Ladies and gentlemen, thank you for standing by. Welcome to the Agnico Eagle's Fourth Quarter 2013 Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded today, February 13, 2014. I will now turn the conference over to Mr. Sean Boyd, President and CEO. Please go ahead, sir.

Thank you, operator, and good morning, everyone. And thanks for joining our Q4 2013 conference call. Before I begin the presentation, I'd just like to caution everyone that this presentation contains estimates and forward-looking statements. If we summarize the quarter in the year, I think from our perspective, what we could control is our operations and our costs and again, for the second consecutive year, we had a record production year, producing 1.1 million ounces of gold, which exceeded the guidance that was revised upwards in Q3 of 1.06 million ounces. We also exceeded and beat our cash costs and all-in sustaining cost guidance due to the strong performance from all of our operations. One of the big contributors to 2013 and also going forward is Meadowbank, where we had record production of over 430,000 ounces at costs below $800 an ounce cash cost. Meadowbank is set for a strong next 3 years and particularly strong first half of 2014. Reserve grades are up based on our mining experience over the last couple of years. So we've got some pleasant surprises there and we're going to have an extremely strong first half, as we said. Growth going forward also comes from the restart of Goldex where we reached commercial production in Q4 and also on the new India mine, which is expected to reach commercial production this quarter. To adjust to the lower gold price environment, we used a $1,300 gold price in conjunction with our auditors to review the carrying value of our assets. That resulted in an impairment charge aftertax of $436 million, principally at Meadowbank and we wrote off the entire goodwill on the transaction to acquire Meliadine of about $200 million. Our quarterly dividend was reduced from $0.22 to $0.08. This is the 32nd consecutive year…

[Operator Instructions] Your first question will come from the line of John Bridges from JPMorgan.

I just wanted to dig a little bit deeper to where you see reserve replacement a little bit longer term? The point being that Lapa is relatively short-lived. Meadowbank is apparently quite short-lived. And you're using the better results you're seeing from the existing operations to take production higher. I just wondered where you see the replacement for Meadowbank and Lapa coming from in a few year's time?

Well at this point, from the Meadowbank perspective, or the ability to replace Meadowbank from a production side, we see additional growth possibilities at Kittila. We see additional growth possibilities at Goldex and that's by including our resource into our reserve and ultimately, our mine plant. We see possibilities to grow our business in Mexico. But also, Meliadine, we still have to do our work. I think our drilling suggests that we have a higher-grade deposit, certainly focused on an underground. So our feasibility work is now geared to and focused on an underground scenario. And what we're looking at is getting a production base established, largely focused on the underground which lowers upfront capital and focuses on the best part of the deposit. So we see that as a possibility, but we're not in a position to make a decision on that until later this year.

Your next question will come from the line of David Haughton from BMO.

For Meadowbank, it continues to outperform. I see in the words that you've reinterpreted the book model and as a consequence, that the grade is shown in the reserves that kind of better reflects what you're mining. What's the substance of that reinterpretation?

I'll turn that over to one of the operating guys, who'll give you a sense of what we were seeing and what we try to bring into it. And I think we still try to be conservative but I'll turn it over to them.

Mostly on better understanding continuity of the super high-grade in the lands in that area, so I think it's more on the continuity and the interpretation.

Okay. With the continuity of the super high-grade, I mean, it comes and goes, very hard to pick up obviously, in widely spaced drilling. Have you changed the way that you've been doing your drill patterns or anything like that to be able to pick up these glances? [ph]

Not necessarily. I think the -- when we started mining in Goose, we recognized some of these continuity issues with the high-grade sectors. And we pursued the mining as we went through various -- as we deepened the pit. And somewhere in Q3, we started getting back at these -- some of these continuity areas and we remodeled the block model in Q4 and updated our forecast for next year. So we're pretty comfortable with the numbers that are there. Tonnes are slightly down a bit but the grade is up quite a bit.

And did the model reasonably predict the kind of programs that you got in that fourth quarter?

Yes, that's correct, yes.

Okay, that's encouraging. Second question, if I may. Over to Kittila, you've got your expansion to 3.75 thousand tonnes a day, is just in to look forward to that mid 2015. What's your thinking about taking the expansion beyond that?

There's a couple of things there. We were at the site a few weeks ago and what we're trying to do is look at how much headroom is in that 3,750 tonne number. It's a little bit too early, but there certainly are signs that there's a possibility to stretch it beyond that. So that will be Phase I and we could do that with the existing setup. Beyond that, we really need a shaft and we really need development around the Rimpi Zone where we have better grades and better thicknesses. So to go beyond, much beyond 3,750, we can tweak it up from there with the existing configuration but to go much beyond that, we need a new source of ore, which would likely be a shaft. So we've got studies underway there on several phases of a shaft, which would incorporate getting access to the Rimpi Zone and that would be supplemental or potentially supplemental tonnage at some point down the road.

And do you see that as potentially viable even with the gold price where we are now?

Yes, we do.

Your next question will come from Anita Soni with Crédit Suisse.

My question is regards to the calculations in doing reserve. What does that include when you use the $1,200? What's the cost that you embed as the offset to calculate the cutoff grade?

Anita, it was hard to hear the question. Your line was breaking up.

Sorry about that. Okay. I will talk louder. So on the reserve, when you're calculating your reserves at $1,200 per ounce. What costs are included? Are you including sustaining capital within that? And also, are you including any corporate overhead cost as well?

I'll just give you a bit of a summary. We've done some sensitivities, and the way we've done some of our estimates, we're estimating that about 89% of our reserves would have a cash cost associated with them about $950 an ounce. So you can see that there is some really profitable ounces there. It's based on the mines. Some mines have different overheads applied to it than others, but I'll turn it over to the exploration guys to provide a more detailed update.

Your next question will come from the line of Andrew Quail from Goldman Sachs.

We'll finish that answer, Anita. We'll just take this question but we'll also just finish the answer on that one.

Sean, guys, a question at the moment at Kittila and to the potential expansion, beyond the expansion, if you've done any studies on adding an autoclave as well as with the shaft, obviously with [indiscernible] it seems like a good mine, and a place to park some more capital over other places, can you guys comment on what sort of cost that would be and how far down the road you'd be in your autoclave?

Well, that's to go beyond much beyond 3,750, we would obviously have to have additional autoclave capacity. We've done some initial studies on it and the capital for an extra autoclave is sort of in the $80 million to $100 million range. So those are all part of the study and we'll have to, sort of the results of that probably in the third quarter of this year, midyear through the third quarter of this year. So all of that's being considered, shaft, ramp access to Rimpi, autoclave capacity. So the Rimpi, I think, is what can drive this, given the grades and the thicknesses, and hopefully the potential to expand the mineralization at Rimpi.

And last question, Sean. Just on the obviously Mexican tax situation is that sort of much of a deterrent for future capital allocation?

Well, we don't like it. If you actually look at it, it takes about $100 million out of our NAV. We saw a deferred tax charge, which is non-cash. But the real impact is really the cash impact, which reduces the value of our business in Mexico by about $100 million based on spot prices. But there are good opportunities there. There's a good skilled workforce. It's one of our best businesses. So we know how to do business there. But we have to -- all of our decisions are made after-tax. So any time that the tax burden increases, it could potentially impact our decisions on where we allocate capital. We do know in Finland that the effective tax rate there is about 20%. It's gone down. So other jurisdictions have gone up, Finland has gone down. So from an after-tax perspective, Finland has put itself in a position where they can stack up pretty well on an after-tax basis. So all that plays into it, but we'd still do like Mexico as a place to do business. Anyway, what I will do just before, operator, we take the next question, we didn't get the opportunity to respond to Anita's question and we'll do that now.

The cutoff grade, we used the operating cost base on using the mining cost, the processing cost and the G&A. That's the cost included in the calculation, but based on the life of mine plant.

Your next question will come from Don MacLean from Paradigm Capital.

Can you give us a bit of a sense -- and this is sort of taking from John Bridge's comment about reserve replacement. What are the odds that you will be able to find more resources at Lapa? Sean, we heard several times you said it was a short life mine. But also, very importantly on Meadowbank. Is there anything from this high-grade zone that gives us more hope into the exploration potential to add more life there or anything else, maybe, that's been found in the region for Meadowbank to potentially extend its life?

Well Lapa, if we're successful, we were just there last week, we're talking in the order of magnitude, months rather than adding years with some of the recent drilling. So maybe we have a more robust 2016 than we expected, but it's not for lack of trying. At Meadowbank, the reserve that we see now has incorporated some of the higher grade we see in the existing pit. But we did subtract some ounces out of vault and they were lower-grade ounces that we decided to take out of vault. I think it was around 0.25 million ounces or so. So I don't think -- we may mine this is out over the next 4 years at a slightly higher grade than in the reserves, that wouldn't surprise us, given the amount of visible gold and the extent of the visible gold in the structure. So we may have a more robust next 4 years. But to find more gold on the mine site or in close proximity to the mine site before we mine the remaining reserve is going to be challenging. We did have some exploration results about 50 kilometers away and they actually looked very good and we've allocated some of our drilling budget to follow up those structures. And who knows. but I would suggest that maybe there's a higher gold price that allows us to go beyond the pit, maybe take another 300,000 or 400,000 ounces, that's always been something that we've been hoping to do, but we've never really got enough continuity. So from our perspective, we just look at Meadowbank as a good solid 4 years, maybe get more production than we hope, because of the high-grade nature of what we're seeing. Some of the regional exploration, it's early but seems to be paying off. But given where we are with it and its location, even if we had a really successful drill program in 2014, started to extend the structure, it's highly unlikely we could get something developed before the 4 year remaining mine life at Meadowbank. That's where Meliadine comes into play. It's still early. But we've refocused the feasibility work to focus on the underground. There's lots of gold in that system. It's sort of, in terms of the way we play it, it almost reminds us a bit like LaRonde. LaRonde, it was important. It looked marginal. It was important for us at the time to get LaRonde built. So we built a small mine at 1,500 tonnes a day, a mine that we could afford and finance. Meliadine, we're trying to look at ways that we can get a production base established. It's an 80-kilometer green stone belt, we own it 100%. There's lots of gold, we've only drilled 10% of it. So that's where we're putting a lot of energy and time.

And maybe if I can ask sort of more of a big picture thing on the financials. In Q4, you drew down another $50 million on the line of credit. But your working capital went up, what was it, $27 million or something. So there's kind of a net addition to the debt of about $22 million. If you look at all the changes to much lower capital, you're going to save money on the dividend, but gold price is lower and operating cost a bit higher. If you look at 2014, do you think you'll be able to exit the year without having to draw down on line of credit more if prices were to stay the way they are, Sean?

Well, that's the plan. The plan was always, as we work through the budget, the strategy was to put together a plan that we wouldn't have to draw down on the debt. And as a result, we decided to reduce the dividend and reduce the capital requirements and still do the growth that we set out to the market. So we've got a good balance plan. It's a plan that works, it's very doable for us. We're hoping we can do better than the plan. We'll see how the year unfolds but we still like our position and we like our position to weather a storm if we do see lower gold prices.

Everybody loves a dividend, but it shouldn't be at the cost of the balance sheet.

Your next question will come from the line of Mr. Stephen Walker from RBC Capital Markets.

Just on La India, if you would. We see the recovery starting to increase actually [ph] 58% and 21% for silver, gold and silver, respectively. What -- how do the recovery curves look, vis-a-vis what you have seen in the column tests so far? And then, if you could comment on what you think the ultimate recoveries are going to be and whether they could improve? And then secondly, if you can talk a little bit about the water budget. And I know you had enough water, I believe, accessible for well over 16 months when we were through there last fall, but can you talk a little bit about where we stand in the water budget as well going into...

Okay, Stephen, it's Tim. I got -- you were breaking up, but I think I got most of the question. Your first question was talking about what do we do know about metallurgy at La India, how does it look compared to our expectations. And I think short answer is, pretty early and the stuff that we're -- the ore that we're stacking on the pad right now is the more of a silica cap. But every -- in sum total, the bottle oil [ph] test results we have, the hot cyanide leach compared to the fire assay test that we have and the column leads curves that we have are where I would expect them to be. So I don't see any bias either way with metallurgy. Next question was about our water balance, how's our water budget and we're fine. And going into year one with ample water supply was critical to us. Year 2, we'll have the added advantage of having more water storage and also, we'll have the saturated heap, which pulls quite a bit of water too. So year one was a critical year and we're fine and I don't expect any problem in year 2.

And your next question will come from the line of Mike Jalonen from Bank of America. He has disconnected, so we will go on to the next question, Mr. Adam Graf from Cowen.

I was just looking through the Pinos Altos guidance and it looks that on first glance, both at Pinos and at Creston that your cost per tonne numbers are rising sharply. Is that -- what's that, am I seeing that right? And if so, what's that attributable to?

Yes, you're seeing that right with respect to guidance. I think one thing I always like to look at is, what is our total operating cost in dollars, rather than dollars per tonne because on a mine like Pinos Altos, which has underground and open pit and heap leach at the middle, you can easily get distracted by the mine's high cost per tonne number and the same across the Mascota, you've got stripping ratio that affects the mine's high cost per tonne as well. Total dollars, my expectation, our direct operating expenses next year are going to be lower than they were this year. So cost per tonne, I've often said I don't think that's a great metric in Mexico.

Okay. Even when I'm sort of looking at it on your guidance, you gave specific guidance on, looks like on a mill basis for Pinos and then on a leach basis for Creston and then assuming the leach at Pinos is the same, that kind of...

Yes, the -- sorry. The thing at Pinos Altos is often our heap leach tonnes are highly variable and unpredictable because we didn't drill for low-grade heap leach resources in that ore body. And when we encounter them we process them and -- but we don't count for that in our guidance and our plans. So there's very likely to be a higher divisor at Pinos Altos and if that were the case, then our cost per tonne would be lower. But I'm still going to go back and say, I think cost per tonne is not a great metric.

Sure. And that's why there's not so much guidance as far as the leach material and grades and such at Pinos?

Right. It's highly variable. We do expect less heap leach tonnes in 2014. But we are developing the San Eligio pit for example, and already we've seen a few extra tonnes coming out of that pit. They were low-grade heap leachables, so we'll see.

How many years do you think you have left at Creston? By your resources and reserves, it looks like only a couple?

I'd better not answer because I don't remember. Off the top of my head, I'm going to say 5 and then we're looking around for more.

And then the leach at Pinos Altos, that could continue, but -- at for some time in the future, but you just can't give - you don't have a feel for it?

Well, the open pit mines at Pinos Altos depletes somewhere toward the end of this decade and we're not going to be heap leaching underground ore.

[Operator Instructions] Your next question will come from the line of Mr. Steve Parsons from National Bank Financial.

Just a quick question on Meadowbank. Signs would appear to be clear that the high-grade component at Meadowbank will enable a stronger H1 this year. Maybe you could talk a little bit about perhaps the geometry of that lens? I'm trying to get a sense to what extent that, that lens may continue at depth, whether you can pick it up when you push the benches deeper in the pit. Is it pinching out? I'm trying to get an understanding of how that will affect the future years?

We've looked at the underground scenarios and the economics at this stage, even though grades are high, the overall economics don't generate any potential to deepen the pit. And at this stage, going underground to follow the high grade vein doesn't appear to be economical as well. So that's the reality. As far as the, why the stronger grade in the period, we've also we've talked about recognizing the continuity and the grade of that area, but we've also been mining at an accelerated pace and induced towards Q4 and on to Q1. So that will be a portion of the reasons why the quarter will also be stronger and performance were stronger in Q4.

Okay. And the next question. As you apply the lower gold price to the reserves and maybe specific on the underground mines, seen higher grades but maybe also lower tonnages, could you maybe talk a bit about how this could impact mining methods? I mean, are you looking at requirings of narrow mining widths, and having sort of alter mining methods at some of the mines to accommodate the higher grades. Will that require more development, more phases in the narrow areas, can you maybe just elaborate a bit on that?

I assume we're not talking about Meadowbank anymore.

No, no, let's talk about LaRonde.

Okay. So we just completed the reserves and our cash cost profile for reserves for most of our underground mine is pretty solid. So some of them are still sensitive but the sensitivity is quite low at this stage and we're talking probably 5% to 7% if the price of gold is lowered. So we're pretty comfortable and position us to where we are now at the current reserve prices.

Right, so no change to mining methods?

No, not at all, no.

And the next question will come from Ms. Anita Soni from Crédit Suisse.

Just a couple of follow-up questions. On Pinos Altos, the development project, I'm not quite sure if you delineated what that was dedicated to the $29 million. What are you going to be spending there? On, what are you going to be spending on there?

Well, we're sinking a shaft at Pinos Altos, so that's just shaft sinking during the course of the year.

And the majority of that is the $29 million, anything else within the $29 million or is it just the shaft sinking, that's it?

Majority, the shaft.

Yes.

Okay. And then just on your tax rate in Canada. What would be the overall tax rate, what portion of that is cash taxes?

Anita, that's a bit of a moving target, obviously. But the main cash tax is still of just the Québec mining duty. So it's 16%, which shouldn't be much more than that.

And gentlemen, there are no further questions. I'd like to hand the conference back over to Mr. Boyd for closing remarks.

Thank you, operator, and thank you, everyone. We know it's a busy day, and so thanks for tuning in to our call. And if there's any follow-up questions, please feel free to give any of our guys here a call. Thanks, again.

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