023, total cash costs per ounce were $832, compared to $811 in the prior-year period.

Production costs per ounce decreased in the first quarter of 2023 when compared to the prior-year period primarily as a result of the revaluation of gold inventory held by Kirkland Lake Gold on February 8, 2022.  A detailed description of the minesite costs per tonne at each mine is set out below.  Total cash costs per ounce increased in the first quarter of 2023 when compared to the prior year period primarily due to higher inventory adjustments and lower by-product revenues from the LaRonde mine and Pinos Altos mine.

In the first quarter of 2023, AISC per ounce were $1,125, compared to $1,079 in the prior-year period.  AISC per ounce increased in the first quarter of 2023 when compared to the prior-year period primarily due to higher total cash costs per ounce and higher sustaining capital expenditures, partially offset by lower general and administrative expenses.

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⁵ Operating margin is a non-GAAP measure that is not a standardized measure under IFRS.  For a reconciliation to net income see “Reconciliation of Non-GAAP Financial Performance Measures” below. See also “Note Regarding Certain Measures of Performance”.

Financial Flexibility Remains Strong After Acquisition of Yamana’s Canadian Assets

Cash and cash equivalents increased to $744.6 million at March 31, 2023, from the December 31, 2022 balance of $658.6 million, primarily due to improved operating margins. On March 30, 2023 the Company drew down $1.0 billion from its unsecured revolving bank credit facility and funded the approximately $1.0 billion of cash consideration payable in connection with the Yamana Transaction.

In addition to the quarterly dividend, the Company contributed to shareholder returns through its normal course issuer bid (“NCIB”). In the first quarter of 2023, under the NCIB, the Company repurchased 100,000 common shares for $4.8 million.  From the commencement of the NCIB on May 4, 2022 until March 31, 2023, under the NCIB, the Company repurchased 1,669,620 common shares for an aggregate of $74.6 million. The NCIB permits the Company to purchase up to $500.0 million of its common shares (up to a maximum of 5% of its issued and outstanding common shares).  Purchases under the NCIB may continue for up to one year from the commencement day of May 4, 2022.

The Company intends to seek approval from the TSX to renew the NCIB, pursuant to which the Company would be permitted to purchase up to the lessor of (i) 5% of its issued and outstanding common shares and (ii) the number of common shares that may be purchased by the Company for an aggregate purchase price, excluding commissions of $500.0 million. Purchases under the NCIB may continue for up to one year from the expected commencement date of May 3, 2023. If approved, purchases under the NCIB will be made through the facilities of the TSX, the NYSE or other designated exchanges and alternative trading systems in Canada and the United States in accordance with applicable regulatory requirements.  All common shares purchased under the NCIB will be cancelled.

Subsequent to quarter end, on April 7, 2023, Moody’s upgraded its credit rating outlook for the Company to “positive” from “stable”, while affirming the credit rating at Baa2, reflecting the Company’s strong business and credit profile, while maintaining low leverage and conservative financial policies. On April 20, 2023, the Company entered into a credit agreement with a group of financial institutions that provides a $600 million unsecured term credit facility (the “Term Credit Facility”). The Company expects to draw down in full on the Term Credit Facility on April 28, 2023 and will use the proceeds to partially repay the amounts drawn on the unsecured revolving bank credit facility. The Term Credit Facility matures and all indebtedness thereunder is due and payable on April 21, 2025. The Term Credit Facility is available as a single advance in US dollars through SOFR and base rate advances, priced at the applicable rate plus a margin that ranges from 0.00% to 2.00% depending on the Company’s credit rating. The Term Credit Facility may be prepaid without penalty.  At March 31, 2023 the Company’s net debt⁶ totaled $1,597.9 million.

Approximately 57% of the Company’s remaining 2023 estimated Canadian dollar exposure is hedged at an average floor price above 1.32 C$/US$.  Approximately 29% of the Company’s remaining 2023 estimated Euro exposure is hedged at an average floor price of approximately 1.03 US$/EUR.  Approximately 59% of the Company’s remaining 2023 estimated Australian dollar exposure is hedged at an average floor price above 1.45 A$/US$.  Approximately 33% of the Company’s remaining 2023 estimated Mexican peso exposure is hedged at an average floor price above 20.70 MXP/US$. The Company’s full year 2023 cost guidance is based on assumed exchange rates of 1.32 C$/US$, 1.10 US$/EUR, 1.40 A$/US$ and 20.00 MXP/US$.

Including the remaining diesel purchased for the Company’s Nunavut operations on the 2022 sealift (consumed to mid-year 2023), approximately 50% of the Company’s diesel exposure for 2023 is hedged at an average price of $0.80 per litre, compared to the 2023 cost guidance assumption of $0.93 per litre. These hedges have partially mitigated the effect of inflationary pressures to date and are expected to provide some protection against inflation going forward.

The Company will continue to monitor market conditions and anticipates continuing to opportunistically add to its operating currency and diesel hedges to strategically support its key input costs. Current hedging positions are not factored into 2023 and future guidance.

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⁶ Net debt is a non-GAAP measure that is not a standardized measure under IFRS.  For a reconciliation to long-term debt, see “Reconciliation of non-GAAP Financial Performance Measures” below.  See also “Note Regarding Certain Measures of Performance”.

Dividend Record and Payment Dates for the Second Quarter of 2023

Agnico Eagle’s Board of Directors has declared a quarterly cash dividend of $0.40 per common share, payable on June 15, 2023 to shareholders of record as of June 1, 2023. Agnico Eagle has declared a cash dividend every year since 1983.

Expected Dividend Record and Payment Dates for the 2023 Fiscal Year

*Paid
**Declared

Dividend Reinvestment Plan

See the following link for information on the Company’s dividend reinvestment plan: Dividend Reinvestment Plan

International Dividend Currency Exchange

In the first quarter of 2023, the Company and Computershare Trust Company of Canada entered into a Currency Exchange Services Agreement pursuant to which Computershare will now offer shareholders of the Company outside of Canada and the United States the opportunity to receive dividends in their preferred local currency.  Computershare mailed enrollment forms and an information package to shareholders on April 17, 2023, and the service will be available beginning with the dividend to be paid in the second quarter 2023 for those shareholders that have registered.  Any fees payable in connection with the currency exchange service will be paid by individual shareholders who elect to enroll in the program. For more information, please contact Computershare by phone at 1.800.564.6253 or online at www.investorcentre.com or www.computershare.com/investor.

Capital Expenditures

In the first quarter of 2023, capital expenditures were $310.5 million and capitalized exploration expenditures were $31.3 million, for a total of $341.7 million. Total expected capital expenditures (including capitalized exploration) remain in line with guidance for the full year 2023.

The following table sets out capital expenditures (including sustaining capital expenditures⁷ and development capital expenditures⁷) and capitalized exploration in the first quarter of 2023.

2022 Sustainability Report Illustrates Continued Commitment to Strong ESG Performance and Implementation of Climate Strategy Action Plan

On April 27, 2023, Agnico Eagle released its 2022 Sustainability Report. The Report provides an update on the Company’s oversight, strategy, practices and risk management approach to key areas of health and safety, ESG and the historic sustainability performance of mining operations.

This marks the 14^th year that the Company has produced a detailed account of its ESG performance. The Report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards, is aligned with the Task Force on Climate Related Financial Disclosures (TCFD) and includes additional mining industry specific indicators from the Sustainability Accounting Standards Board (SASB) Metals and Mining disclosures and metrics.

The theme of the Report, “we make mining work”, reflects the Company’s long-standing approach to responsibly develop mineral resources for the benefit of all.

Everywhere we operate, we make mining work by:

Having strong ESG performance – In 2022, the Company maintained or improved performance across many key ESG indicators, including achieving the Company’s best safety frequency performance in its over 65-year history, zero significant environmental incidents, the efficient management of water (recycling 78% of water for operational use and reducing freshwater usage per ounce of gold produced), and increased Indigenous employment. The Company continued to invest and contribute in the communities in which it operates with a total of $16 million in community investments and $1.4 billion in local procurement in 2022

Addressing climate-change and working towards net-zero by 2050 – In 2022, Agnico Eagle increased its efforts to maintain a climate resilient business by setting an interim reduction target of 30% of absolute Scope 1 and 2 emissions by 2030, completing site specific climate-related physical risk assessments, conducting preliminary scenario planning and publishing the Company’s first Climate Action Report. The Company’s greenhouse gas profile, with an intensity of 0.4 tonnes of CO2 equivalent per ounce of gold produced, continues to position Agnico Eagle as a low GHG intensity gold producer. The Report also provides an estimate of Scope 3 emissions

Being a great place to work – The Company is committed to providing a safe, diverse, inclusive and collaborative workplace for its people. In 2022, the Company launched Sanajiksanut in Nunavut, a tailored hiring program designed to empower and increase the Inuit workforce; in support of gender diversity, six women were welcomed into a scholarship and development program in memory of former Agnico Eagle director, Dr. Leanne Baker; and Agnico Eagle Mexico was named as one of the Best Places to Work in Mexico 2022 for its commitment to creating a safe, healthy and engaging workplace

Community investments – Being a trusted and valued member of the communities associated with our operations remains a fundamental principle and priority for Agnico Eagle. In 2022, employees from the Company’s Fosterville mine were extensively involved in helping communities in Central Victoria recover from devastating floods that hit the region late in the year and the Company pledged AUD750,000 to help the community recover from the devastation. The Company also collaborated with the Government of Sonora in Mexico on the construction of a water supply well in Tarachi, benefiting 358 people. The Company continues to provide support to vulnerable groups, including sponsoring a foodshare program in Bendigo, Australia and holding food drive collections.  In 2022, the Company contributed $5.6 million in health-related community investments across the organization

Mining responsibly – The Company is committed to being a responsible miner and contributing to the sustainable development of the regions in which it operates. The Company is a longtime supporter of recognized international sustainability frameworks, including Towards Sustainable Mining (TSM), Responsible Gold Mining Principles (RGMP), the Voluntary Principles on Security and Human Rights (VPSHRs), the Conflict-Free Gold Standard and the Task Force on Climate-related Financial Disclosures

The Company’s 2022 Sustainability Report can be accessed here.

Update on Key Value Drivers and Pipeline Projects

Highlights on the key value drivers (Odyssey project, Detour Lake mine and optimization of assets and capital infrastructure, including excess mill capacity in the Abitibi region of Quebec) and the Hope Bay project are set out below.  Details on certain mine expansion projects (Macassa shaft and new ventilation system, Kittila shaft, Meliadine Phase 2 and Amaruq underground) are set out in the applicable operational sections of this news release.

Odyssey Project

Good progress was made on underground development and surface construction activities in the first quarter of 2023. Underground development via ramp access reached the bottom of the Odyssey South deposit and the shaft access point at level 54. Shaft sinking activities have also commenced.

The first production blast occurred at the Odyssey South deposit in late March 2023, and the underground operations are on track to produce approximately 50,000 ounces of gold in 2023.

Sixteen drill rigs are currently active on the Canadian Malartic property, including: five underground drills in the Odyssey South and Internal zones; four surface drills focused on expanding and infilling the East Gouldie mineralization; four drill rigs investigating new regional targets around the Odyssey mine and Canadian Malartic mines; and three drill rigs investigating near-surface targets at the Camflo property.

During the first quarter of 2023 on a 100% basis, 22,358 metres of expensed drilling and 33,506 metres of capitalized drilling were completed.  Drilling targeted several areas that are part of the Odyssey mine, including the infill of the East Gouldie deposit from surface and of the Odyssey South and Odyssey Internal zones from the exploration ramp.

Exploration drilling also continued to investigate the broader East Gouldie mineralized zone and extended the zone laterally to the east and to the west. Regional exploration drilling was mostly focused on a first phase of investigation of the near-surface potential around the past-producing Camflo mine located 4.0 kilometres northeast of the Odyssey mine infrastructure.

The Company is planning to provide an update on the Odyssey mine with an internal study as well as exploration results and exploration plans on the larger Canadian Malartic land package in June 2023.

Detour Lake Mine

In the first quarter of 2023, the mill set a record for first quarter throughput and activities continued to focus on mill process optimization and improving availability with the goal of achieving and potentially exceeding throughput of 28.0 Mtpa.

In 2023, the processing plant will focus on runtime improvements, monitoring the higher throughput and enhancing the Company’s understanding of the normal wear and tear on the equipment to better optimize and stabilize the throughput.

Exploration drilling at Detour Lake in the first quarter of 2023 was primarily focused on West Pit conversion drilling and exploration drilling of various regional targets. Ten drill rigs were active and completed 5,839 metres of expensed drilling and 59,374 metres of capitalized drilling.

During the quarter, approximately 20,000 metres of infill drilling targeted gold mineralized horizons within and below the West Pit mineral reserves to examine the continuity of gold grades between previous drill holes. These areas contain higher grade zones currently being investigated for underground mining potential. The program targeted two areas: at the western limit of the West Pit and close to the eastern limit of the West Pit.

Recent drill results from infill drilling at the western limit of the West Pit mineral resources correlate well with the initial drilling in the area and continue to define wide zones of gold mineralization containing high grade gold inclusions.  Highlights include: hole DLM23-617, which intersected 2.9 g/t gold over 30.4 metres at 309 metres depth; hole DLM23-631, which intersected 3.0 g/t gold over 26.3 metres at 294 metres depth and 2.6 g/t gold over 27.5 metres at 450 metres depth, including 10.7 g/t gold over 5.0 metres at 468 m depth; hole DLM23-641, which intersected 6.7 g/t gold over 29.6 metres at 424 metres depth, including 16.2 g/t gold over 11.1 metres at 431 m depth; hole DLM23-601, which intersected 4.6 g/t gold over 15.4 metres at 311 metres depth and 2.8 g/t gold over 10.1 metres at 395 metres depth; and hole DLM23-603, which intersected 3.7 g/t gold over 17.3 metres at 271 metres depth, 3.0 g/t gold over 9.7 metres at 314 metres depth and 3.0 g/t gold over 18.0 metres at 410 metres depth.

Recent infill drilling results from the eastern limit of the West Pit mineral reserves and mineral resources confirm wide zones of gold mineralization containing high grade gold inclusions.  Highlights include: hole DLM23-593W, which intersected 3.5 g/t gold over 15.1 metres at 306 metres depth, 3.0 g/t gold over 13.1 metres at 361 metres depth and 2.5 g/t gold over 15.8 metres at 495 m depth; hole DLM23-599, which intersected 1.7 g/t gold over 57.0 metres at 475 metres depth and 4.8 g/t gold over 25.6 metres at 550 metres depth; and hole DLM23-616, which intersected 2.9 g/t gold over 25.3 metres at 439 metres depth and 3.2 g/t gold over 20.3 metres at 474 metres depth.

Exploration drilling in the West Pit Extension Zone targeting the westerly plunge of the deposit below and west of the West Pit Zone continues to be encouraging.  First quarter results include additional wide intervals of gold mineralization with high-grade intersections that support the potential to continue growing the “out-pit” mineralization, which extends more than 2.4 kilometres west of the current mineral resource pit.

Recent drilling in the West Pit Extension Zone further confirms the down-plunge western extension of the deposit, with highlights that include: hole DLM22-579, which intersected 0.9 g/t gold over 68.7 metres at 824 metres depth and 2.8 g/t gold over 10.7 metres at 872 metres depth; hole DLM22-577, which intersected 2.3 g/t gold over 22.4 metres at 752 metres depth and 14.1 g/t gold over 8.4 metres at 777 metres depth at a distance of 451 metres down-plunge to the west from the current mineral resource pit; and hole DLM22-580, which intersected 4.2 g/t gold over 21.3 metres at 660 metres depth.

Planned drilling at Detour Lake for the full year 2023 is comprised of 14,000 metres of expensed drilling and 157,000 metres of capitalized drilling.

Selected recent drill results from Detour Lake are set out in a table in the Appendix and in the plan map and composite longitudinal section below.

[Detour Lake Mine – Plan Map and Composite Longitudinal Section]

The Company is integrating additional drill data from late 2022 and the first quarter of 2023 into a revised mineral resource model that will be used to evaluate potential underground mining scenarios. An internal evaluation of the underground mining potential is expected to be completed by early 2024.

Optimization of assets and capital infrastructure, including excess mill capacity in the Abitibi region

With the closing of the Yamana Transaction, the Company expects to have up to 40,000 tpd of excess mill capacity at Canadian Malartic starting in 2028. By maximizing the mill throughput on a regional basis, the Company believes there is potential to increase future gold production at lower capital costs and with a reduced environmental footprint. Internal evaluations are underway to assess potential production opportunities at the Macassa near surface deposits and the AK deposit, Upper Beaver and other Kirkland Lake satellite deposits, as well as the Wasamac project.

The near surface and AK deposits are accessible from an existing surface ramp at Macassa.  Production from the near surface deposits is expected to commence later this year, while production from the AK deposit could potentially begin in 2024.  Alternatives to process these ores at the LaRonde complex, which is approximately 130 kilometres away, and avoid capital costs associated with a mill expansion at Macassa are under review.  Average annual production from these two deposits could potentially be 20,000 to 40,000 ounces of gold, commencing in 2024.

Infill drilling in the AK deposit during the first quarter of 2023 featured highlights of 14.7 g/t gold over 5.3 metres at 295 metres depth in hole KLAK-169 and 13.0 g/t gold over 4.9 metres at 264 metres depth in hole KLAK-171. The AK deposit remains open towards the west and vertically along the west fringe.

Upper Beaver has the potential to be a low-cost mine, with the Company evaluating scenarios with annual production of 150,000 to 200,000 ounces of gold with moderate capital outlays and initial production potentially commencing in 2029. Processing scenarios with the potential to reduce initial capital costs are being considered, including transporting the ore to the Canadian Malartic mill for processing. An updated internal technical evaluation of the project is expected to be completed in late 2023.

Prior to the closing of the Yamana Transaction, Yamana completed 29 drill holes totalling 14,673 metres at the Wasamac project in the Abitibi region of Quebec.

The objectives of the drill program were to infill the Main deposit at Wasamac, with a highlight result of 4.7 g/t gold over 54.1 metres at 463 metres depth in hole WS22-589, and investigate the vertical and lateral extensions of mineralization at the past-producing Francoeur Mine, which forms part of the Wasamac project.

The Company is reviewing the recent exploration programs and studies that were completed at the Wasamac project and assessing the potential for exploration upside prior to continuing further exploration.  An updated technical evaluation of the project is expected to be completed in late 2023.  More details on the Wasamac project were provided in the Company’s news release of February 16, 2023.

Hope Bay – Drilling Continues at Doris and Madrid; Multiple High-Grade Zones Confirmed and Extended

Exploration drilling at Hope Bay continued during the first quarter of 2023, with six drill rigs operating on surface at the Doris and Madrid deposits and three drill rigs operating underground at Doris, completing a total of 39,859 metres in 79 holes.

At Doris, highlight hole HBBCO23-153 intersected 15.0 g/t gold over 6.4 metres at 422 metres depth to expand the vertical size of the BCO fold hinge, which is a high-grade shoot within the BCO Zone.  Hole HBD23-071 extended the BCO Zone to the south by 200 metres along strike and down plunge of known mineralization, intersecting 17.1 g/t gold over 4.8 metres at a vertical depth of 607 metres.

Underground development advanced during the quarter, allowing exploration drilling to test additional BCO and BCN targets to the south from underground.

At Madrid, exploration drilling during the first quarter of 2023 shifted towards wider step-out holes at a spacing of 100 metres or more from known mineralization in the Naartok East, Spur, Suluk and Patch 7 zones. Highlights include hole HBM23-065 at Naartok East, which intersected 6.8 g/t gold over 3.7 metres at 336 metres depth. Results from step-out drilling at Suluk and Patch 7 are pending.

Drilling is also planned this year at regional targets outside of the main deposit footprints, including the southern extension of the Doris geological structure located one kilometre east of the Madrid deposit.

At the Hope Bay property in 2023, the Company expects to complete 72,200 metres of drilling in a $30.6 million exploration program that includes 30,800 metres of underground exploration drilling at the Doris deposit to explore the extensions of mineralization and potentially add mineral reserves and mineral resources in the BTD Zone to the north and in the BCO, BCN and West Valley zones below the dike.  The Company expects to spend $17.3 million for 41,400 metres of surface drilling into exploration targets around the Doris mine, between the Doris and Madrid deposits, and around the Madrid deposit with the objective of adding mineral reserves and mineral resources to the project.

The Company continues to advance an internal technical study evaluating larger production scenarios for Hope Bay.

Agnico Eagle Completes Acquisition of Yamana’s Canadian Assets, Integration Underway

On March 31, 2023, the Company closed the previously announced Yamana Transaction, pursuant to which the Company acquired certain subsidiaries and partnerships which hold Yamana’s interests in its Canadian assets, including the Canadian Malartic complex. As part of the Yamana Transaction, Pan American Silver Corp. acquired all the issued and outstanding common shares of Yamana.

With the closing of the Yamana Transaction, Agnico Eagle now owns 100% of the Canadian Malartic complex, the Wasamac project located in the Abitibi region of Quebec and several other exploration properties located in Ontario and Manitoba. Over the last 18 months, the Company has solidified its presence in the Abitibi gold belt, a region the Company believes has low political risk and high geological potential, and where it has a strong competitive advantage from having operated there for over 50 years. The Company’s production in the Abitibi gold belt is forecast to be between 1.9 million ounces to 2.1 million ounces of gold per year through 2025. In addition, the Company believes it has the unique ability to monetize future mill capacity at the Canadian Malartic complex, given its extensive operations and strategic land position in the region.

The Company’s 2023 production and costs guidance assumed 50% ownership of Canadian Malartic for the first three months of 2023 and 100% ownership for the last nine months of the year, which essentially matches the closing date of the Yamana Transaction. For additional details on the Company’s 2023 guidance, see the Company’s news release dated February 16, 2023.

For additional details with respect to the Yamana Transaction, see the Company’s news releases dated November 4, 2022, November 8, 2022 and March 31, 2023.

Agnico Eagle and Teck Resources Enter Into Joint Venture Agreement in Respect of the San Nicolás Copper-Zinc Project in Mexico

On April 6, 2023, the Company and Teck entered into the previously announced 50/50 joint venture agreement in respect of the San Nicolás copper-zinc development project located in Zacatecas, Mexico.  Under the terms of the agreement, Agnico Eagle subscribed for a 50% interest in Minas de San Nicolás, S.A.P.I. de C.V. (“MSN”), a wholly-owned Mexican subsidiary of Teck, for US$580 million.  Agnico Eagle will contribute the amount as study and development costs are incurred by MSN. For governance purposes, Agnico Eagle is deemed to be a 50% shareholder of MSN from closing, regardless of the number of shares that have been issued to Agnico Eagle or its subsidiaries, except in certain circumstances of default.

MSN is now working to advance permitting and development of the project and is planning to submit an Environmental Impact Assessment and permit application for San Nicolás in 2023 and is targeting completion of a feasibility study in 2024. Agnico Eagle’s funding of MSN in the first two years is expected to be approximately $50 million.

For additional details with respect to the San Nicolás transaction, see the Company and Teck’s joint news releases dated September 16, 2022 and April 6, 2023.

ABITIBI REGION, QUEBEC

Agnico Eagle is Quebec’s largest gold producer with a 100% interest in the LaRonde complex (which includes the LaRonde and LZ5 mines), the Goldex mine and, as of March 31, 2023 following the closing of the Yamana Transaction, the Canadian Malartic complex. These mines are located within 50 kilometres of each other, which provides operating synergies and allows for the sharing of technical expertise.

LaRonde Complex – Strong Underground Productivity Drives Solid Operational Performance in the First Quarter of 2023

The 100% owned LaRonde mine in northwestern Quebec achieved commercial production in 1988. The LZ5 property lies adjacent to and west of the LaRonde mine and previous operators exploited the zone by open pit mining. The LZ5 mine achieved commercial production in June 2018.

___________________________

⁸ Minesite costs per tonne is a non-GAAP measure that does not have a standardized meaning under IFRS.  For a reconciliation to production costs see “Reconciliation of Non-GAAP Performance Measures” below.  See also “Note Regarding Certain Measures of Performance”.

Gold production in the first quarter of 2023 decreased when compared to the prior-year period primarily due to lower gold grades and lower throughput related to changes in the mining sequence at the LaRonde mine (for more information see the news release dated February 16, 2023).

Production costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily as a result of higher unit costs for consumables combined with lower mill throughput levels, partially offset by the timing of unsold concentrate inventory. Production costs per ounce in the first quarter of 2023 increased when compared to the prior-year period primarily due to higher production costs per tonne and lower gold grades, partially offset by a weaker Canadian dollar relative to the U.S. dollar.

Minesite costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to higher unit costs for consumables combined with lower mill throughput levels. Total cash costs per ounce in the first quarter of 2023 increased when compared to the prior-year period primarily due to higher minesite costs per tonne, lower gold grades and lower revenues from by-product sales, partially offset by a weaker Canadian dollar relative to the U.S. dollar.

Operational Highlights

• In 2023, the LaRonde mine is transitioning to pillarless mining and an adjusted development plan to manage seismicity within the mine, resulting in a lower mining rate when compared to the prior year
• The first quarter of 2023 saw higher than expected gold production due to solid underground productivity. The underground development performance at the LaRonde mine exceeded expectations by over 450 metres following delivery of bolting equipment and a training plan implemented in the second half of 2022. Underground development at the LZ5 mine also progressed well and remains on target. Development performance is key to providing operational flexibility in 2023
• The LZ5 processing facility is planned to be idled late in the third quarter of 2023 to take advantage of the approximately 2,000 tpd of excess capacity in the LaRonde mill. In the third quarter of 2023, a seven day shutdown is scheduled at the LaRonde mill and some adjustments will be made to the copper circuit for future processing of Akasaba West copper bearing concentrate

Project Highlights

• Production in the 11-3 Zone at the LaRonde mine is expected to start in the third quarter of 2023 as previously planned. The required breakthrough of ramps and design of the pastefill network is currently in progress. The 11-3 Zone is expected to add additional flexibility in the LaRonde mine production plan

Exploration Highlights

• At LZ5 in the first quarter of 2023, drilling on the Ellison property further confirmed the continuity of Zone 5 gold mineralization to a depth of 950 metres. Highlights include: hole BZ-2022-032, which intersected 3.0 g/t gold over 30.0 metres at 671 metres depth; and hole BZ-2022-028, which intersected 3.7 g/t gold over 10.1 metres at 840 metres depth. Inferred mineral resources are expected to be added at depths between 770 and 950 metres by year-end 2023
• Exploration development activities in 2023 at the LaRonde complex includes the further extension of the exploration drift on level 215 by 1,060 metres to the west to provide drill platforms to test the vertical extensions of known zones on the Bousquet property and below the LZ5 deposit, with drilling expected to begin in the second half of the year

Canadian Malartic Complex – Underground Production Commences at Odyssey; Surface Construction Activities and Underground Development at Odyssey Continue to Progress

In June 2014, each of Agnico Eagle and Yamana acquired a 50% ownership interest in the Canadian Malartic mine.  All volume data in this section reflect the Company’s 50% interest in the Canadian Malartic complex during the quarter, except as otherwise indicated.  The Odyssey underground project was approved for construction in February 2021.  Following closing of the Yamana Transaction on March 31, 2023, the Company now owns a 100% interest in the Canadian Malartic complex.

Gold production in the first quarter of 2023 increased slightly when compared to the prior-year period primarily due to higher gold grades and gold recoveries, mostly offset by lower mill throughput.  As planned, starting in February 2022, the mill throughput levels were reduced to approximately 51,500 tpd (on a 100% basis) in an effort to optimize the production profile and cash flows during the transition to processing ore from the Odyssey underground project.

Production costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to higher mining costs associated with higher fuel prices and maintenance costs.  Production costs per ounce in the first quarter of 2023 increased slightly when compared to the prior-year period primarily for the same reason as the higher production costs per tonne, partially offset by higher gold grades and gold recovery and the weaker Canadian dollar relative to the U.S. dollar.

Minesite costs per tonne in the first quarter of 2023 increased when compared to the prior year period for the same reasons as the increase in production costs per tonne. Total cash costs per ounce in the first quarter of 2023 increased slightly when compared to the prior-year period primarily due to the same reasons as the increase in production costs per ounce.

Operational Highlights

• The Odyssey project achieved a total recordable injury frequency of zero for the quarter
• The first production blast from the Odyssey underground mine occurred in March 2023, with gold production totaling 2,799 ounces mostly from development ore. Processing of production ore is expected to begin in the second quarter of 2023. Overall, development continues to progress well, with greater than planned development performance. Underground development via ramp access has now passed the bottom of the Odyssey South deposit and has reached the level of the first shaft access point
• Mining activities in the Canadian Malartic pit continued to advance as planned and the mining of the Canadian Malartic pit is expected to be completed midway through the second quarter of 2023. Upon depletion of the Canadian Malartic pit, work will be undertaken to prepare for in-pit tailings disposal, which is expected to start in the second half of 2024

Project and Exploration Highlights

• An update on Odyssey project development, construction and exploration highlights is set out in the Update on Key Value Drivers and Pipeline Projects section above

Yamana Transaction

• The Yamana Transaction closed on March 31, 2023. An update on the Yamana Transaction is set out under the caption “Agnico Eagle Completes Acquisition of Yamana’s Canadian Assets, Integration Underway” above

Goldex – Solid Operational Performance Driven by Strong Underground Development Activity and Higher Grades; Akasaba West Progressing as Planned

The 100% owned Goldex mine in northwestern Quebec began production from the M and E zones in September 2013. Commercial production from the Deep 1 Zone commenced on July 1, 2017.  The Company approved the development of the Akasaba West project, located less than 30 kilometres from Goldex, in July 2022.

Gold production in the first quarter of 2023 decreased slightly when compared to the prior-year period primarily due to lower throughput levels as a result of low ore availability in the Deep 1 Zone, partially offset by higher grade and tonnage from the South Zone.

Production costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to lower processed tonnes and the timing of previously unsold concentrate inventory. Production costs per ounce in the first quarter of 2023 increased when compared to the prior-year period primarily for the same reasons as the higher production costs per tonne, partially offset by gold grades and the weaker Canadian dollar relative to the U.S. dollar.

Minesite costs per tonne in the first quarter of 2023 increased when compared to the prior-year period due to higher underground production costs. Total cash costs per ounce in the first quarter of 2023 increased when compared to the prior-year period for the same reasons as the higher minesite costs per tonne, partially offset by higher gold grades and the weaker Canadian dollar relative to the U.S. dollar.

Operational Highlights

• Goldex achieved above-forecast gold production for the first quarter of 2023, due to higher gold grades and development in the South Zone
• The underground development training program for dynamic ground support, implemented in the second half of 2022, has resulted in continuous improvements in underground development and, in the first quarter of 2023, development exceeded the plan by over 400 metres. This success will support the development of production areas in the South Zone and Deep 2 Zone that is planned for 2023
• The health and safety performance at Goldex in the first quarter of 2023 was excellent, with no lost time incidents and no modified work incidents reported

Akasaba West Project

• Work at the Akasaba West project commenced in September 2022 and remained on schedule for overburden removal in the first quarter of 2023, with over 670,000 tonnes of material removed to date. Construction of surface infrastructure is also progressing on schedule, including offices, a garage and water treatment

Exploration Highlights

• Exploration at Goldex during the first quarter of 2023 continued to target the eastern extension of the South Zone in Sector 3, with the objective of converting mineral resources into mineral reserves and extending Sector 3 at depth and to the east below level 140
• Highlights from the conversion drilling in Sector 3 include: hole GD128-083, which intersected 4.7 g/t gold over 10.5 metres at 1,267 metres depth; hole GD128-086, which intersected 4.1 g/t gold over 5.3 metres at 1,233 metres depth and 4.4 g/t gold over 5.5 metres at 1,225 metres depth; hole GD128-109, which intersected 6.0 g/t gold over 12.0 metres at 1,274 metres depth; and hole GD128-111, which intersected 9.8 g/t gold over 15.5 metres at 1,246 metres depth
• Exploration drilling is also ongoing to test the continuity of mineralization to a depth of 2.3 kilometres in the Deep 3 Zone mining zone beneath the current operations in the Deep 2 Zone, with results expected later this year
• Additional exploration drilling during the first quarter of 2023 intersected the W Zone at a relatively shallow depth approximately 200 metres west of the main deposit at Goldex, with an initial result of 1.8 g/t gold over 35.0 metres at 480 metres depth in hole GD27-053 in a mineralized shoot displaying quartz-tourmaline-albite vein mineralization similar to the past-producing MMx Zone at Goldex

ABITIBI REGION, ONTARIO

Agnico Eagle acquired the Detour Lake and Macassa mines on February 8, 2022 as a result of the Merger with Kirkland Lake Gold. With the inclusion of these two assets in its portfolio, the Company is now Ontario’s largest gold producer. Furthermore, the proximity of these mines to the Company’s operations located in the Abitibi region of Quebec is expected to provide future operating synergies and allow for future sharing of technical expertise.

Detour Lake – Achieves Best Ever Winter Mill Performance; Exploration Continues to Infill and Test Western Extensions of Mineralization

The Detour Lake mine is located in northeastern Ontario, approximately 300 kilometres northeast of Timmins and 185 kilometres by road northeast of Cochrane, within the northernmost portion of the Abitibi Greenstone Belt.

In 1987, Placer Dome Inc. began underground gold production at the Detour Lake property and during the initial 12 years of mining (from 1987 to 1999) production was approximately 1.7 million ounces of gold from approximately 14.3 million tonnes grading 3.82 g/t gold.  In 2013, Detour Gold Corporation restarted gold production using open pit mining. The Detour Lake mine is now the largest gold producing mine in Canada with the largest gold reserves and substantial growth potential. It has an estimated mine life of approximately 30 years.

Gold production in the first quarter of 2023 increased when compared to the prior year period reflecting a full quarter of production in 2023 as opposed to 51 days in 2022 following the Merger and higher mill throughput, partially offset by lower gold grades.

Production costs per tonne in the first quarter of 2023 decreased when compared to the prior-year period primarily due to the purchase price allocation to inventory which require it to be realized at fair value in the first quarter of 2022 and the timing of inventory. Production costs per ounce in the first quarter of 2023 decreased when compared to the prior-year period primarily due to the same reasons as outlined above.

Minesite costs per tonne in the first quarter of 2023 increased when compared to the prior-year period due to lower deferred stripping expense. Total cash costs per ounce in the first quarter of 2023 increased when compared to the prior-year period due to different processing volumes as a result of the number of reportable production days, as well as higher mining and milling costs.

Operational Highlights

• In the first quarter of 2023, Detour Lake recorded its strongest quarterly health and safety performance since the restart of operations in 2013
• Detour Lake achieved its best ever first quarter mill performance. Historically, the Detour Lake mine processes lower volumes of ore in winter months as a result of cold temperatures and their effect on material handling. First quarter results are as expected with respect to the mine growth strategy as the operation continues to optimize processes to further increase milling rates and to adapt its plant maintenance strategy to account for the higher tonnage processed
• In the first quarter of 2023, the mining sequence was adjusted due to the interaction with nearby old underground mine workings resulting in a delay in reaching high grade ore in Phase 2
• During the quarter, the mine continued to ramp up production with the commissioning of four higher capacity haul trucks (CAT 798 trucks). Two additional units are planned to be commissioned in the second quarter

Project and Exploration Highlights

• An update on the multiple initiatives to increase mill throughput to 28.0 Mtpa by 2025, potential expansion scenarios and exploration highlights is set out under the caption “Update on Key Value Drivers and Pipeline Projects” above

Macassa – Six Millionth Gold Ounce Poured; Strong Operational and Cost Performance from Continued Productivity Improvements; Commissioning Complete on Shaft #4

The Macassa mine, located in northeastern Ontario, began production in 1933.  Operations have been continuous except from 1999 to 2002 when they were suspended due to low gold prices.  Underground mining restarted in 2002 and has been predominantly focused on production from two areas: the South Mine complex and the Main Break.

Gold production in the first quarter of 2023 increased when compared to the prior year period reflecting a full quarter of production in 2023 as opposed to the 51 days in 2022 following the Merger and higher gold grades and higher mill throughput in the first quarter of 2023.

Production costs per tonne in the first quarter of 2023 decreased when compared to the prior-year period primarily due to the purchase price allocation to inventory which required it to be realized at fair value in the first quarter of 2022 and the timing of inventory. Production costs per ounce in the first quarter of 2023 decreased when compared to the prior-year period primarily due to the same reasons as outlined above and higher gold grades.

Minesite costs per tonne in the first quarter of 2023 increased when compared to the prior-year period due to higher mining and administration costs. Total cash costs per ounce in the first quarter of 2023 decreased when compared to the prior-year period due to higher gold grades, partially offset by higher mining and administration costs.

Operational Highlights

• In January 2023, Macassa celebrated its six millionth ounce of gold poured since 1933 when mining first began on the property
• The Macassa mine continued to build on productivity gains achieved throughout 2022, supported by improved ventilation, a better adherence to the mining plan, improved maintenance processes and the commissioning of shaft #4
• In the first quarter of 2023, the Macassa mine achieved its second best quarterly health and safety performance since the restart of operations in 2002, with its best performance recorded in the fourth quarter of 2022

Project Highlights

• The Shaft #4 production hoist was commissioned in the first quarter of 2023. Development work to connect the new shaft infrastructure to the existing mining areas and construction of the conveyor loadout station, rock breakers and loading pocket were also completed during the quarter. These projects are expected to significantly improve underground material handling going forward
• The upgrade of the ventilation system progressed as planned. In the first quarter of 2023, one of the two 3,000 horsepower fans was commissioned and the second fan is expected to be commissioned in the second quarter of 2023

Exploration Highlights

• Exploration drilling at Macassa during the first quarter of 2023 was highlighted by hole 58-794 in the SMC East Zone, which intersected 26.6 g/t gold over 1.9 metres at 1,695 metres depth approximately 55 metres east of current mineral resources and hole 53-4699, which intersected 14.6 g/t gold over 1.9 metres at 2,039 metres depth in the Lower Main Break Zone approximately 500 metres east of the current Lower Main Break mineral resource

NUNAVUT

Agnico Eagle considers Nunavut a politically attractive and stable jurisdiction with enormous geological potential.  With the Company’s Meliadine mine and Meadowbank complex (which includes the Amaruq satellite deposit), together with the Hope Bay project and other exploration projects, Nunavut has the potential to be a strategic operating platform for the Company with the ability to generate strong gold production and cash flows over several decades.

Meliadine Mine – Record Mill Availability Drives Second Consecutive Quarter of Record Mill Throughput

Located near Rankin Inlet in the Kivalliq District of Nunavut, Canada, the Meliadine project was acquired in July 2010. The Company owns 100% of the 98,222-hectare property. In February 2017, the Company’s Board of Directors approved the construction of the Meliadine project and commercial production was declared on May 14, 2019.

Gold production in the first quarter of 2023 increased when compared to the prior-year period primarily due to higher mill throughput levels resulting from higher tonnes mined from the open pit.

Production costs per tonne in the first quarter of 2023 decreased slightly when compared to the prior-year period due a higher mining rate resulting in a favourable stockpile inventory adjustment and higher deferred stripping expense, partially offset by higher costs associated with additional volumes mined from the open pit and higher maintenance costs relating to cost pressures on workforce and transportation. Production costs per ounce in the first quarter of 2023 decreased when compared to the prior-year period as a result of the weaker Canadian dollar relative to the U.S. dollar and higher gold grades.

Minesite costs per tonne in the first quarter of 2023 decreased slightly when compared to the prior-year period primarily due to the same reasons that resulted in lower production costs per tonne. Total cash costs per ounce in the first quarter of 2023 decreased when compared to the prior-year period due to the same reasons that resulted in the lower production costs per ounce.

Operational Highlights

• Despite extreme cold weather impeding outdoor activities for several days in the first quarter of 2023, Meliadine exceeded its targets with regards to ore hauling and total material moved from the open pit as a result of the accelerated mining sequence in the quarter
• In the underground mine, Meliadine achieved good performance in lateral development. A milestone was achieved in the first quarter with modifications made to ramp #1, which will allow for better maneuverability and for payloads to be increased when hauling from this ramp, allowing for more operational flexibility
• Meliadine achieved record quarterly mill throughput in the first quarter of 2023 as a result of record mill availability. However, lower than planned gold grades from underground stopes on the edges of the mineralized zones with higher complexity resulted in slightly lower than forecast gold production
• Meliadine received certification under the International Cyanide Management Code for cyanide transportation during the first quarter of 2023.

Project Highlights

• The Phase 2 mill expansion is expected to be completed in mid-2024 and the processing rate ramp-up is expected to increase throughput to achieve 6,000 tpd by year-end 2024. Cold weather affected productivity with minor delays in the outdoor construction of the carbon-in-leach and filter press building. Construction activities continued to progress on the power plant, secondary grinding building and the second underground mine air intake
• Terms of Reference were completed between parties from the Terrestrial Advisory Group, allowing the start of construction for the future waterline

Exploration Highlights

• Exploration drilling during the first quarter at Meliadine totaled 74 holes (18,480 metres) and targeted the vertical extensions of mineralized zones in the central part of the Tiriganiaq and Wesmeg deposits. The drilling was carried out from both surface and the new exploration ramp that provides a platform at approximately 460 metres depth and extends deeper towards the west. The ramp permits the efficient testing of the deposit along the plunge of the ore body below 700 metres depth, which has been the lower limit of surface drilling at Tiriganiaq historically
• At Tiriganiaq, a recent intercept in hole ML425-9740-D5 yielded 17.2 g/t gold over 4.9 metres at 770 metres depth and drill hole ML425-9740-D36 yielded 7.5 g/t gold over 8.0 metres at 893 metres depth, which represents the deepest intercept to date on the property
• At Wesmeg, drilling in the eastern part of the deposit continues to return wide, high-grade intersections, with recent highlights including 8.9 g/t gold over 7.0 metres at 532 metres depth in hole ML400-10200-D10
• The recent gold mineralized intersections drilled at the Tiriganiaq and Wesmeg deposits are up to approximately 250 metres and 100 metres, respectively, below the current mineral resource envelope and the Company anticipates they will have a positive impact on the mineral resource update at year-end
• Recent results in the eastern and vertical extensions of both the Tiriganiaq and Wesmeg deposits suggest that the exploration ramp should be extended towards these areas of mineralization that present good potential for the addition of mineral resources with further exploration drilling
• Selected recent exploration drill intercepts from the Tiriganiaq and Wesmeg deposits at the Meliadine property are set out in a table in the Appendix and in the plan map and composite longitudinal section below

[Meliadine Mine – Plan Map & Composite Longitudinal Section]

Meadowbank Complex – Solid Gold Production From Higher Open Pit Grades and Contribution from Amaruq Underground

The 100% owned Meadowbank complex is located approximately 110 kilometres by road north of Baker Lake in the Kivalliq District of Nunavut, Canada. The complex consists of the Meadowbank mine and mill and the Amaruq satellite deposit, which is located 50 kilometres northwest of the Meadowbank mine. The Meadowbank mine achieved commercial production in March 2010, and mining activities at the site were completed by the fourth quarter of 2019.

The Amaruq mining operation uses the infrastructure at the Meadowbank minesite as well as additional infrastructure built at the Amaruq site. Amaruq ore is transported using long haul off-road type trucks to the mill at the Meadowbank site for processing. The Amaruq satellite deposit achieved commercial production on September 30, 2019.

Gold production in the first quarter of 2023 increased when compared to the prior-year period primarily due to higher gold grades from the Whale Tail and IVR open pits and Amaruq underground and higher mill throughput from the addition of underground mining.

Production costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to the start of underground mining at Amaruq, the timing of inventory sales and higher fuel costs from higher fuel prices and higher consumption, partially offset by favourable deferred stripping and inventory adjustments. Production costs per ounce in the first quarter of 2023 decreased when compared to the prior-year period due to higher gold grades and the weaker Canadian dollar relative to the U.S. dollar, partially offset by the timing of inventory sales and the reasons set out above that resulted in higher production costs per tonne.

Minesite costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to the start of underground mining at Amaruq underground and higher mining and milling costs related to higher fuel and consumables costs, partially offset by favourable deferred stripping and inventory adjustments. Total cash costs per ounce in the first quarter of 2023 decreased when compared to the prior-year period due to higher gold grades and the weaker Canadian dollar relative to the U.S. dollar, partially offset by the reasons set out above that resulted in higher minesite costs per tonne.

Operational Highlights

• In the first quarter of 2023, Meadowbank recorded its best global combined injury frequency rate since 2016
• Mill throughput was lower than planned for the quarter resulting from lower than planned availability of the SAG mill. The team continues to advance optimization efforts in the process plant, with an upward trend in the utilization of the high pressure grinding rolls and with a tenth leach tank commissioned in February with positive initial results
• Underground development also continues to ramp up and, while lower than planned for the first quarter of 2023, the team achieved record performance in March with 420 metres of advance
• The Company is currently performing upgrades to the recently commissioned cemented rockfill plant to improve productivity and reliability. A temporary mobile system continues to be used during the upgrades, with the cemented rockfill plant expected to restart midway through the second quarter of 2023

Exploration Highlights

• Drilling at Amaruq continued during the first quarter of 2023 at the Whale Tail deposit with two objectives: to assess the potential to integrate additional underground stopes in the south western and north eastern portions of the Whale Tail deposit to extend mine life; and to assess the potential to eventually push back the Whale Tail pit to the southwest and further extend the life of the open pit operations
• Recent highlights from the drilling of underground targets include: hole AMQ22-2881, which intersected 7.6 g/t gold over 4.2 metres at 177 metres depth outside the current mineral reserves in the southwestern extension of the Whale Tail deposit; hole AMQ22-2919, which intersected 12.2 g/t gold over 2.5 metres at 453 metres depth outside the current mineral reserves in the northeastern depth extension of the Whale Tail deposit; and 5.5 g/t gold over 9.0 metres at 485 metres depth in hole AMQ-350-006 approximately 100 metres beneath current mineral reserves, suggesting the potential for further extension of underground operations
• Highlights from the shallow drilling approximately 150 to 300 metres southwest of the current Whale Tail pit outline include: 5.1 g/t gold over 11.2 metres at 90 metres depth in hole AMQ22-2911; and 3.8 g/t gold over 10.0 metres at 157 metres depth in hole AMQ22-2895

Hope Bay Project – Drilling Activities Continued in the First Quarter of 2023; Larger Production Scenarios Continue to be Evaluated

Located in the Kitikmeot District of Nunavut, Canada, approximately 125 kilometres southwest of Cambridge Bay, the Hope Bay project was acquired in February 2021. The Company owns 100% of the 191,342-hectare property, which includes portions of the Hope Bay and Elu greenstone belts. The 80-kilometre long Hope Bay greenstone belt hosts three gold deposits (Doris, Madrid and Boston) with mineral reserves and mineral resources and over 90 regional exploration targets. At the time the Hope Bay project was acquired, construction at the Doris deposit was complete and commercial production had been achieved in the second quarter of 2017.

On February 18, 2022, the Company announced that it decided to maintain the suspension of production activities at the Doris mine in order to dedicate the infrastructure of the Hope Bay site to exploration activities. In conjunction with the exploration activities, the Company continues to evaluate the potential for a larger production scenario (targeting 350,000 to 400,000 ounces of gold per year).

An update on exploration carried out in the fourth quarter of 2022 is set out under the caption “Update on Key Value Drivers and Project Pipeline” above.

AUSTRALIA

Agnico Eagle acquired the Fosterville mine on February 8, 2022 as a result of the Merger.  Fosterville is a 100% owned, high-grade underground gold mine, located 20 kilometres from the city of Bendigo, and is the largest gold mine in the state of Victoria, Australia.  The operation features low-cost gold production, as well as extensive in-mine and district scale exploration potential.

Fosterville – Four Millionth Gold Ounce Poured and Solid Production in the First Quarter of 2023

Gold production at the Fosterville mine commenced in 1991 from shallow oxide open pits and heap-leaching operations and was suspended in 2001 subsequent to the depletion of oxide ore.  In 2005, gold production restarted as an open pit, sulphide mining operation, with mining activities transitioning to underground.  Based on exploration success, in particular the discovery of the high grade Eagle and Swan mineralized zones, the Fosterville mine output increased rapidly year over year from 2016 to 2020.  The deposit remains open at depth in the Harrier, Lower Phoenix and Robbins Hill areas.

Gold production in the first quarter of 2023 increased when compared to the prior-year period reflecting a full quarter of production in 2023 as opposed to the 51 days in 2022 following the Merger, partially offset by lower gold grades and lower mill throughput.

Production costs per tonne in the first quarter of 2023 decreased when compared to the prior-year period primarily due to the purchase price allocation to inventory which required it to be realized at fair value in the first quarter of 2022 and the timing of inventory adjustments.  Production costs per ounce in the first quarter of 2023 decreased when compared to the prior-year period for the same reasons that resulted in lower production costs per tonne, partially offset by lower gold grades.

Minesite costs per tonne in the first quarter of 2023 decreased when compared to the prior-year period primarily due to the timing of inventory adjustments.  Total cash costs per ounce in the first quarter of 2023 increased when compared to the prior-year period due to lower gold grades.

Operational Highlights

• In March 2023, Fosterville achieved a production milestone pouring its four millionth ounce of gold since the beginning of the sulphide project in 2005
• Production continues to be affected by primary ventilation operating restrictions related to low frequency noise constraints. The Company continued to adjust the mining sequence to partially offset production impacts and was able to deliver a solid production quarter despite the restrictions
• Abatement works for the low frequency noise were completed in the first quarter of 2023 and an eight week trial of various fan speeds was conducted in conjunction with the State of Victoria Environmental Protection Authority (“EPA”). The Company believes the results were promising and they are now being considered by the EPA with respect to the current prohibition notice
• In the first quarter of 2023, the Fosterville mine rescue team provided emergency response to a neighbouring mine

Project Highlights

• In the first quarter of 2023, work continued on the raise of the flotation tailings storage facility which is now more than 90% complete. The raise is expected to provide an additional 17 months of tailings storage capacity and be completed in the second quarter of 2023

Exploration Highlights

• Exploration drilling resumed at the end of the first quarter of 2023 in the Lower Phoenix/Swan zone at the Fosterville mine following the 3912 Drill Drive extension in mid-March. The drilling is also targeting the Cardinal structure in the hanging wall of the Swan Zone, with results pending
• Infill drilling in the first quarter into the Cygnet Zone, parallel to the Swan Zone, yielded highlights of 9.8 g/t gold over 1.9 metres at 1,478 metres depth in hole UDH4553 and 16.6 g/t gold over 1.8 metres at 1,377 metres depth in hole UDH4646
• At Robbins Hill, exploration drilling into the Curie Fault Zone yielded good results up to 100 metres outside of the current mineral resources, including a highlight of 13.2 g/t gold over 4.2 metres at 779 metres depth in hole UDH4479
• Further investigation during the first quarter of the newly discovered Wu splay structure in the hanging wall of Curie Fault yielded a highlight of 8.1 g/t over 7.0 metres at 938 metres depth in the middle of the structure, which has been traced over approximately 300 metres in length

FINLAND

Agnico Eagle’s Kittila mine in Finland is the largest primary gold producer in Europe.  An underground shaft is expected to be commissioned in the first half of 2023.  Exploration activities continue to expand the mineral reserves and mineral resources at the Kittila mine.  Near mine exploration remains the main focus as the deposit remains open at depth and laterally.

Kittila – Achieves Second Highest Quarterly Gold Production; Expansion Projects Progressing Well in Commissioning Phase

The 100% owned Kittila mine in northern Finland achieved commercial production in 2009.

Gold production in the first quarter of 2023 increased when compared to the prior-year period as a result of higher gold grades and higher mill throughput.  Gold grades were significantly lower in the first quarter of 2022 as a result of delays in reaching higher grade stopes in the Roura Zone due to unfavourable ground conditions.

Production costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to higher mill costs resulting from higher unit costs for electricity and reagents, partially offset by the timing of unsold inventory.  Production costs per ounce in the first quarter of 2023 decreased when compared to the prior-year period due to higher gold grades and the timing of unsold inventory, partially offset by the reasons that resulted in higher production costs per tonne.

Minesite costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to higher mill costs resulting from higher unit costs for electricity and reagents.  Total cash costs per ounce in the first quarter of 2023 decreased when compared to the prior-year period due to higher gold grades and a weaker Euro against the U.S. dollar, partially offset by the reasons that resulted in higher minesite costs per tonne.

Operational Highlights

• In the first quarter of 2023, Kittila achieved its second highest quarterly gold production supported by higher than expected gold grades, record quarterly underground production and good mill throughput
• In the first quarter of 2023, electricity spot prices continued to remain almost double the typical electricity price despite the commissioning of a nuclear power plant in Finland during the quarter. The long-term impact of the new nuclear power plant on the Company’s electricity expenses is unknown. In general, inflation in Finland continues to remain more challenging than in the Company’s other operating regions
• At the end of the first quarter of 2023, the Company signed an agreement for clean electricity which ensures that 100% of the electricity consumed at the minesite is produced by wind or nuclear power. At an approximate additional annual cost of less than 150,000 Euros, Kittila is taking a step towards reducing greenhouse gas emissions and combating climate change
• The Company expects to host the Supreme Administrative Court of Finland (the “SAC”) for a site visit in the second quarter of 2023 as part of the review of the permit limitation (described below). The Company expects a final decision from the SAC in the second half of 2023. Until then, the Company continues to rely on the current mining permit of 1.6 Mtpa while maintaining operational flexibility to reach the 2.0 Mtpa volume in the event of a positive decision by the SAC

Project Highlights

• Initial rock hoisting from the shaft commenced at the end of the first quarter of 2023. The focus for the second quarter will be on ramping up the hoist capacity with performance test trials and the service hoist commissioning. The shaft project is expected to be completed in the third quarter of 2023
• The nitrogen removal plant was commissioned in the first quarter of 2023 and is performing well. Total nitrogen reduction is close to 80% and ahead of expectations and the team will now focus on process optimization
• The main underground level is progressing well, with civil works and installations advancing according to plan. The final work and handover to the operational team is underway, with the project expected to be completed by the end of the second quarter of 2023

Exploration Highlights

• Exploration drilling during the first quarter of 2023 at Kittila totaled 32 holes (8,962 metres) and targeted the northern and southern portions of the deposit at approximately 1.0 kilometre depth, including areas to the north beyond the current mineral resources. Conversion drilling during the first quarter at Kittila totaled 12 holes (4,038 metres) and targeted the Main and Sisar zones in the Suuri, Roura and Rimpi areas
• To the north, highlights in the Main Zone include exploration hole RIE23-604, which intersected 5.0 g/t gold over 9.2 metres at 1,141 metres depth and conversion hole VUG22-534, which intersected 4.2 g/t gold over 8.3 metres at 1,145 metres depth, with the two intercepts extending the Main Zone by approximately 130 metres down-plunge and further north in the Rimpi area. Approximately 500 metres to the south, exploration hole RIE22-609 intersected 5.0 g/t gold over 4.9 metres at 1,199 metres depth, extending the Sisar Zone mineralization down-plunge in the Rimpi area
• To the south, exploration hole SUU22-622 intersected 5.6 g/t gold over 6.4 metres at 1,023 metres depth, confirming gold mineralization in the southern portion of the Sisar Zone within the Suuri area and demonstrating the good potential for further exploration success at shallow depths in the Suuri area
• Selected recent drill results from Kittila are set out in the table in the Appendix and in the composite longitudinal section below

[Kittila Mine – Composite Longitudinal Section]

Permitting

• In 2020, the Regional State Administrative Agency of Northern Finland granted the mine’s owner, Agnico Eagle Finland Oy (“Agnico Finland”), environmental and water permits that allowed Agnico Finland to enlarge the second carbon-in-leach (“CIL2”) tailings storage facility, expand the operations of the Kittila mine to 2.0 Mtpa and build a new discharge waterline. The permits were subsequently appealed by a third party to the Vaasa Administrative Court in Finland. The appeals were granted, in part, in July 2022, with the result that the permits were returned for reconsideration by the Regional State Administrative Agency of Northern Finland
• In August 2022, the Company appealed the decisions of the Vaasa Administrative Court to the Supreme Administrative Court of Finland (the “SAC”) and requested that the SAC restore the permits through an interim decision pending the ultimate result of Agnico Finland’s appeal
• On November 1, 2022, the SAC issued an interim decision upholding the initial CIL2 tailings storage facility permit and restoring nitrogen emission level permits in 2022, ensuring the Company’s environmental compliance with regards to nitrogen emissions. However, the SAC interim decision did not uphold the expansion of the mine to 2.0 Mtpa and the Vaasa Administrative Court decision is valid until a final decision is issued by the SAC
• The Company expects to host the SAC for a site visit in the second quarter of 2023 as part of the review of the permit limitation. The Company expects a final decision from the SAC in the second half of 2023. Until then, the Company continues to rely on the current mining permit of 1.6 Mtpa while maintaining operational flexibility to reach the 2.0 Mtpa volume in the event of a positive decision by the SAC
• If the SAC does not reinstate Agnico Finland’s right to operate at, or close to, 2.0 Mtpa, the Company intends to submit an updated permit application for 2.0 Mtpa output level or higher

MEXICO

Agnico Eagle’s Mexican operations have been a solid source of precious metals production (gold and silver) with strong free cash flow generation since 2009.

Pinos Altos – Production and Development In Line With Plan; Exploration Testing the Area Between the Santo Nino and Oberon de Weber Deposits

The 100% owned Pinos Altos mine in northern Mexico achieved commercial production in November 2009.

Gold production in the first quarter of 2023 decreased when compared to the prior-year period primarily due to lower throughput levels resulting from lower underground productivity related to lower stope availability at the Santo Niño and Cerro Colorado zones.

Production costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to higher mining and milling costs, partially offset by higher deferred stripping and a favourable stockpile adjustment.  Production costs per ounce in the first quarter of 2023 increased when compared to the prior-year period due to the reasons set out above for the increase in production costs per tonne described above.

Minesite costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to the same reasons for the increase in the production costs per tonne.  Total cash costs per ounce in the first quarter of 2023 increased when compared to the prior-year period due to the reasons set out for the higher production costs per tonne above and lower by-product revenues from lower silver sales, partially offset by higher gold grades.

Operational Highlights

• In the third quarter of 2022, the company modified the mining sequence and rate to reflect current conditions and developed a plan to enhance mining recovery and minimize dilution. These measures led to an improvement in development and production rates throughout the fourth quarter of 2022 and first quarter of 2023, resulting in the underground mine exceeding targets for ore, waste and development metres during the first quarter of 2023
• In the Reyna de Plata open pit, both ore production and gold grades exceeded targets in the first quarter of 2023

Project Highlights

• In the fourth quarter of 2022, pre-construction activities at the Cubiro deposit were paused. Additional exploration and definition drilling is planned for 2023 to better define the high grade ore shoot for future production and optimize the mine design and sequence. Initial production is expected in the second half of 2024. Once production commences, Cubiro is expected to provide additional production flexibility to the Pinos Altos operations

Exploration Highlights

• In addition to the resumption of exploration drilling at Cubiro, the exploration program at Pinos Altos in 2023 is focused on testing the area between the Santo Nino and Oberon de Weber deposits as well as the depth potential of the Cerro Colorado and Reyna East deposits and other targets on the property

La India – Production in Line With Targets in the First Quarter of 2023; Work Underway to Reduce Cyanide Consumption and Improve Leach Kinetics

The 100% owned La India mine in Sonora, Mexico, located approximately 70 kilometres northwest of the Company’s Pinos Altos mine, achieved commercial production in February 2014.

Gold production in the first quarter of 2023 decreased when compared to the prior-year period as a result of fewer tonnes placed on the heap leach, partially offset by higher recovery.

Production costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to higher heap leach production costs resulting from fewer tonnes placed on the heap leach and higher open pit production costs resulting from a higher strip ratio with the transition from the Main pit to the El Realito pit.  Production costs per ounce in the first quarter of 2023 increased when compared to the prior-year period due to the same reasons outlined above, partially offset by higher gold grades.

Minesite costs per tonne in the first quarter of 2023 increased when compared to the prior-year period primarily due to the reasons described above.  Total cash costs per ounce in the first quarter of 2023 increased when compared to the prior-year period due to the same reasons as the higher production costs per ounce.

Operational Highlights

• The first quarter of 2023 saw good production rates in both ore and waste tonnes, with grades higher than target
• Changes are underway to the heap leach bench heights in order to reduce cyanide consumption and potentially improve leach kinetics
• Open pit mining and crusher operations are expected to be concluded in the fourth quarter of 2023

Exploration Highlights

• Investigation for additional sulphide mineralization is ongoing with a plan to drill approximately 4,000 metres in 2023 at the Chipriona polymetallic sulphide deposit to test potential lateral extensions and parallel structures at open pit depths

About Agnico Eagle

Agnico Eagle is a senior Canadian gold mining company, producing precious metals from operations in Canada, Australia, Finland and Mexico.  It has a pipeline of high-quality exploration and development projects in these countries as well as in the United States.  Agnico Eagle is a partner of choice within the mining industry, recognized globally for its leading environmental, social and governance practices.  The Company was founded in 1957 and has consistently created value for its shareholders, declaring a cash dividend every year since 1983.