Good morning ladies and gentlemen and thank you for standing by. Welcome to the Agnicole-Eagle Mines second quarter 2007 conference call. (Operator Instructions) I would like to remind everyone that this conference call is being recorded today, Thursday August 2nd, 2007 at 11 am ET. I would now like to turn the conference over to Mr. Sean Boyd, Vice Chairman and Chief Executive Officer. Mr. Boyd, please go ahead.

Thanks operator and good morning everyone and thanks for joining our Q2 ’07 conference call. We’re going to take you through certainly the operations, talk a bit about the projects, just outline some of the news flow over the next several months as we continue to be very active not only on the mine-building side but also on the exploration side. Just to reiterate at the top, expect no change sort of in our philosophy or our approach to growing our business. Expect us to continue to focus on building value by constructing the projects and growing our reserve base through an aggressive and large exploration program. The goal continues to be to provide our shareholders with quality production and reserve growth, do that in pearl mining regions, have that fully funded and still providing the investor with very good exploration upside. And we’ll take you through some of the focus and some of the targets of that as well. For those on the Internet, you can follow all the advancing slides as we move forward. We’re just looking through the forward-looking statements. Just on the growth strategy, again, we’ve been very consistent, no change there. The focus is to grow our gold output. We’ve got industry-leading production growth. We anticipate being able to grow our production five times by 2010 to the 1.2 million ounce mark. That production growth will be supported by increasing reserves. The reserve position is over 15 million ounces. We have the ability to grow this position, which is already the largest reserve position in the mid-tier. We continue to target the 18 to 20 million-ounce range within the next 18 months. We’ve got an excellent track record of growing these reserves and certainly have been doing that on a reserve per share basis over…

Certainly. Ladies and gentlemen, we will now conduct a question and answer session. If you have a question, please press the star key followed by the 1 on your touchtone phone. You will hear a tone acknowledging your request. Your questions will be pulled in the order they are received. Please ensure you lift the handset if you are using a speakerphone before pressing any keys. One moment please for your first question. Your first question comes from John Bridges of J.P. Morgan. Please go ahead.

Hi Sean, everybody. I was just wondering with this mining of the lower grade zinc core at La Ronde? Your comment that that extends the life, how should we look at the mix of contributions from the different ore sources that are going forward.

Good morning, John. Ebe Scherkus. Actually the mix will be roughly the same. I think the issue that we have at LaRonde is in the actual metal prices in comparison to the budget. We used very conservative metal prices when we started the budget, and if we use present day prices, then a lot of the material, especially on the fringes on east and west and also into the hanging wall, becomes economic. And so, the actual blend will be the same, but the impact, if we do take that additional material it will extend the life of Mine La Ronde One by an additional two years.

Ok, and that's the entirety of it, or just what's in front of you at the moment?

Just what's in front of us at the moment.

So, when would you require, I suppose that gives you more leeway with the deep extension.

Exactly.

And, so when would that switchover come?

That switchover, obviously we like to maintain our gold production profile, and so the planned switchover was around 2011. That's still our target, but it will mean that La Ronde One will not be depleted.

Ok, so you're basically building some flexibility.

Yes.

Ok, that's helpful. I see with your, there are some rather optimistic currency estimates in some of the cash cost estimates. Will those be changed with the new forecasting you're going to give us later in the year?

Yea, that will be part of the update in November.

Ok, well done the results, and thanks very much.

Thank you.

Your next question comes from Victor Flores, of HSBC. Please go ahead.

Yes, thanks. Good morning. I was hoping that you could give us a bit more color on what you see as the long term potential for Kittila. I realize that you can't answer all of these questions until you get down there and do some more drilling, but it appears that the center of gravity of this project is moving more towards the underground, and I was just hoping you could give us some color on that.

That is because we're focusing on the main mine zone, main zone currently, Victor, and I think for long term planning purposes with respect to looking at the shaft locations, but I think what the deep drilling has done is basically extend the mineralization vertically by about another 400 meters, but if you look at the history of the whole belt of the original [Ciricusico] deposit, the main zones started out very similarly to our zones at [Rurara, the Paha], the other zones to the north, so they all have that same sort of history, so as we started drilling deeper and followed them up the deposits grew so I would say there's nothing, there's no real relationship with respect to the center of gravity, it's just a matter of getting the work done, and we're focusing on building ounces, and the , that is our first priority. Secondly, if you look at the deep drilling, that's some of the best grade material that we have encountered, and of course we'd like to focus all of the drills around that particular intersection, because that's where we believe we can get instant growth and reserves and resources. Thank you, do you have any sense as to whether there are specific areas that have higher-grade shoots that you'd like to focus on, or is it still too early to ask that kind of question? Well, I think the area we'd like to focus on right now are the actual main zone. When we look at the intersection that we obtained there, it was over 15 meters thick, but the actual mineralization was in excess of 30 meters thick. So that is one very prime target area that we have to follow up on. Great, thanks, and then, just turning down, there's a lot of information coming, including the analysts tour, but can you give us the sense that this point is to , what the break down, the reserve is between the open pit and the underground? Your next question comes from [D. Fran], with E Capital, Please go ahead. [D. Fran]: Good morning. My first question relates to Kitila, could you give us an update on the amended permits, since you had to amend for autoclave? We just received notification from the Lapland environmental authority, and they have ruled that it will only be an amendment, an amendment will be required, and not a full EIS, so that is very good news indeed, and we expect to have the permit by the end of the year for the Autoclaves. You would still be on track to still be in production…

Absolutely. [D. Fran]: Yea, ok. Secondly, regarding Goldex, you did put some stockpile in your press release here, 181,000 tons at 1.9 grams, is that ore mostly coming from the reserve, or from the ore?

Well most of the development, if you look at the Goldex deposits, of the zone, is within the ore body, but a lot of it is in the bottom part, in the drop points, the bottom of the ore body in the cones, and part of it is also with respect to the drill drifts, so you would expect to see slightly lower grade, because it is at the bottom, so there is some inter lapping there, Over lapping. [D. Fran]: That's why the grade is lower than the reserves?

That's one reason, but then also that is based on channel sampling, and if you'll look when we made the feasibility, or completed the feasibility sample, channel sampling gave us one of the lower grades in comparison to actually mill recovered grades and diamond drilling. [D. Fran]: Ok, so you still expect the 2.3 grams...

I would say in the neighborhood of that, but slightly lower because we do know we are taking material that is marginal to put in the infrastructure. The open pit reserve would be about one third, of that would be roughly, I would say, 800-900,000 would be open pittable, and the remaining would be underground. [D. Fran]: And lastly, just once you finish the shaft end, can you give us an estimate of how long it's going to take to be in commercial production?

Well, we're saying that we will be ready by the middle of the year, the shaft will be completed in the fourth quarter of this year, and as you're aware we're developing a lot of infrastructure from Shaft number one, so the main thing that we have to complete the next year or so is the crusher, the load up facility, but work has already started on the crusher excavation from shaft number one, so we expect to have all of the infrastructure ready by, ready to go by the middle of next year. Production drilling will be starting in the first quarter of next year, and then we're gong to start blasting and building up to swell so production to ramp up to, during the second half of the year, and we expect to be at 4 tonnage by the end of next year. [D. Fran]: Thank you very much.

Your next question comes from Steven Butler, of Canico Islands. Please go ahead. Ok.

Good afternoon Guys, and congratulations on hiring Mr. Dan Keveri. I wonder when he's headed back to Finland?

I don't know, that's not part of this work description.

I know, I was just kidding. Guys, just a quick question, for you on Ebe, as much for you as anybody, on LAPA, cause Sean mentioned the delay maybe missed what your comments were Sean or Ebe, on LAPA, in terms of expecting now nominal ounces of production in 2008?

Well, the amount of ounces that we had forecasted at LAPA was around 8,000 ounces, and now it's just start-up in December. We've done a lot of additional metallurgical work, so we've done some modifications to the process, and so as a result of that, we ordered the equipment and the market being what it currently is, especially delivery times of the site mill were longer than what we had anticipated, so that has been incorporated. However what we have been able to do is rather than have a slower ramp-up, we will have a quicker ramp-up in the second half of the year, so the ounce production for 2009 will be as planned.

Ok, thanks. And Sean, you m mentioned the impact of [blueskate] ore, in the quarter, in my calculation, to a fairly nominal impact of not much more than a ton on your consolidated costs, is that correct?

I'd say, Steve, there's about $3 million in costs previously quarried. They were added to period costs in the quarter and that added an impact of almost $4 a ton.

Oh, I see, so they were not necessarily in the $100 per ton quote. They're additional to the $100 per ton quote.

No, no, the $3 million is you asked, is about 100 and Canadian. And that got added to our period costs in the quarter, so we’re over and above our regular operating cost. Cause it didn’t displace any La Ronde ore.

Oh, I see.

Our (inaudible) was over budget in the quarter and was over budget by the amount of [blue scale] that we processed.

Ok, ok. Thanks very much.

(Operator Instructions) Your next questions comes from Gregg Barnes of TD Newcrest. Please go ahead.

Yeah, thanks. Sean, I guess from your opening statements we can conclude that you have no intention of getting involved in the end of M&A in the gold sect that’s going on right now?

Well, I think if you take a look at the approach we’ve taken over the last three years, that’s certainly the way we hope to continue. We’ve been asked specifically about the Meridian transaction and normally we wouldn’t comment on it, but we will in this case because we’ve consistently said in the last year that that’s something we would not do. And it’s no knock against them cause we actually, as we’ve said, respect the job that they’ve done over many, many years of doing the right thing and creating a lot of value for their shareholders. But when we look at it, it’s our estimations that we can add as many ounces as Meridian has currently in reserves through our own drilling of our resource in the next 18 months. So it makes more sense to do that rather than have to spend $3 billion plus to buy something like Meridian.

Great thank you. Just a follow-up question, too. On your CapEx breakdown for the year, you’ve revised a bit from what you put out at the end of Q1. I guess that’s just the distribution of the CapEx. And Goldex has gone up from $91 million to $107. Is that a timing issue or is that something else going on there?

I think it’s a function of timing and a little bit of foreign exchange as well. We’re using more current foreign currency rates and there hasn’t been any serious escalation in currency costs in local terms but obviously when translated into US dollars there is an impact.

And that’s the same on the other numbers that have moved around a bit?

More or less. Yes.

OK, thank you.

Your next question is a follow-up question from Chantal Gosselin of Genuity Capital. Please go ahead.

Hi, I just forgot to ask about the tax rate. In the quarter, your tax rate was much below what you guided before. 41%. Can you tell us or give us some guidance what we should use going forward?

Yeah, the big change in the quarter was because of the acquisition of Cumberland. The expenditures we’re incurring at Meadow Bank actually help us to shelter income (inaudible) and that reduces our overall effective tax rate going forward so we’re guiding for the full year 30%-35% and similar levels next year.

And that would be for two years and then we would go back to something more like 40%?

Yeah, once the expenditures at Meadow Bank start to abate in late, late ’09 to 2010, then I would expect the tax rate to creep back up.

Ok, thank you.

Your next question comes from Robert Cohen of Goodman and Co. Please go ahead.

Yes, hi guys. Hi Sean, how are you? Quick question just on your TCRC, given the fact that the TCRC market, the costs have dropped quite significantly over the last few quarters. Just wondering if we’re still on some old contracts right now and what we, what things look like going forward. Do you we expect to renew any contracts?

All of our contracts, we’re on long-term contract currently and we are on the benchmark for all of the predictions, completely committed for the year and coming here.

Do you have a sense of what you’re paying on your basic TCRC charges?

Presently it’s in line with what is the news, so for the zinc it is in the 100 something. I have to check back. I can come back to you.

Ok, thank you.

Your next question comes from Lynn Moore of the Montreal Gazette. Please go ahead.

Hello, I just wanted to ask you about the labor situation. You referred to it obliquely earlier. Is it still a very tight labor market for skilled and experienced people?

Good morning Lynn. It’s Ebe Scherkus here. The market is definitely tightening. However, we have been fortunate because we offer the job security and the (inaudible). What has been surprising is the recruitment on our Meadow Bank project, we recently put out an ad in the Western Canada Nunevut and Eastern Canada and what was surprising is that we received over 500 applications for the Meadow Bank project Also within Nunavut and Baker Lake and surrounding areas we’ve received an addition over 200 people, so we have to look through over 700 people that are interested to compete for about 300 jobs. We don’t have the same problems but there is a definite tightening.

OK, are these skilled jobs?

I would say about 60% of them would be able to be truck drivers, operators, and the remainder would be journeymen, electricians, mechanics, and of course technical people.

OK, just one last question. You mentioned the experience of the two fellows you hired for the project. They have 30 years, is that together, or each?

60 years together.

Ah, very good. Thanks.

The next question comes from (inaudible) with CDP Capital

Ah, good morning, it’s actually Steven Kibsey. I was just wondering, at Meadowbank, what was the exchange rate that was used in the feasibility study to get the cost at $230-250 U.S dollars an ounce?

Steve, off the top of my head, it’s Dave, I think it’s around 120.

OK, thank you very much.

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

Thank you operator, and thanks once again for participating in second quarter conference call. For some of you, we’ll see you at Pinos Altos in a couple weeks. Thanks again.

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