Ladies and gentlemen, thank you for standing by. Welcome to the Agnico-Eagle Mines Second Quarter 2006 Financial Results Conference Call. [Operator Instructions]. I would like to remind everyone that this conference call is being recorded on Thursday, July 27, 2006, at 11:00 AM Eastern Time. I will now turn the conference over to Mr. Sean Boyd, Chief Executive Officer. Please go ahead sir.

Thank you, operator and good morning, everyone and thank you for joining our Second Quarter Conference Call. With us here in Toronto, was our full senior management team who will be available to answer your questions at the end of the formal part of the presentation. For those of you who are not logged in on our website we are conducting the call using a series of slides which you an access on agnico-eagle.com. As you know after reading the press release and seeing the results Agnico-Eagle continues a study progress towards a multi-mine gold production base which is backed up by continued record operating and financial performance, in fact the second quarter was our strongest quarter in the history of the company from the perspective of our ability to generate cash. As moving forward on the safe harbor statements, understand there is two of them there. As we move through those we will deal with the corporate strategy, our strategy is been very consistent we certainly recognize a couple of years ago that we needed to branch out from LaRonde and become a multi-mine company we’ve had a definite strategy to do that. And we continue on track to reach our objectives of tripling our gold production by 2009 to 750,000 ounces. We will continue to grow our resource as you know we already have a strong base of 10.4 million ounces with an additional 5 million ounces in gold resource which is subject to some aggressive drilling programs particularly in Mexico and in Finland and I am going to talk about those as we continue to explore those properties and look to add to our already strong reserve position. Our balance sheet was strengthen in the quarter with our equity issue but also we were net cash flow…

Thank you. [Operator Instructions]. The first question comes from John Bridges with JPMorgan. Please go ahead.

Congratulations on the numbers, are you struggle little bit to actually get to what clean number there, there is so much going on in there, I see you got some pretty fancy reported realize process things like that. I wonder if you could sort of just walk us through some of the unusual elements of the quarter?

Hi John, its Dave.

Hi, Dave.

There are couple of things that I would consider non-recurring one of which was the foreign currency translation loss which arises from the consolidation of a subsidiaries in our, I should say the entities in Canada and in Europe that what we have the large deferred tax liabilities and have to be translated at the current rate every quarter, so you are going to have movements in that every quarter and that’s would cause that. The other non-recurring item is the zinc derivative loss, the other items I appreciate you say that they are large. I don’t think they are non-recurring those the settlement gains and market-to-market gains on our inventories. Those will be recurring and they have been recurring since really we have been producing concentrates of LaRonde and that arises because we have to invoice whatever the current price is and then at the end of the quarter we have to mark-the-market the inventories using the 30 day average at the end of the quarter plus we have settlement gains versus what the inventories were previously recorded at when we have final settlement. So with that sort of thing I would consider part of the business and non-recurring, I don’t consider that unusual items at all.

Right, do you get a number for that, I try to (indiscernible).

Yeah I would say its spoke about between mark to market and final settlement gains probably about 20 million in the quarter.

Okay. Anyway congratulations again. It was very strong.

Thank you.

Your next question comes from Michael Fowler with Desjardins Securities. Please go ahead.

Good morning just, on can you -- I think – I guess can you sort of comment on the rock mechanics of all of the various projects there even what you’ve been finding recently?

Oh I think I will start will LaRonde II which is probably the biggest project, I would think from a rock mechanical point of view we really haven’t had any significant issues, what excites me is what sort of -- helps me be positive about LaRonde II as I look at some of our deepest mining levels down to level 224 below the bottom of the penta (ph) shaft and our budget for the year-to-date was 7% dilution and we are currently averaging around 5%. So we are really not having any ground issues also with respect to development, the large part of the development is in the lower part of the mine and as we’ve mentioned we are about 700 meters ahead of schedule and a lot of that development is in the deeper horizons of the mine. So I think from a geomechanical point of view, the fact that our dilution has declined that our development has accelerated, that boards very well for LaRonde II in terms of lap up with our under ground development that we did whereby we exposed the ore, where we drilled it off we were pleased to find that there were no major false or discontinuities that would break or disjoint the vein structure, it was very continuous very vertical, it’s in the shear zone, so we got the answer so that we wanted from Lapa. Goldex we did some recent stress measurements just to be able to confirm our geomechanical studies of this large envelope that we hope to extract and the figures came back better than what we had anticipated. So that should be a plus with respect to dilution going forward at Goldex or it should be better than we incorporated in our financial model based on hard data obtained from the mining horizon at Goldex. Suurikuusikko the more we build it up or keep that rather the more we drilled it off we had originally, we were a bit concerned about some of the disjointive nature of the, echelon structure of the mineralized zones within the larger shear zone but the more we drilled it up, the more we’ve been able to interpret, but the zones are in fact a lot more continues that we had originally anticipated 2, 3 years ago, So from a mining point of view the ore body looks a lot more continues on the hanging wall and footwall the rocks that we seen from core so far, that goes well for mining conditions from Kittila as well.

Okay, so bottom line good news.

I would say so.

Okay just Sean or David, just in terms of just to confirm I guess at the end of the issue, you will not forward so any of your zinc going forward, is that correct?

Yeah that position expires at the end of the December of this year and we are currently not looking at any derivate mechanisms, we have looked at them prior to deciding and doing an equity issue we were looking at port structures, which were prohibitively expensive.

Okay, thanks very much.

Thank you.

Your next question comes from Mark Smith with Dundee Securities. Please go ahead.

Yeah hi, two quick question I guess it goes for David, the 35 million in exploration expenditures for 2006, what portion of that is expense versus Lapa?

That’s all expenses, the reason its going up so much is because we’ve added the Pinos Altos program which is 23 million.

Okay.

That has to be expense till we deliver back with these ability study.

Okay gotcha, and next question and perhaps I don’t know if you can answer this or now, what portion of the Q2 sales are pending Q3 settlement?

Well if you look at the matters of settlement balance on the balance sheet is just under $100 million, so essentially about a quarter by year sales at anyone time are outstanding and where these final settlement.

Okay, so is it something around 12% to 15% of Q2?

I would say in fact, virtually 100% of Q2 is outstanding because concentrates typically take 3 to 4 months for final settlement. So virtually everything you produce in the current quarter settles in the future quarter.

You know, the best way to deal with this were trying to get the numbers as to we use the Q2 production numbers and then allocate Q3 prices and then have the difference between them.

Yeah, whatever your assumptions are, yeah, I mean, I guess that will be a quick and early way to do it.

All right thanks a lot David.

You’re welcome.

You’re next question comes from Chantal Gosselin with Genuity Capital. Please go ahead.

Hi, good morning. My first question is relating to LaRonde II. Ebe, you mentioned that you started the bulletining for the wins and that very little ways to be hoisted [to surface. I know you only have a couple of month now started, but do you see that continuing in the second half of 2006. And what would you expect for 2007 in terms tonnage you are seeing. Anticipate any little impact from that development on your production.

Well, the benefit with LaRonde II are the current development that we have ongoing on level 206 and 215. So a lot of this, we are mining below those horizons Chantal from level 224 ups. So a lot of that gets recycled into that, into those strobes. Also going forward we do have a mid shaft dump in the penta shaft, so we do not have to, even if we do have to hoist it, we do not have to hoist at the surface, it gets dumped into the whole backflow system. And in terms of the actual quantities of waste expected, we’re going to be most of the rock work for the hoist rooms and ramps etc., have that completed probably by the middle of the next year. So, I don’t have the exact figure, Daniel, do you the figure of total waste.

No.

But I think in terms of what we are generating, it isn’t an issue like, I know the issue you are thinking about is being bottlenecked at the bottom of the shaft. But that’s why we had two levels, 206, 215 and while we install the mid shaft dump, because we expected this might be an issue, so that’s how we dealt with it.

So you don’t anticipate any negative impact on your…

No we don’t, that’s the last thing we would want and that’s how we’ve accommodated the situation.

Okay. My second question is more general, maybe for Sean. You’ve grown the company from one mine to five mine I guess in a very little period of time. What’s your vision going forward, do you want to have a certain target size for the company or you want to focus on capitalizing on your current asset and price consolidate in those same district?

We don’t have a magic ounce target for the company. I think our focus is more on maximizing our asset basis in the districts we’re currently operating in so we would deal our, sort of areas of operation being obviously North America including Mexico and Europe. So we would certainly be trying to maximize that. We’re in a position now, where we know the industry is consolidating, we feel no pressure to have to do something, we’re currently not actively working on anything, but we continue to look as part of our normal corporate development activities. So we will take a very discipline approach to growth like we have over the last couple of years. So even when we were feeling somewhat pressure to expand beyond LaRonde, I think we still maintained a very discipline approach to what we do, and we’ll just continue to take that approach going forward.

Thank you.

Your next question comes from Chris Potter with Northern Border Investment. Please go ahead.

Hi, if you look at the forward gold price say at December of 2009 and currently about $750 which is about the time you think you’re going to reproducing about three times as much gold as you currently are? Have you guys look there what your cash flow per share might be at $750 and say in our run rate of 750 and a 1000 ounces a year?

No, we haven’t forecast that you can plug in your sort of own assumptions based on our, we provided a fair amount of information on our production profile. We provided a fair amount of information in detail on the expected cash cost associated with each project, but you would also have to make some assumptions on byproduct pricing as it relates to LaRonde because that also has an impact on cash flow. So, that the debt is there and we’re not going to get into projecting sort of cash flows at 750 gold, obviously with that type of growth, with that growth biased towards gold and a 750 gold price given our anticipated cost structure on a per ounce basis we should be generating very, very meaningful cash flows and that’s certainly a big part of our strategy to be in a position to do that.

Thank guys.

Right.

Your next question comes from Steve Butler from Canaccord Adams. Please go ahead.

Guys just a quick question on Lapa in June when you updated the Lapa reserve, do you actually increase the grade but the ounces fell just slightly from I think 1.17 down to 1.1 million ounces. Can you just elaborate, as you know the grade went up but obviously the tons fell perhaps where did you lose in tonnage there and will there be synopsizes on underground exploration drilling that Lapa issue or do you really wait for later when things are more fully built there? Thanks.

Okay Steve, that’s a very simple answer, in the original interpretation on the western end of the deposit we had originally thought that we would be able to mine transverse, there were two parallel vein structures and we thought we could lump the two together in mine transverse. So as a result of that in the mining plan there was internal dilution and that have the impact of reducing the grade so when we drifted along the vein structure and we intersected both of them we came to the conclusion that it would be too dilutive. So as a result in the new reserve estimate we took out that in the internal dilution and we would mine both of these zones using longitudinal method, so it had the impact of reducing tonnage and then of course some of the ounces associated with it. And so by being more selective the grade went up to over 10 grams.

Okay, is there also an impact there in terms of the sampling you did on the 28 or 25,00 tons through the sample tower et cetera and then any positive reconciliation factor or we still deceive perhaps some of the future.

Basically what the sampling tower did was confirm the higher grade, which we then used to calculate the new ore reserve and the new mining plan. So it did come in higher what we did we compared it to drilling results, we compared it muck sampling results where we had and basically we found out that the -- with the exception of chip sampling which was very wise but the tower sampling came back positively was a significant increase in grade.

Okay.

I don’t think going forward we have incorporated some of that in the present mining plan and reserve estimates. So I don’t think you would able to anticipate an additional say 15% to 30%.

Okay and we have any focus on drilling there in the near term or is it all focused on the development?

Well I think as Shaun mentioned earlier in the fourth quarter we are looking at drilling at the bottom of the shaft and that’s why we currently have some of our resource based on current shaft performance we expect to get pretty close to the target area, where we will be able to drill from a station and do a lot more drilling to be able to update or refine that resource and see what we actually have some of those drill holes, original drill holes from surface were over 5000 feet long. So we will be in a better position as far and that certainly is our intent and objective.

Okay thanks very much.

Ladies and gentlemen, [Operator Instructions] Your next question comes from Mike Curran with Royal Bank. Please go ahead.

Good afternoon gentlemen. I think probably the question for Dave and I think he did preached earlier it was regarding the taxes in Q2 being higher but obviously a lot of that was most deferred and I didn’t really catch going forward was that to be say that was a one time or should be looking for a much stronger tax rate or higher rates but a lot of that deferred going forward?

We are projecting tax provision of around 40% of earnings before tax going forward. We will become mining duty assessable, per income mining duty assessable this year, that’s about 12% of that 40% that been said we are spending quite a bit of capital to that, which will help some of that cash cost but we do expect to pay some mining duties this year. And in fact in the second quarter 7 million ended at 26 million provision was current, was accrued and it may go up and down over the course of the year as we spend the capital.

Great. Thanks a lot.

Mr. Boyd there are no further questions at this time. Please continue.

Thank you, operator. And just want to thank everybody for attending our Q2 conference call and we look forward to keeping up-to-date on the progress we will be making on our projects and certainly on the exploration given our $35 million budget. Thank you very much.

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating you may now disconnect your lines.