Good day and welcome to the Agnico Eagle Mines Limited’s Second Quarter 2015 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Sean Boyd. Please go ahead, Mr. Boyd.

Thank you, operator, and good morning everyone and thank you for joining us for our second quarter 2015 conference call. What we proposed to do today, we posted a deck of slide but I don’t proposed to go through them one by one but I just want to caution everybody that there are forward looking statements both in the slides and in the presentation so please be forewarned and read the cautionary statements. But what we wanted to do today is give you an overview on a sense of how we are thinking about our business; where the focus is; what we are going emphasize going forward; where the opportunities are for us to improve the quality of the business. I'd like to start with the first through the second quarter and the first half and just talk a little bit about the operation we continue to get strong production, we continue to get strong cost performance, we had in line productions slightly lower a unit cost than expected with cash cost number around $600 announced. We are seeing very good results at number of our operations and we are doing this and also posting record safety performance which is I think very important because a safe operation generally means we got a very productive operation. But on the cost side we see major improvements on several of the regional operating platforms in Mexico. We continue to see record production. We see cash cost slightly below $400 an ounce that’s about a $100 an ounce improvement from the prior year. In the Abitibi our four mines there had an average cash cost in the second quarter of $622 an ounce that’s also down by about a $100 an ounce from a year earlier. In Kittila, the expanded throughput rate helps…

Thank you. [Operator Instructions]. We will now take the first question from Andrew Quail. Please go ahead.

Yes, morning, Sean and team. Congratulations on a strong quarter. Pretty easy question. Just looking at Kittila, the grade obviously dropped off a bit there versus I suppose history. Do you see that coming back in the second half of 2015 and going forward? Because, I mean, your throughput obviously, as you've mentioned, is you're going up there, and your increased capacity. Is grade going to come back?

Yeah. We'll finding reserved rate for the rest of the year. I think we had one month where grade was lower because consequence of the longer shutdown in April where we had to modify the mining sequence and bring him to lower grade scopes. We’re basically packed on sequences as we speak in back on tonnage so I think looking for great average grade for rest of the year.

Thanks a lot.

We'll now take the following question from Patrick Chidley. Please go ahead.

Yes, morning, Sean and everybody. Just a question on the follow-up on Nunavut. You did mention I think last quarter some progress that you were making in terms of thinking about power infrastructure for both Meliadine and the regional sort of plan. Could you update us on where you are on that and if you've made any sort of breakthroughs?

No, breakthrough, it’s still early. There is a number of things that we’re focused on, the energy side. One is liquid natural gas, the other is small turbines, hydropower. So those things are more longer-term and we have a recently started innovation group here in the company and there focus with our technical service and business strategy group are working at those issues, but I think that’s an important question because long-term places like the Canadian north will be place of increased activity as far as resources extraction. So our focus has been more on, is there a breakthrough either on the energy side or logistics and transportation. And if we said a multi-decade approach which we do in our business and we continue to allocate resources to looking at those key areas that we have, continue to dialogue with the levels of governments, both with visits to Ottawa and to Nunavut to talk to government official about what are particular need are given our asset base and platform that we have there. So, no breakthroughs, but we are continuing to do a lot of work.

Okay. Thanks, Sean. And just a quick follow-up, if I may, just on Amaruq and the Mammoth Lake drill results. Can you speak to how much drilling's going on at Mammoth Lake, and what these initial drill results mean? I mean, does it look a lot like the stuff at Whale Tail?

Yes. During the spring program, we moved the rigs on the western part of the trench, and what you saw in the press release, we hit on two sector, Mammoth I and Mammoth II. On the Mammoth II, we have only three holes drilled on that one, and Mammoth I probably 12 to 15 holes. And historically, we cannot comment about that as a deposit, the size, the grade. And what we are doing right now is we just finished the conversion program on Whale Tail, and we start to step out to the West and fill the gap between what we named the first Mammoth I and Whale Tail. This is the program from now. And we have a good indication that we can probably connect the Mammoth I and Whale Tail, but a better question would be what kind of grade we can get there, and how big it will be. We don't have that answer yet.

That is showed on Slide 15 right.

Yes exactly.

And Mammoth II is just waiting about one drill result there is it?

Is the other one is on the left side of the map that it shows that saturates at 13.3 gram over [indiscernible].

[Operator Instructions] We'll now take the next question from David Haughton. Please go ahead.

Got a question on Goldex, and just looking at your page 12 of the presentation, can see where the Deep 1 is with the Dx zone, or the Deep Zone. Can you just walk us through the kind of mining method that you've got, and how that might interplay, if at all, with the GEZ above it, and whether there's scope also for Deep 2?

Well, basically we're mining long haul stops at 50 meter levels, and using [indiscernible]. We've been able to produce in that around 6,500 tons per day in the last few quarters at the cost that we prescribed. And I think the unit rates that we're using on the satellite zones, on the M&E zones, are basically -- are easily replicated at depth in the Deep Zone. So, the only thing we're going to do differently in the Deep Zone is basically add an automated conveyor to facilitate trucking up the main crushing and hoisting level. So, it's just a continuity on the life-of-mine basis of the current operation.

Right. And the 6,000 tons a day, is that just to give you some wriggle room because you've been able to mine at a higher level? You'd mentioned 6,500 tons a day. Is that a possibility?

Budget wise we were budgeted for 6,000 tons per day. The team up there has been able to better that performance. And over the coming years, as we develop the deep zone, it is within our plans to continue looking at how we can optimize that daily throughput and tonnage through the plant. Also we have the flexibility in the plant to process more tons, and this Akasaba project is a satellite pit nearby that we plan to integrate, as well, and try to maximize all the install capacity that’s tried to keep low-cost profile, moving forward.

Okay switching over to Meadowbank now. The addition of [indiscernible] and the CapEx there extends the life and I guess the goal here is to reduce any high aides that might exist between completions of Meadowbank in the startup of Amaruq. Is that right you have scope also to extend life beyond Vault?

I think at this stage we looked at the recent success that of Amaruq, I think we're trying to focus on getting more flexibility moving forward in the north and maintaining our infrastructure in place and our people in place. And basically we reviewed -- Vault reserve have been in and out in the plan depending on gold prices and FX assumptions. And I think there is latest FX rate has been up Vault and now we’ve been in a position to review any rebound the line with Vault push back. And at this stage when the positions to maintain similar any of these on the [indiscernible] mines plan and gain a year to better prepared for eventuality with what that looks down the road. So it's more flexibility of the pit.

And just looking at page 16 of the presentation with the conceptual kind of open pit, the drilling results suggests greater and better hits at depth. Do you think that's enough to either start thinking about a deeper pit, or would you be thinking about an underground in addition to the open pit?

I think I can let the geologist talk after that, but I think at this stage we're more focused on a satellite pit for the early portion. If the pit at Whale Tail extends towards the West, certainly we'll be able to maximize tonnage for a few years in that area, and then we can evaluate as we continue the drilling program how the underground potential pans out.

I think one of the things from the underground perspective is that the earlier interpretation as we felt suggested that the eastern part of Whale Tail was closed off. I think the latest drill holes at depth below 500 meters which were on the eastern side of Whale Tail have changed the geologist's interpretation, and so it's wide open again to the east. So ultimately I think that that tells us is that there's probably a ramp here at some point in the future of Amaruq. And that's interesting because you know our challenge’s always at Meadowbank as we could not find anything meaningful in terms of ounces below the pit even though that was our hope. Here very early on we're getting very good thicknesses at very good grade at depths which suggest that this one has longevity and Meadowbank didn't. So those are some of the things that we need to get more information on because they have implications not just for how we think about Amaruq and its connection with Meadowbank but also how we think about Amaruq and its connection to the overall Nunavut strategy and approach to allocating capital which involve Meliadine. So there’s a lot of moving parts here and that's why we're trying to use the time we have this year to gather that information, do that assessment across a lot of disciplines including the technical aspects, the permitting aspects and the exploration upside potential.

Great, thank you for the update.

We'll now take the following question from Mike Parkin, please go ahead.

Hi, guys. I was just wondering, it sounds like you've got a number of projects advancing nicely. Is there any sense in terms of the maximum number of development projects you'd entertain at a given time?

I think if you looked at a number of these projects they're largely at or near existing operation which can be nicely tucked in to the existing team. So as far as people capacity, it's very manageable, the constraints in a tough gold price environment is obviously capital, so we'll have to make some difficult choices in terms of the pace at which we decide to move some of these projects forward. So that's more constraint than the technical ability or the people that we have to put on these projects. That's largely because a lot of that skill is in place at a number of these opportunities.

Okay. And just a follow-up on the Goldex Deep, this estimated capital for development, does that include any increase for the tailings facility?

No, we don't need to spend anything on increasing the tailings facility.

Okay, that's it from me, thanks guys.

We will now take the following question from Steven Walker, please go ahead.

Just wanted to follow up on Mike's question, Sean, with respect to capital allocation. You suggest that you're going to incrementally spend on a number of projects. If you had to prioritize which projects you'd put the first dollar of capital to work in, second dollar, et cetera, et cetera, could you maybe give us your thoughts on how you'd prioritize the various projects, whether it's looking at Goldex Deep versus the -- obviously opportunities at Amaruq and El Barqueno, and et cetera? If you look at those projects that you've highlighted as opportunities, how would you prioritize them as far as capital allocation?

We already did some of that Steve, it's a good question, with Goldex, so that was a clear winner, solid rate of return, capitalizes on some excellent work that was done and good thinking that was done when we were actually criticized. I remember being out in the road, what you're spending $90 million to restart Goldex, are you guys nuts, what the heck are you doing? At the end of the day I have to take, and the board has to take the lead from the operating and technical people and the skills and experience they bring to the table. So that one was an easy one, right in our backyard, existing deposits, near existing infrastructure that still had some excellent exploration opportunities. Where it’s less clear right now for us is Nunavut, we believe in the long term benefits of that as a place that we can add a lot of value over time, we still need information on how we fit those pieces together and how we allocate capital. Certainly Amaruq's very exciting, lots of good drilling, it is early and it is exploration and I'm sure there's going to be a lot of pluses and minuses, we're on a roll now, but we're also on a roll in Finland, I'm quite interested in that one, because that one's been which was -- which had been a bit of a head scratcher because it's large and we struggled with how do we get the throughput up and the throughput you know wasn't really a question of the plant as we’d managed that side, it was more mining rate, now if we have a zone that's extensive and parallel to main zone and now appearing near exhibiting infrastructure then maybe we can accelerate something there. And I think…

Maybe, Sean, as a follow-up question, when you went to the Board for the go-ahead to increase capital and move projects forward, what did you represent as what you thought was a reasonable gold price environment, or assumption for that to be approved, and the plan that you put forward? And second to that, and more importantly, with the numbers in terms of being high quality, high return projects, where you can put capital to work, are you prepared to issue equity or further debt -- take on further debt to finance any of these projects, or is the goal to fund these other free cash flow? And if you could kind of -- if you could answer those, I'd be curious to hear your comments.

Yeah. I think we’re using stock roll prices and that’s in local currency terms. I think one of the thing that -- as we sit here we roll it back to January of 2010. The U.S. dollar gold price was essentially where it is today but if you look at the gold price in Canadian dollar terms it's up 24%, and if you look to Euro-dollar terms it's up 24%, if you look at the gold price in Mexican peso terms it's up lot more than 24%. So given the location of our assets as we said we’ve got sort of that built in edge, so the lump deposits works not only because of a desire to minimize cost and keep a work force in place as we get better understanding of Amaruq, but also because we're taking advantage of the lower Canadian dollar. And so we're using stock with respect to that analysis as we presented it to the board and those were incremental investments that we’ll be taking forward in the second half out of our business and out of net free cash flow. If that was an easy decision to make for the board given that few of those projects extended mine lives, but some of that expenditure was to gather additional information on bigger picture particularly in Nunavut platform. As far as taking on additional data or issuing equity, we haven't made a decision on how to finance as we go forward. That will be determined on the quality of the opportunity and how do we see the ultimate fit. Now do we have debt capacity, we have some, but again it comes down to managing financial risk and we don’t control the gold prices, we control what we spend and how we spend and that’s where the focus is.

Great. Thank you Sean.

[Operator Instructions] We will now take the following question from Don Maclean. Please go ahead.

Well, thanks for the call, guys. Great quarter. Sean, maybe you could just give us a bit of your thoughts about the timing of Amaruq, and it appears there's a bit of a delicate balance here between the timing of your exploration, being able to bring the project on, trying to keep the workforce of Meadowbank in place. What are some of the critical path items? How is it going on the pace of the permitting? And how delicate is that balance, in your view, now that you've bought yourself the extra year with Vault?

While it's all permit, timeline is all permit. More Amaruq in particular and so all we’ve done is assumed a timeline that matches Meliadine essentially. But this is difference that Meliadine in our view because we're not asking to build a plant. So it should be the little bit more forward, but it does follow the same process. So we’ve just sort of use the Meliadine timelines, but we have sort of made the case to the appropriate authorities that we think there really should be no reason that there is a production GAAP because it won't be driven by our ability to get work done. As we tend to work within the time as we see it, but it's really a function of the authorities having the resources available to review our submission and that’s what really drove the Meliadine timeline. But we can't see that we have made some good progress on the exploration front, what that means for us so on the technical side, to get the permitting clock ticking we have to make a submission. So we tell them what we would like to build. We're not there yet, but we will be there as we move through the end of this year and because we will have an initial resource and that initial resource will likely put a pit design around it, we will likely go to the authorities with the plan to permit and open pit operation. And that type of potential from a permitting perspective to be ready sometime in 2019. Our focus will be trying to do that earlier from a permitting perspective, but again there no guarantee. But we've done this before, we’ve got probably the best team -- not probably, we do have the best team in the business in terms of getting permit in that region, Larry Connell who does a lot of our legwork worked from Miramar and so he’s done it several times up there. And going back to one of the points I mentioned earlier about a place to do business, it is an excellent place to do business because there is an understanding of gold mining and contribution it could make. So from that aspect there aren’t issues about people being anti-mining, anti-exploration or development. Just a matter of going through the process of obtaining those permits.

Great, okay. And that sounds like that's a capacity constraint once you've scoped it.

That right and obviously the initial vision that we get from the work that we'll have done up to the end of this year will like change because there is still a number of target. And not only they are drilling target, they're developing more target as we speak, given the geo-chemical work and the geo-physical work. So we have 115,000 hectors around Amaruq. So there is lot of work that’s going to be done over a lot of years and so we fell we'll be there lot of years. So, that's why pace is less important, what's more important is what we were building there and how we're building it. And we're less focused on when it starts or when they start and more about how we can manage both from a technical point of view and financial point of view. That’s the way we’ve run the business for a decade and we'll keep doing it.

[Operator Instructions] We will now take the follow on question from Tanya. Please go ahead.

Maybe, Sean, can you just talk a little bit about how much capacity you would be comfortable in taking on, on your credit facility, and sort of what minimum cash balance you would like to have on the balance sheet at current prices.

Our cash balance is little over 180 million. We could be comfortable at 100 million. We've had the revolver up couple of 100 million for that where we are now. We could certainly take that up if we wanted to. We're looking at extending it another year to five years. It's a relatively cheap form to financing the interest rates almost 1.9% -- between 1.8% and 1.9%. But we have that flexibility if we decide to use it, but we have been setting that down, that’s just based on generating net free cash flow.

And what about in terms of refinancing the -- I think you have $600 million senior notes that are due in 2017.

No, we have 115 million that will do in 2017. So we don’t need to refinance those notes. The biggest piece of repayment there is 2020, it’s over 300 million so over comfortable with our repayment schedule.

Okay. And then, maybe just for the CapEx, the development over the next two years, for Meadowbank, we only have what you're putting in this year, and the rest of the book, everything else is sustaining. Is that correct?

Yes.

And so, then it's really the payment for the Goldex 1 Deep?

Yes there is a little bit work as well in Mexico and we finish off some cost there. Finland, where we continue to work on the ramps and developing Rimpi, so there’s some things there as well. But there is no major project that has been approved.

We’ll now take the following question from John Bridge. Please go ahead.

Just a bit of accounting, really. I see the Mexican peso has been quite weak recently. Just wondered if there's any hedging there, or are you going to fully benefit from that weaker peso quickly? And what percentage of your costs in Mexico are locally driven?

Our Mexican Peso we’re about 25% hedged and we’re comfortable with that level. It's been weak with the CAD and the Euro as well.

I think on the Canadian dollar side we’re about 40% hedged or so going forward. In terms of Euro, we haven't done anything on the Euro. As far as the percentage of costs in Canada over 90% and Finland it would be up of 80% or so and Mexico it's 15% or so in terms of local currency.

Okay, that's helpful, thanks. What level did you assume in your forecasting for this year, or have you got that handy?

120 on the Canadian dollar. Dave do have that for Euros.

The actual budget rate was 1.35 and the Mexican peso was 12.75, so those have changed dramatically versus the budget.

The guidance that was I think 1.20 Australian and 1.08 on the Euro.

No, 1.15 on the Euro, so there is some headroom on the cost side given where the currencies are right now relative to guidance.

So there is some good news out of the strong U.S. dollar. Well done guys, congratulations.

Thank you.

[Operator Instructions], okay there are no further questions, please continue.

Thank you operator and thanks for tuning in to the call and as we said we'll be out in probably 10 cities in the next couple of weeks and with the mine tours, so we’d love to see a lot of you as we make our way around and enjoy the rest of the summer. Thanks again.

Ladies and gentlemen this concludes the conference call for today, we thank you for your participation, you may now disconnect your line and have a great day.