Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Agnico-Eagle second quarter 2010 results conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. Anyone has any difficulties during the conference, please press star zero for operator assistance at any time. I would like to remind everyone that this conference is being recorded today, Thursday, July 29, 2010 at 11:00 Eastern Time. I will now turn the conference over to Mr. Sean Boyd, Vice Chairman, and Chief Executive Officer. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Thanks for joining our Q2 conference call. We’ve got our full team here in Toronto. We’ve got a short presentation, and then we will open it up for questions. Just in terms of an overall summary, we had record gold production, record earnings and cash flow as a result of us ramping up our newly built mines and we are beginning to see that production growth translate into positive impacts on both the bottom line, profitability and cash flow. The solid quarter from a production standpoint keeps us on track for our production guidance between 1 million and 1.1 million ounces. We still got some work to do on the cost side, particular at Kittila and Meadowbank, as we continue to optimize these two mines. Full-year cost guidance is $425 to $450 an ounce which is an increase from $399. Part of that increased guidance is due to changes in some of the FX and by-product revenue assumptions in addition to the higher cost during the commissioning phase at both Kittila and Meadowbank. I’ll talk a bit about some of the technical issues now, and then we can get into them in more detail in the question-and-answer session. At Kittila, the recent efforts have been focused on reducing the chloride content of the concentrate. We’ve seen some very good results. Although still early, we’ve seen some results over the last several weeks at 80% recovery. So, we are still on track to achieve our recovery target of 83% by the end of the year. At Meadowbank, we are just in the midst of upgrading the portable crushing facility that’s in place now. That will allow us to ramp up throughput in the second half of this year. We’ll have a permanent secondary crushing…

Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session. (Operator Instructions) Your first question comes from Haytham Hodaly of Salman Partners. Please go ahead.

Good morning, Sean. How are you?

Good morning, Haytham.

Just a few questions actually. Let’s start with the easy one, Meadowbank and Kittila. I think the addition was 22 million in capital. How much at each?

Total? The additions to capital at Meadowbank and Kittila, it’s roughly a 50/50 split.

Okay, fair enough.

(Inaudible) this morning.

And then looking at let’s say go to Goldex, are you expecting that cost per ton to decrease as time goes on or is it $24 a ton that you quoted a reasonable number. I think the original expectation was about to come down around 21.

Good morning, Haytham. It’s Ebe here.

Good morning.

We expect that to go down. A matter of fact, we’ve already started transferring a part of the workforce from Goldex to our Lapa division to accelerate and take contractor development over there, so that will be reflected more in the second half of the year and going forward. We only have one production blast and then the original envelope of just under 23 million ton will have been blasted and then we will be in a strict extraction phase. So, we expect that cost to come down.

Okay. Is the 21 still your targeted level or lowers are they?

20 to 21.

All right. Okay, good. I guess your production rate of 8,000 tons per day expected in Q4 this year, what grades are you expecting, are you guys going forward until like 2011?

We’re expecting reserve grade, which would be around 2.1 grams in there.

Around 2.1, okay. And with regards to depreciation levels at Goldex as well since we’re on Goldex, they’ve increased significantly from last year. Is this last quarter of an indication of what we should be using on the (inaudible) production basis?

Yes. Yes.

Okay. Question on your recently implemented revised debt levels; was it the $1.2 billion facility that you put in place? What are the terms on the drawn, un-drawn portion of that facility?

Right now, there’s little bit drawn under letters of credit. So, we’ve got over a billion dollars that remains drawn and you’re looking for standby piece, et cetera?

Yes, that’s correct.

We’ll just turn that over to treasurer.

Yes. Hi, (inaudible) here. The terms on the standby piece are both 80 dips (ph) on the standby fees, ranges from both 80 to 105.

Okay. If you don’t want to tell – and what is just on the drawn portion?

On the drawn portion, it’s 250 to 350.

50 to 350. Is that a LIBOR plus or is that?

Yes.

Okay. And based on what you indicated in terms of your overall debt levels of 735 million and given that you had the senior on secured notes, I guess last quarter, in the last quarter of 600 million, safe to say that this new facility and the other facilities are total to 100 and 35 million?

Yes. Its 135 is drawn under the revolver and the 600 million of notes, the proceeds were used to repay the amount outstanding on the facility.

Okay. And then last question on the facility, how much do you expect to really have drawn down on this facility by the end of this year?

Not very much. We expected that levels to come down through those course of the years, we generate more net free cash flow.

Okay. So, you’ll payout some of that 135 million that’s already drag down?

Yes.

Okay, fair enough. Let’s kick into Kittila, I saw that there’s a royalty that came into place this year, which previously wasn’t incorporated, I guess, last year. Is it in (inaudible) PR the first one emery (ph) into what rate?

It’s an NSR.

2% NSR.

Sorry, 2% was it.

Yes.

Yes.

Okay, perfect. I’ll leave it to somebody else and I’ll come back later. Thank you, gentlemen.

Thank you.

Your next question comes from Anita Soni of Credit Suisse. Please go ahead.

Sure. Thanks. My question was there a suspect to Pinos Altos. The grades drop their in the quarter, can you just elaborate a little bit on that and whether or not you expect that to come up or stay at the levels.

The gray dropped a bit and it’s a question of a blend between the Santo Nino pit and the Old (inaudible) Webber pit. The Old (inaudible) Webber pit supplying about 30% of the male feet and we’re in the upper benches and the grade is a bit lower. We expect that to improve as we mine deeper down. This is something that we saw on the Santo Nino pit as well and that’s what is currently expected.

And then in terms of Kittila, could you just explain, I noticed obviously that you’ve got a good (inaudible) rate improvements in the last 40 days, 81% average. Could you explain as much as you can exactly what the process is that kind of unlocks that?

Yes. Essentially we have mentioned in the press release. We were able to maintain above 81% in average. We’re able to control the level of chlorine going inside of the yellow crate and by doing that we’re able to avoid, gold chlorine formation. That’s –

Yes. So, I was just curious as to how exactly you’re limiting the amount of chlorine that’s going into the autoclave in the first place.

Recently, to be honest, we’re investing. We see that it’s a big potential and we do not intend to give much detail on that specific matter.

Okay.

But the potential patent issue at some point, we’ve come up with a solution on our own.

Okay. All right, thanks. And then just in terms of the through put Kittila, do you expect that to ramp up towards the end of the year? It was relatively flat quarter over quarter.

Recently for the mailing, we drop a little bit to stabilize the circuit and we intend to be able to raise over 3,000 tons per day.

Okay. So, can you give guidance on where you’re at right now in July?

We’re at roughly 2,600 to 2,700 tons per day, presently and we were also running higher grade materials, so there was some restriction there. But as I mentioned, we are making some further mechanical changes and we will be able to sustain 3,000 tons per day plus going forward.

Okay. And then just at Meadowbank, some of the throughput rates. I understand you bought (ph) second temporary pressure as well?

Yes, we do. It’s a secondary pressure. It’s the same issue that we experience that Goldex, where we don’t have the distribution of fragmentation that we had expected, so we used a portable crusher that we had onsite and it was an older model. We currently are in the process of installing a newer version and once that gets installed by the end of August – We have achieved daily tonnage rates of over 9,000 tons per day, so, we know the mill by itself is capable of attaining a minimum of 8,500 tons per day. We just have to make sure that we provide it with a consistent product.

Okay. And then lastly, just in terms of the grades at Meadowbank, was a little higher this quarter than what I was expecting. Is that expected to continue or to trend more towards what it was in the previous quarter?

Well, I would say it’s still early days. It’s been the first quarter of fall production and we still have a 600 ton stock pile and we have a mill that’s brand new and we are also extracting or directly from a pit into the gyratory crusher and to try to avoid all the extra manipulation. But I would say right now, we’re getting a lot – we’re starting to come very close to reconciling the ore body with what we are getting in the mill. So, we expect for the rest of the year to run in about the four to 4.3 grams per ton range, that’s what in our mining plan.

Okay. Thanks very much.

Your next question comes from David Haughton – BMO Capital Markets. Please go ahead.

Yes. Good morning, Sean and Ebe. Just having to look at the LaRonde unit cost, up at 79 Canadian dollars per ton. There was some commentary of it coming down, what’s your sort of target expectation of that?

Well, we are on budget for the rest of the year, $75 a ton. This is quarterly spike. There is a difference, so with respect to deferred development and operating development. Our development is slightly ahead of schedule, so more was charge to operations. Also we had a shutdown, where we changed the hoist cable so there’s also a stock pile adjustment in there. So, we expect the mine to maintain its cost and this is only a quarter situations.

Thank you, Ebe. And just having to look at Meadowbank, (inaudible) right there look to be around about $170 per ounce. Is that what you expect for it to be on an ongoing basis?

We missed that, David.

I’m sorry. Just having to look at the Meadowbank depreciation rate on a per ounce basis, it looks around about $170 per ounce mark. Is that something that we should be thinking about going forward?

Yes.

All right. And thinking of Meadowbank, I know that you’ve got a number of modifications in place with temporary pricing, et cetera. But just trying to get a gauge as to how the unit costs might unfold. Could we expect to see unit cost, the order of $80 per ton for the remainder of the year and then coming back to much lower levels once you got your own crusher in place?

That is correct. We’re also faced with a bit of accelerated stripping, which we will be expensing the secondary crusher that we have with all of the manipulation. We expect that to cost between $3 to 5 a ton. Also, we expect significant improvements with respect to drilling over the past winter even though we had no production drills there availability due to a design defect was only about 40% that has since been in the process of being resolved. We’re very close to having resolved that with the manufacturer. But as an insurance policy, we have acquired additional drilling capacity, also our emphasis at Meadowbank was getting the mill, the process plant going and as a result the maintenance facilities progress suffered. They have since been completed and will be operational this month. So, the availability on the truck fleet and the shovel fleet will improve significantly and secondly on the barge season this year, we have a new fleet of 150 ton trucks and two new shovels coming, which will be put into operation, so we expect performance in the mine to improve significantly and with increased the tonnage through the mill, we expect the unit cost to drop.

And the kind of unit cost target once you stabilized all of these things, could we be looking at the 65 to 70 dollar Canadian per ton?

I would say we’d like to maintain that for now.

Okay. Now, with each of those remedial actions that you’re mentioning (inaudible) I presume that there’s some capital cost associated with it?

Well, the CapEx has definitely, has increased by acquiring a crushing plant. We’ve already started to acquire some of the components for the secondary crushing plant, so that has been incorporated in the increase. Also with the issues that we’ve had in the mining plant – with the mining equipment, we have from the life of mine (ph) shifted expenditures from later on and acquired equipment earlier on, so it’s a timing issue. And then also I would say one of the other additions that we’ve experience as in the construction of the final Bagus (ph) dike, whereby overburden underneath the water, we found out it was – once we started digging was deeper, so there will be some additions to dike construction. And that those are the main areas where we have experience some increases and capital.

Okay. So, you spent so far this year about $75 million, would you expect that number to be repeated for the second part of this year?

Second half of this year, the CapEx at Meadowbank is about 90 to 91 million.

Thank you, Sean. And we’ve seen now quite a lot of cash flow being generated by this business as the producers can capture these better margins. Have you turned your mind to any change to your dividends?

We look at that every year in December and each of the last 28 years, we decided to pay one. We’re on record over the last year as we’ve moved towards the end of this building phase to say that our dividend will go up. So, we’ll revisit that like we always do once we complete the budgeting process and the five-year plan in December.

Okay. Thank you very much, guys.

Your next question comes from Richard Sherman (ph) of Private Investor. Please go ahead.

My question relates to your hedging policies and programs in light of the (inaudible) to report from the Fed here in the United States yesterday. It appears we’re going to have deflation for at least year 2011. I’m wondering could you comment a little bit on your hedging programs as far as both currency fluctuations and as well as the price of gold?

We do nothing on the gold side. We’ve never done anything on the gold side. We’ve done a little bit around the Canadian/U.S. dollar, but not much. So, we’ve got very little hedging in place. Does that answer that?

That does answer the question, I just wondered whether or not in light of the rather pessimistic outlook that came out of our Fed yesterday that does has any impact on your business or your hedging policies or not or whether you have a fairly constant program that doesn’t really reflect with based on Fed reports.

No. That report is not going to impact our view on hedging, our output.

Thank you very much.

Okay. Thank you.

Your next question comes from Haytham Hodaly of Salman Partners Inc. Please go ahead.

Thanks, guys. Just a couple of follow-up questions from housekeeping issues. Just at Lapa your DDNA (ph) levels increasing (inaudible) from Q1 to Q2, I think they’re currently around 300 to 302. Is this a reasonable level for the second half of the year or do you expect this to go down?

Just the same.

Same, okay. And then Kittila, what proportion of your total throughput will be from underground in 2011 roughly?

2011, we will be getting about; I believe it’s 20 to 25% of our ore from underground.

What type of grace you’re looking out from the underground there?

Well, I would say similar grace as the open pit in the five to six gram range.

Okay. So, there is no real change, perfect. And then last question, another housekeeping, Pinos Altos, depreciation levels, I think they are 177 on a unit production basis in the second quarter is that also a reasonable expectations for the remainder of the year?

Yes.

Perfect. That’s all my questions. Thank you.

All right.

Your next question comes from David Christy of Cortia Capital (ph). Please go ahead.

Good morning, guys.

Good morning.

Just one Kittila, I guess quickly the recoveries apparently are good for the past 40 days. Sean, what kind are you getting in those net ore – like what is it different than we were mining before? Is it the same stuff or?

We plea (ph) – in the last 40 days, we have different recipe so it’s not just specific to one zone in the great play between five and seven grams per ton.

So, it’s pretty typical of the deposit, that’s great. And the mineralogy is being similar (ph) to what the problems you’re having before? (Inaudible).

(Inaudible) and we touched some zone that we have the poor recovery and we’re able to maintain over 80%.

Okay, that’s great. And what kind of additives, like what kind of expense you have to have to maintain this is it? Are you going to increase the milling cost there at all?

Presently (inaudible) –

That’s great.

I think –

To add to that David, I think anything we do from a CapEx point of view will be to get us to the next level closer to 87%.

Great, perfect. And one more question, just on the rock, I guess hardness or rock quality up at Meadowbank. Is it harder or is just the rock quality was stronger than you’re expecting?

I would say it’s probably a bit stronger than what we had expected, but I think the big issue is more like when – in production blasting that it does not give us the distribution of fragmentation. It tends to breakup, I guess, perhaps its bond at iron for basin and it breaks into bigger chunks and with a very little finer material in it. So, that maybe just a function of the bonding within the ore, but that is the main issue there. We have found in non-process plant, it really isn’t that much harder than what we had predicted.

No. So, this is more like the silica bonding in (inaudible) as oppose to the sulphite and –

I would guess so, yes.

Now, you think we have similar issues at Timalaydan (ph) or is it similar?

Well, I would say what we have seen at Timor, I would say there’s a lot more quartz to silica, so it may be an issue. But then also long-term Meliadine will be an underground operation but certainly we will take that into consideration after the Meadowbank experience.

Okay. One more question just on Meliadine, however we’re going to say it. Are we going to – are you going to be building a road clear (ph) in the near term or what’s the decision on that?

Well, we have proposed to the board to build the road, but timing and construction and (inaudible) is contingent on permitting. So, what we have said that we would like to accelerate the permitting and get the road in as quickly as possible and therefore, basically set the tone for the project even in the latter stages of exploration and it would facilitate construction. This is once again based on the Meadowbank experience where the road construction was delayed and then to be able to maintain the big picture then we had to airfreight and use other ways and means of getting material in and that resulted in CapEx experience, so we are applying what we learned at Meadowbank and would like to ideally get the road in as soon as possible and not have – especially during the summer months, not have to helicopter everyone in.

No. That way you wouldn’t have to upgrade the port facility in (inaudible) that way, right? Like you had to in Baker (ph)?

Well, I think Rankin (ph) is blessed with a bit more rain (ph) infrastructure. We have to look at perhaps more fuel storage. we don’t have any fuel storage at Rankin (ph) so there’s going to be have to be some upgrades, but our initial discussions with Rankin inlet (ph) with respect to fuel and the government (inaudible) ought to have been very favorable, very (inaudible) and legal.

Nice one. Thanks, Ebe.

You’re next question comes from Anita Soni of Credit Suisse. Please go ahead.

I think most of my questions have been asked. Thanks.

You’re next question comes from Richard Sherman (ph) of Private Investor. Please go ahead.

You’ve had a fairly aggressive acquisition program for the last year or so and as far as minds are concerned. But I’m wondering can you tell me a little bit more about what your plans are for in the future? Are you going to stay in Pat (ph) or do you have an acquisition program or policy in place in the company? Thank you.

The program has been fairly consistent over the last several years, looking for those smaller, earlier stage opportunities and growing them. As you said, we just completed one this month. We continue to look, the foundation for our growth over the next several years will be the existing projects and now that we’ve added Meliadine in the pipeline that gives us a big deposit that we feel will grow and will add another sizeable production mind for us. But we never stopped looking, but we are looking for those smaller earlier stage opportunities that we can get exposure to and drill and grow them and then decide what sort of infrastructure we could build on them.

You seem to continue to focus on pretty safe haven countries, Mexico, Canada, and Finland. Is that an integral part of your policy or are you a little bit more open on that now?

It’s been an integral part of the history of the company with six mines in pro-mining jurisdictions. We could probably go into areas that are new to us now given that we’re well-diversified. But again you won’t see a dramatic change in Agnico’s approach in terms of where we’re going over the next few years.

I think my last question is going to be in safety and (good), the fact that we’ve had some both coma and accidents in connection to the Gulf disaster. Be interested o hearing your comments about safety programs and policies since you’re mining operations do have a fair amount of risk connected with them.

Thanks for the question. Agnico has historically been one of the safest mining companies I the Northwestern Quebec. Our mine rescue crew’s established a new record by winning the Quebec mine rescue championships five years in a row. In terms of our peer group, we have always consistently been at the top of our peer group. Just recently, two of our mines in Quebec, two of them won safety awards recognized for their hard work, the Lapa mine and the Goldex mine. And these are new operations. And that was also a first in the Quebec mining industry. Everything that we have learned, we have applied elsewhere and our staffs of other mines be there in Mexico at Pinos Altos, Kittila in Finland or Meadowbank in Nunavuk. Their safety numbers are right on track or not even better than some of our Northwestern Quebec mines. So the safety of our employees has been a cornerstone and a foundation of our growth, and that has been recognized by employees, by the governments, by the people and by mining agencies.

Are you generally satisfied that your mines are being operated well within the regulations of the various countries where you operate?

Absolutely. Our relationships be they with the various ministries of environment work and compensation boards, our relationships are excellent. We’ve always had a policy of transparency and very open and as a result we develop great relationships and maintained our credibility with all of the various agencies, and now also in various international jurisdictions.

Your next question comes from Anita Soni, Credit Suisse.

The royalty, could you remind me who that got paid to this royalty at Kittila (inaudible) 2%?

The Finnish government.

And then with respect to the capital cost increases that you’re talking about and all about the improvements to get the cash, the unit cost down. Is any back going to trickle into 2011? You mean you spent 11 million this year, are you expecting anything for 2011?

Well we look at the major ticket for getting the tonnage up would be the secondary crushing plant and we have very early estimates and that number could be anywhere from about 24 million to 29 million and that would be spread out over two years, this year and the following year. The other item, as I mentioned earlier, was an improvements to the mining fleet and that was $13 million ticket but that’s sort of a life of mine ticket that we’ve accelerated from, it was originally in 2011 and 2012. So with the barged season and the issues we were having, we thought that it would be in our best interest to accelerate that. And then the other major items are like dike construction, and as I mentioned, that would be about an additional $5 million to $7 million mostly due to (droughting) of the dikes and more material to be deposited. But those are the major, major changes.

Okay. So that –?

The total amount for this year would be about as I mentioned 90 million to 92 million, and then moderate increases next year as we spill over with the crushing plant and final dike construction.

(Operator Instructions).

Well if there’s no further questions, I’d like to thank everybody for their attention. Just to remind everyone we will have an expiration update out in September. That will incorporate the drilling that’s being done or has been done at (Meladine). We have three girls, or three girls have been going this year. Also we’ve been doing our deep drilling in Kittila, so we’ll provide an update on that

The drilling that’s been done or has it been done at Meliadine. We have three drills or three drills have been going this year. Also, we’ve been doing our dip drilling at Kittila, so we’ll provide an update on that as well as the exploration of the other properties. So, we’ll see a full exploration update in September. Thanks again for your attention.

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