Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Agnico-Eagle Q4 and Full Year 2010 Results Webcast Conference Call. [Operator Instructions] I will now turn the conference call over to Sean Boyd and Ebe Scherkus. Please go ahead.

Thank you, operator, and good morning, everyone and welcome to our Q4 2010 conference call. As usual, we'll go through a series of slides, but the focus this morning will be certainly on Q4 operations, focusing on couple of our mines. We'll also talk about our reserves and resources and update you on our strategy as we look at our business going through 2010. As far as the corporate strategy goes, there's really no change in our approach to growing our business. We're still in a position to continue to grow output. We see output growing about 19% in 2011 over the 2010 number. We're looking for a range of production from 1.13 million ounces to 1.23 million ounces. As we extend that out through 2014, we're looking for about a 50% increase in output to 1.5 million ounces from the existing asset base. As far as the reserves goal, our 2010 year-end target was 20 million to 21 million ounces. We finished the year with 21.3 million ounces. So that's a record reserve position, all based on the existing assets, including the newly added Meliadine project. We're targeting more than 22 million ounces at the end of 2011. To get there, we're anticipating a Kittila reserve update during the year when we complete the feasibility study. And from a resource perspective, we're also looking for a mid-year resource update at Meliadine because we have an extensive exploration program ongoing at Meliadine. Our overall exploration budget for 2011 has increased by about 30% to $145 million. So that's a strong commitment to exploration, and we believe that, that's going to allow us to outline additional resource, move those into reserves and create future production opportunities for future growth. As far as M&A, no change in our approach. Still looking for…

[Operator Instructions] Your first question today comes from John Flanagan [ph] with Fundamental Equities [ph].

Sean, could you compare your current estimate -- is the return on investment at Meadowbank relative to where you started it? Has the price of gold offset more or less the cost increments?

Yes, because the price of gold, when we were looking and evaluating the opportunity, was in the $525 range. That's the number we were using, mid-$500s, so the gold price has increased dramatically. I think what we've seen there is we haven't really been able to see how this asset can truly perform until we get it up to speed. But it still will be our largest producer, producing on average 375,000 to 400,000 ounces a year in the early years. That's going to generate significant margins. So the actual rate of return is higher than what we were estimating when we first made the investment.

So it looks as attractive to you today as it did five years ago.

That's correct.

Your next question comes from a private investor by the name of Richard Curman [ph].

My question is primarily about Pinos Altos and it refers specifically to the violence in northern Mexico. And I'm wondering if you have any comments about the general security, concerning the situation there, with respect to the mining properties in particular, and actually, the safety of the families and workers of the mine in that surrounding area?

Hi, Richard. This is Tim Haldane. Well, obviously, we're aware of the security situation in Mexico and we pay close attention to that. And we have experienced no issues with security, no impacts or direct issues with security in Mexico. We're just following that situation very carefully. I think our best tool is that we're a part of the community where we work. And I think our work force is something north of 99% Mexican nationals. That helps us a lot, I think. And being a very heavy employer in the local area helps us a lot. And just following good security practices, best practices, having security audits and those kind of things also helps. But bottom line is, we haven't seen any direct issues yet. And we, like you, follow that very closely.

I'm not sure of the state in particular where you're operating at Pinos Altos. Is that state reasonably stable in light of what's going on there?

Well, the state is Chihuahua and you hear a lot of news coming out of Chihuahua. We're not in the heavily populated area of Chihuahua. But it is our state. That's the biggest state of Mexico.

That's a fairly stable state as far as you can tell.

It's in the news a lot. So it's a stable state but it's also been one of the areas that gets a lot of attention.

Regarding labor contracts with respect to really all the mines, what are the maturity dates of those contracts? And what do you foresee as far as renewal of those contracts?

Ebe Scherkus, COO. We don't have any specific labor contracts per se. We are essentially non-union across the board. We do review salaries on an annual basis in November/December with our employees. We do have worker representation on all of our mine sites. And we also ensure that from a salary and benefit point of view that we are more than competitive and that we are in the top quartile. So in our 25-year operating history in Northwestern Québec, and now elsewhere, we have never had any labor issues or labor stoppages or strikes, et cetera. And we have had very, very low turnover, almost zero. And also very low absenteeism, at the top of industry.

On debt management, the debt level seems to be reasonably well-controlled and that is being paid off, I think, long-term debt. Remaining maturities on the debt and plans for further refinancing and issuing new debt, can you comment on those two items?

Richard, it's Ammar Al-Joundi. We are in a very strong position from a cash flow generation perspective, as Sean mentioned generating in excess of $500 million. We have, since the end of the year, repaid the remaining $50 million on our bank facility. The rest of the debt outstanding is long term fixed debt, with maturities out to 2017 and 2019.

You’re financing general operating operations from, then, commercial paper and lines of credit pretty much?

From cash flow. We're generating a lot of cash flow.

So you don't use a lot of commercial paper or the line of credit so much. Mostly from cash flow.

As of now, we're not using any commercial paper or the bank facility.

Your next question comes from John Park [ph] with MorningStar [ph].

Just had a question on Kittila. You guys mentioned that the high sulfur content in the ore, kind of negatively impacted the cost of processing the ore. So I was wondering if that's something we can expect going forward at Kittila?

It's Jean Robitaille speaking. Presently, the design of the autoclave -- essentially, the autoclave is a sulfur burner. If I want to summarize it, then the design was 4.4 tons per hour. Presently, we're pushing it. So it was just a temporary situation. And presently, we expect to be able to exceed it. So we don't see on the medium and long terms any issue with that.

So just to add to that a bit. What we're trying to do is to stabilize the mill feed from a grade point of view and from a sulfur point of view into the mill, and to make sure that the mill finally is stable. And as Sean mentioned earlier, we have been able to do that from the end of November into December and as we speak today.

I also had a question on Meliadine. Seems like it's a very attractive asset with high grades. I was just wondering, for your exploration efforts at the Meliadine this year, will it be focused on expanding the mineral resources or on converting the existing resources to reserves?

We will be focusing on converting the resource to reserve for the feasibility study. However, we do also have a portion of the drill program of the 65,000 meters that will be focused outside of the main Tiriganiaq zone and along the strike. But the main focus will be to define the zone for the feasibility study.

Your next question comes from David Christie with Scotia Capital.

Back to the Meliadine for a second. At Meliadine, Wesmeg, what's the size of that structure or that zone? And how big do you think you could get as far as strike length?

Guy Gosselin, Vice President of Exploration, will give you some color on that, David.

Hi, David. While currently we went back in some of the historical drill holes that were done by West miner [ph] in the middle of the 90s. And we managed to trace, while we are talking about two structures, that seems to hold on over at least 1 kilometer of strike length for both of them and maybe more. So it's going to be a good portion of our exploration budget this year to try to bring as much as possible of that near surface inventory to the resources and reserve if it's possible.

And do you know -- it's a little bit different geological environment than the rest of Meliadine. Do you see other targets like that?

Well, yes, we have lots of other good targets like that. And basically, it's pretty much the same than Tiriganiaq. So quartz flooding, quartz vein with visible gold, free gold in the structure. It seems to be pretty similar to the rest of the deposit, very next by Tiriganiaq, which is one interesting feature. It's only 400 meters south of the Tiriganiaq open pit, so it could bring a lot of upside to our mill design and operation design.

I thought it was in the volcanics more so than in the sediments. Isn't it?

Well, yes, you could refer it as maybe more similar to wells. But it's next by. It's in the volcanic, but we're still talking about quartz vein flooding associated with arsenopyrite. So it's pretty much similar to the quartz vein system in Tiriganiaq. It's not the same old truck but it's the same gold-bearing structures.

And when you look at your labor costs in 2010 and where they're going into 2011, in which jurisdiction have you guys seen the most inflation of labor costs?

I think the most inflation that we have experienced would be northwestern Québec, Nunavut, that area with all of the mining activity has essentially been tapped out. And as a result, labor cost, especially for some of the skilled trades and the technical people, in our view, have gone through the roof.

So what would be the percentage increase here?

Well, I would say we faced about a 10% to 12% average.

That makes up, what, 30% of your total cost from those areas or...

I would say 25% to 30%.

In Pinos, you discovered a great zone, at Cubiro there. How many other targets are you going to drill similar to that kind of thing in the next year?

For this year we continue to drill Cubiro. We just, at the end of the year, discovered the West branch. And we continue to drill a couple of new targets. That's it for Pinos Altos.

Your next question comes from Steve Butler with Canaccord Genuity.

The Cubiro zone, was it actually included in resources at the end of the year? And also, the lower zone at Goldex, I think the D zone, anything in resources at the end of the year on those two?

Cubiro, we'll provide some color on that, but Cubiro was included in the resource. I don't have the exact number of ounces. The D zone at Goldex is roughly 700,000 ounces of inferred resources, a significant chunk lying just potentially below the main deposit that we're mining right now, the GEZ. And if you look at the sections that we provided in the press release/presentation, you can see just how significant that is. I believe is about 145,000 ounces and expanding in indicated and inferred.

Jean, how did you deal with the high sulfur content? I know that you said that it's now been mitigated or come back to normal. How did you deal with it in the autoclave, maybe in as layman's terms as you can be?

First of all, as explained earlier, we blend the ore to make sure that we do not pass the peak in playing with the grade too much. But the design of the autoclave was for 4.4 tons per hour. But as you know, and as we explained in the past, the autoclave has the capacity to be pushed. And presently, this is where we are, generally, we're in the mid-80s. We were at 85-roughly-percent recovery and we are quite stable in the process. So now what we are targeting is to increase that to 4.5, 4.6, up to 5 tons per hour. So if we can do it and we have a good chance to be able to exceed the current design, then that will result in more flexibility in the blend.

And Ebe, the guidance for 2011 for Kittila has about EUR 55 per ton, roughly, versus EUR 79 in Q4. So what areas do you see the biggest improvement? I assume it is mostly just on the denominator on the throughput potentially increasing. Anything else you see opportunistically to lower costs on unit per ton basis?

Of the cost that we have in the past quarter, for the first time in Kittila's operating history, also includes 62,000 tons from underground stopes. And we have started expensing underground development and services, which is a first. So when you look out over the three-month period, we produced 62,000 tons or 20,000 tons a month. So that denominator is very small. And therefore, those tons were very expensive, in the EUR 85 to EUR 86 per ton range. So as the underground ramps up to its design capacity of around 90,000 tons per month and the open pit winds down, we expect to see that underground number drop significantly. And then as a result, we expect our mining cost to drop significantly. So we have the impact of a denominator but also a transition to underground operations from open pit operations.

And your next question comes from Barry Cooper with CIBC.

You've talked about the expansion at Kittila and, certainly, the resources there are supporting that. And you've talked about putting in a shaft. What kind of changes do you need on the processing side of things? Because, I guess, when I look at it, the autoclave has obviously been a little bit fickle and whatnot, and I'm not sure that you're going to be a whole lot anxious to start tweaking around with it for an expansion there. And so I'm wondering: Just what are the plans for the processing side of things for the expansion there?

Good morning, Barry. I'll just start with a few comments and then turn it over to Jean. I think with respect to the expansion, what we currently have especially over the last couple of months, and we could even argue over the last couple of years, we now have operating history. And we are starting to get to know the autoclave quite intimately. And that has been reflected in the global recoveries, which are now averaging in the mid-85s. We also know where we would need some corrective action or when we want to upgrade the autoclave or add another one. We haven't finalized that. But we definitely know what we would like to do differently based on our operating history and results to date. So with that, I'll turn you over to Jean for additional comments on what the rest of the plant would look like.

Hi, Barry. Essentially, we are looking 45 to 6,000 tons per day. In both case, the grinding circuits will have to be extended. And the flotation circuit for the autoclave, at 45, we presently -- the data that we have, it’s looked like we'll be able to use the current autoclave. For sure we'll do a complete investigation. And we just awarded a contract and we are working with Atch [ph] on that specific topic. And for the remaining part of the circuit, it will be as usual increased. But it's nothing very fancy that we'll have to do at Kittila. Presently, we know, we justify the recipe and the parameters and we are stable at 85. We expect being able to increase over 85 and even, surely with the extension, touching the 87%, 89% recovery.

You indicated that at 45 you could use existing. If you went to the 6,000 then is that when you would have to incorporate another autoclave into the system?

We have different options and we have to evaluate all of these ones first. It's another alternative to add another component instead to add another autoclave. So we are under review presently. And in principle, by end of September, that will be in the report.

Then on to Pinos Altos. The cost per ounce came down nicely, but I'm just wondering how we should look on a go-forward basis in assessing this operation on a cost per ton, which you guys always refer to, when you’ve got such a variable mix of both underground and open pit material. And so Obviously, $35 a ton is a blend between the two and when you show it quarter-over-quarter as being flat, that doesn't necessarily mean things were good and it doesn't necessarily mean things were bad, because the mix can be modified there. How should be really look at this, going forward? Because obviously, then on top of things, you've got the influence of silver prices and silver credits that can, obviously, affect the cost per ounce. So clearly, the cost per ounce is not the way that we should look at the performance of this mine when we're trying to judge quarter-over-quarter results.

Hi, Barry. It's Tim. I think the guidance we gave for our cost per ton -- we're pretty comfortable with that. We're just starting to produce underground close to design rates. We've hit the 3,000 ton a day rate for extended periods, weeks or 10 days or something like that. And our underground mining costs are actually slightly below what we budgeted.

And what's that number?

Well, the breakout of the underground mining cost, I'd have to get that to you. But the overall mine site cost, I think, that we forecast was in the low $40s, $44. And I can get you that number, Barry. But just...

Just trying to assess, one, you may be running at $15 and the other at $60 for [indiscernible] and the number blended.

It's not like that, because the stripping ratio is really high in the open pit. And I just don't see -- I'm pretty comfortable with the number that we gave for guidance, and I don't see any bad surprises there, I think. We're going to work pretty hard on beating that.

Ebe here, Barry. So in comparison to Kittila, as Tim mentioned, Pinos Altos for periods of time has already hit the 3,000 ton per day capacity and currently, our blend is in transition like Kittila, but ahead of the curve, and it's currently running 50% underground and 50% open pit. And then when we do look at the cost of moving one ton of rock underground when we're averaging 3,000 tons a day, as Tim mentioned, we are comfortable with our number. And we are coming in underneath our plan.

So is that 50-50 split a good go-forward number for the next couple of years then, at least?

No, because the open pit will essentially wind down over the next five years or so and the underground will continue to ramp up. Of course, what could potentially change is we currently have a mill that's got a capacity in excess of 5,000 tons per day and we have a mine that has been designed for 4,000 tons per day. So over the next five years, that blend we're looking at, as we referred to the previous quarter, either another production ramp or, potentially, a shaft, to increase the production of the underground to bring it closer into line with what the mill can now do.

Your next question is from a private investor by the name of Walter Mulgan [ph].

My question is to the dividend, the increases that you've hinted at both earlier in this conference call and last night on CNBC. Given that gold prices have continued to be considerably higher than what is in your budget, can you give us an indication of number one, how much additional cash revenue you will get from that bump in gold prices versus budget? And two, how you intend to share that with shareholders?

We can do both. At current prices, if we look at 2010 where we produced about 1 million ounces, the average realized price is probably a couple hundred dollars less than where it is now. We generated $580 million of operating cash flow. So we're looking for about almost a 20% increase in production. If gold prices average where we are now, again, that would bring in a couple of a hundred dollars more in additional revenue per ounce. And so that's why we say we have the ability to increase the dividend. We haven't really talked about amounts yet. We generally do that on an annual basis when we go through our budgeting process, but I think we've been quite clear in saying, we look at that additional cash flow and the cash flow that’s being generated and we really have four pots that we look at. One is re-investment in projects, where we have some internal expansions that we talked about. We also look at exploration, which we have increased and we would like to maintain that level. We look at strengthening the financial position and we'll do some of that as we’ve paid down some debt in the fourth quarter and, recently, early in this year, but then the dividend. And I think all we should really say about dividend -- it's hard to quantify what it could be, except to say our capacity to pay more has increased as you've pointed out. But I would also point to our track record, which is paying one for 29 straight years in an industry that's had a lot of cyclicality over that 29-year period. So it’s a key part of our strategy and focus and it will continue to be as we go forward.

The next question comes from a private investor by the name of Richard Sherman [ph].

This is somewhat of a follow-up question on the previous question on silver. With silver prices soon to be substantially increasing over the price of gold, I'm wondering whether in your financial forecasts, that's already built in, or whether you anticipate adjusting those forecasts in light of what silver is doing in the market these days.

No, our budget was based on $22 silver. So certainly, that's going to be a bonus not only in terms of additional cash but as a credit to our unit cost, given where the current spot price is. We actually like silver. We got our start as a company, 50 years ago, as a silver producer. And that's one of the reasons why we're one of the few companies that hasn't sold its silver stream away, because we believe in the upside of silver. So we've got over 100 million in silver reserves. We look at that as a key component of our ability to generate cash as a byproduct. So we're fortunate that we have 100% exposure to all of our silver.

What percentage for example, of your, say, EPS would be represented by your silver production?

It’s about 5% of the revenue, so that'd be roughly the same.

[Operator Instructions] Your next question comes from Anita Soni with Crédit Suisse.

Just a few questions on Meadowbank. First, how should we think about the tonnage rate at Meadowbank spread across the quarters as you ramp up, and I guess in the third quarter, as the permanent crusher comes online?

Well, there's two things. Currently, we have discovered that the portable crushing plant that we have tried to stake our future on over the next half year or so really hasn't worked. However, we have done quite a bit of work on the grinding circuit and that is starting to bear fruit. And we are currently averaging over 8,000 tons a day with very limited use of the portable crushing plant. And we expect to have the final crushing plant up and running sometime in the third quarter of this year. So far, it is on schedule. We were just there two weeks ago, so it is on schedule. And mechanical installation has started. So we have seen -- once we have crushed material, Meadowbank has hit peak tonnage daily rates of over 9,600 tons per day. So we feel that once this crushing plant gets operational, that we should be able to hit a consistent design rate of 8,500-tons-plus and probably, closer to 9,000-tons-plus sometime in the middle of third quarter and towards the rest of the year.

And then just a question with regards to the grades at Meadowbank. There's a bit of a swing between the third quarter and the fourth quarter in terms of the grades that you were mining. And I think the forecast for 2011 brings it back up to, I guess, the mid-range. I'm just wondering, your forecast for 2011, did that take into account the grade you experienced in the fourth quarter?

The grades in the fourth quarter, as I mentioned, we had some operational issues with the portable crusher, so we were running off some of the lower grade material right out of the pit into the mine. We also have some stockpile materials. So the actual grade we experienced in the quarter really isn't representative of what we will be mining, going forward. We expect the grade to stabilize closer to our projections once we have the secondary crusher up and running. Presently, there's too much manipulation, too much rehandling and therefore, to be able to predict a consistent rate -- it becomes difficult. However, having said that, without using the portable crusher, we will be starting to get a bit more consistent grades as we will be running off of the pit and then the mine plant.

So perhaps, we should, I guess, tweak our grades downwards in the first half of the year and then in the second half of the year the tonnage rates will make up for that.

I would say lower the grade a bit, keep the tonnage conservative and then upgrade in the second half of the year.

Your next question comes from and Mike Jalonen with Bank of America.

I have a question for Ammar. Ammar, I just wonder what your tax rate will be in 2011. It looks like it was below 25% in 2010. So the prior CFO had been guiding a little higher. I was just wondering what you thought.

We expect our tax rate overall for the company to be about 30%.

I remember, historically, we’ve been much closer to 40%. So I’m just wondering what's happened.

Well, we have different tax rates in different jurisdictions. Tax is a pretty complex overall assessment. I'm happy to go through with it in more detail, but it is about 30% in 2011, roughly.

There are no further questions at this time. Please continue.

Thank you, operator. Thank you, everyone, for tuning in to our Q4 conference call. Just one reminder. We did mention in the press release, but I wanted to mention it now. We have a site visit, mine tour, for investors and analysts to Meadowbank, which will also be able to provide an update on Meliadine at the same time. So that's on June 28. So if you have an interest in attending that, you can contact our Investor Relations group. Thanks again.

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