Good morning, my name is Sharon, and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle Fourth Quarter Results 2017 Conference Call. [Operator Instructions]. Mr. Sean Boyd, you may begin your conference.

Thank you, operator, and good morning, everyone, and we apologize for the slight delay. And we also apologize, we're having some technical difficulties loading the slides. But we hope, as we go through the presentation, that we'll get those slides loaded. They will be up on our website, so you can refer to them then. I'll get started, but this call, as normal, has forward-looking statements, so please be forewarned. What I'd like to do is there's a tremendous amount of detail in this year-end press release. I'd like to focus the call, really, on the strategy, on the big moving parts of our business and how we're positioned to deliver on the expectations that we've laid out and how we're thinking about our business certainly over the next 2 to 3 years as we execute on the growth plan, but also how we're thinking beyond that with our pipeline projects. But essentially, what we have and where we are right now, we've got a business that's performing extremely well. We've got high-quality long life assets. We've got a strategy that's worked well over a number of decades, and we're going to continue to focus and implement on that strategy. We've got reserves that are growing, grades are improving, which is underpinning the growth strategy. We'll talk a little bit about that. We're still on track to achieve our target of 2 million ounces in 2020 with the ability to go beyond that. We'll also talk a little bit about how that may look. We've got the ability to fund this growth from the balance sheet, and we'll talk about that on the balance sheet slide. But also, I think it's important to just talk a little bit about the risk profile of the business. We've worked hard over a…

[Operator Instructions]. Your first question comes from Mike Parkin from National Bank.

Just wondering if you could give us the sense of what's the shaft Kittila could do to your OpEx per tonne? Just a rough estimate, down% 10%, 15%?

Yes. OpEx are expected to be in both $6 or $7 -- EUR 6 or EUR 7 per tonne lower.

Your next question comes from David Haughton from CIBC.

Still on the Kittila shaft. Just looking at Page 22, I wonder if you could describe to us where that shaft would be located relative to the existing infrastructure?

It will mainly be over the Kittila -- over the Surri rural area. We understand the ore body's moving in the opposite direction, but the ideal locations to have the shaft would have been towards Rimpi. We're not ideal for construction purposes. So for now, we're going to be doing the shaft in that location. And entertaining [indiscernible] options later in the future as we get down below kilometer level in the next phase of life of mine.

Because just visualizing it, I would've thought that it would be further north in the existing shaft. So is it just ground conditions that mean that it's got to be in a less optimal location?

Can you repeat the question, sorry?

So just looking at the image on Page 22, I would have thought that it would have been much more further north, towards Rimpi as you'd said. Is it just ground conditions that has limited the location of the new shaft?

There's a swamp near the -- in between would be in rural and the other areas affected by tailings areas. So it was difficult to actually find the ideal location.

Oh, okay. So it's surface expressions that are the problem.

Correct.

Just looking at the CapEx, you've got 4 Kittila -- $104 million earmarked for expansion CapEx, but I note that the shaft itself, or at least the expansion project, is only about $25 million of that. What's the balance of the CapEx at Kittila then?

Well, the total project is $160 million. Broken down, roughly, $120 million -- around $100 million for the shaft, and $40 million for the mill, and there's some money for the infrastructures. It's spelled out in the press release.

Yes, I can see that. Yes. And what I'm looking at the press release is the expansion CapEx is identified to be $21 million in 2018, but when I have a look at the similar table of what your CapEx actually is in 2018 for Kittila, it's $104 million. And I'm just wondering what's the $75 million delta between the 2 of them.

This project is going to be done over four years, so it's the aggregate for '18 versus the rest of the project.

But specifically, David, for 2018, it's the tailings for the NP4 pond, the additional capacity for tailings at the Kittila site.

Okay. All right. I'll leave that to later. Just having a look at Amaruq, are you still planning to do the underground and commencing the underground? Previous plans were two years after starting of the open pit, given that you've got a new 43-101 technical study, is that still the current thinking?

Well, we're presently ramping, actually, in the exploration ramp. The collar was completed in the fourth quarter, and we're -- we've got the development plan for the next two years. We're doing some exploration on surface, but we are already there, and we're highlighting our studies to come back with some economical scenarios as our exploration data comes up -- comes available.

Okay. And last question for me. Sean, I think I heard you right, and I just want to check this, please. You had mentioned that the CapEx guidance of $650 million to $700 million 2019 through to 2020, CapEx projects not included in the guidance. It's just a place marker to keep us aware of different projects that you've got? Is that -- did I hear you correctly?

That's correct. Yes. That's correct. And really, what that is, is we've been wanting to sort of articulate how we see the business position, not just externally, but also, internally, to our teams. And basically, what we want them to do is continue to take this measured approach and how that -- they unfold is when you look at something like East Malartic or Odyssey. Well, you could make an argument that we should put a shaft there, but maybe, the more prudent approach, in terms of balancing capital out, would be to put a ramp in. And so what we've tried to do is say, we've got this ability to significantly ramp up the total margins coming out of the business, and what we want is a business that generates significantly more net free cash flow after this investment period that we've been on for the last few years. And we've got a plan that can do that, but we still need to continue to invest in the future. And that's why we've left it is a bit of a bookmark or a place holder, not just externally, but internally, to say to our team, look, we're willing to spend a bit more, but it's got to be on high-quality projects that improve the business. But we're not going to spend $1.1 billion unless you've got some real barnburner project that you come up with. But when we look at the portfolio, we look at good solid quality projects that warrant measured investment that's spread out over a number of years rather than sort of piling up in any one year to sort of get to a certain production number. And we spent a lot of time a couple of weeks ago with our top 140 people looking at strategy. And we have an option to dramatically increase this production rate in 2024, but that would involve a significant investment. We say and have concluded in those discussions it's best to sort of iron that out, flatten that out because that's a business that's well-balanced. It balances risks. It generates free cash flow, it allows for good continued investment in the business, and it allows us to improve financial flexibility, reduce debt and increase the dividend.

Your next question comes from Stephen Walker from RBC Capital Markets.

Just to follow-up on David's questions on Amaruq. Yvon, where does the cofferdam stand as far as where it is in the development plan for 2018? And I guess that leads to -- begs the question as when can you actually start putting trucks in/or at Amaruq and open pit?

Well, we're awaiting permits. The permits are on schedule. So we're expecting all of this to be completed by the end of Q2. Presently, the -- we're doing some mining in the -- in some pit locations. There's 2 quarries that have been prepared to define material for this cofferdam. So in preparation work for the material is out. And as soon as the permits become available, we'll start the construction work.

And then, whether it's in the main Whale Tail or some of the smaller satellites, is any of that material, open pit material, available? I guess when do you anticipate beginning to start the box cut into the open pits?

July, basically.

Of 2000 and...

'18.

'18, right. So could you be processing all or later in 2018? Or stockpiling material late '18 into early '19?

We'll probably get into -- or probably early into 2019, and then, we'll start stockpiling from there.

Okay. And just, again, a follow-up on David's question, on Kittila. It would make sense, I guess, it's not just sinking a shaft from surface, but you're going to be raising from underground development. At what point, I guess, would you be in a position to begin to have the underground development in place, so you can begin a raise bore process, and really start spending money in a significant way?

Mostly 2019, or actually, quite late 2018, but somewhere around there.

And then, it's just a matter of getting the underground infrastructure in place, and then, the surface installation after that. So hoisting, again, is still potentially a 2021, 2020 time frame?

Late 2020, early 2021.

Okay. Just going through the resource category, just to change direction here, Sean, for the Kirkland Lake assets now. Upper Beaver for Canada, looks like the resource numbers -- and, again, I haven't -- I can't give you the exact numbers, but they look like they were greater than what had been reported previously for your 50% ownership. Was there an adjustment in, I guess, those resource numbers? And is that a grade thing? Is it a tonnage thing? Can someone speak to that?

Yes. Guy?

Yes. Guy here. We just completed the update of the last remaining deposit over there, which is Upper Canada, where we came out with a first updated number of 1.75. So we took half of that into our year-end statement. So that was the only change in the resources in Kirkland Lake.

Okay. And is it the grades are taller, the grades changed? Or do you see opportunity for grade improvements in there? Either in gold grade or copper grade as the case maybe at Upper Beaver?

At Upper Beaver, while there's opportunity to continue the convert, eventually, when -- after we took over at -- for Canada. There's room to grow the deposit. The grade at Upper Canada came out 4.5, which is interesting. And there is opportunity to continue to grow these two deposits and we will update our plan and see how we continue moving forward on those.

And just, again, on Mexican operations here, in general, Pinos and La India. I would have expected to see, maybe more robust production coming out of those assets. And maybe, I know, Sean, you touched on it a little bit here. What's your sense on what the upside can be? Or do you think that these assets are sort of at a mature level at this point? I know La India had, basically, a fixed grade and production cycle, but what about the upside at Pinos? And through that hole, I guess, that exploration delta south of Pinos?

Yes. I think as we've moved almost solely to underground mining at Pinos, that's a mature asset. And so we switched gears a bit, and then, we started to focus on the satellite zones like Sinter, which is in the plan. And there's a couple of other zones, Reyna de Plata and Cubiro, which we're also focused on. And that was in the plans of a few years ago as we did that transition from open pit to underground mining to focus on these smaller satellite zones to continue some solid production, good cost performance there. At Creston Mascota, it's almost the same, where we have -- as we mentioned a year or so ago tied up some ground that was held by a rancher. That allows us to bring the Bravo area into production. We acquired Madrono from the same family that we acquired our work with on Pinos Altos. So that also will allow us to extend at Creston, and La India, just a step-by-step process of expanding in and around the deposit as we've expanded our land package there. So strategically, that's a business that is certainly a shorter mine life than what we're seeing in the northern part of our business. And that's why the focus has switched to Santa Gertrudis, Barqueño, but a little bit slower in developing than we would have liked. So I think the focus there is still in the short-term satellite deposits, maintain production, and look at early stage assets that we can grill and that ultimately build into production components of that business.

Your next question comes from Steven Butler from GMP Securities.

Yvon, or Sean, maybe, can you just speak to us briefly here about your justification for the shaft that Kittila, in terms of IRR, that you generated out of that in terms of, maybe, a certain gold price if you can share that with us. And I assume the returns are based on, simply, time value and the cost per tonne reduction, unless there's other changes, including reserves that were justifying the shaft as well?

No. The shaft itself was exact number in the study was around 14%, which is near our hurdle rate. And the basis of the study was maintaining the throughput rate at 2 million tones per year. Although this project is as strategic in nature towards developing further reserves down the road, we didn't integrate that and the numbers that I'm giving you at this stage.

Okay. So Yvon, so the 4 million ounces in reserves, you could have exploited those reserves with the current ramp system, without the shaft, necessarily?

Well, the reserves were sort of defined all the way to 1150 level I believe. At this stage, everything else below was uneconomical. So a part of these studies were done on past reserves for 2016. So next year, we'll probably convert more reserves with the shaft. We're churning out part of the study, and they will add better economics to the projects further.

Okay. So static reserves, you're saying? Okay. In this analysis.

Yes. But the study added about almost 900,000 ounces, which hasn't been converted yet to reserve. So this is why we're saying that as we move through 2018, there's a number of projects like LaRonde with a strong indicated resource is likely going to go to reserve. Kittila, with ounces that were added to the mine plan based on this expansion investment, but not added to reserves yet, which will come as we move through this year. So there's a number of those situations that we'll see, but I think this is partly strategic because Kittila is our single largest reserve base. It's wide open. We will have 3 sources of underground ore prior to the shaft going in, which bumps production. But this is based, mainly, on long-term decision that allows us to open up the lower part of the ore body and add to the reserve and resource base.

[Operator Instructions]. We do not have any questions over the phone at this time. I will turn the call over to the presenters.

Thank you, operator, and thank you, everyone, for your attention. And -- oh, I see there's one more question, operator. Just came on the screen.

We do have a question from Josh Wolfson from Desjardins.

Just wanted to know if we could get a bit more color on what 2019 looks like with the production schedule between Meadowbank and Amaruq? It looks like there's probably 30,000, 40,000 ounces of the current Meadowbank reserve that doesn't get mined based on that schedule. And I was curious to know when that would be processed? And how much, I guess, downtime is currently being budgeted based on guidance between the ramp down for Meadowbank and the ramp up at Amaruq?

Well, in the current reserves, and in some cases, we've added small additions in various bits in 2018 into the third quarter, was slowed down production rate to be able to redistribute tonnage into 2019 around 8,000 tones per day. And as we finished, there'll be 3 pits towards the end as we finish. So -- near phaser, vault, and then, we'll be transitioning out of the port ash pit. So that's the plan, and basically, that brings us to the start-up done in July, August of 2019, that Amaruq. So we will have the stockpiles from the beginning of the year of 2019 on surface, and we'll progressively switch from one operating site to the other.

Okay. And the actual, I guess, period, at which Meadowbank or stocks being processed? Is that immediately beforehand? Or is there an actual gap?

No. At this stage, we -- in the current life of mine -- and things will change because there's still 18 months to go. But the idea at this stage is, there's enough tonnage to basically stop one and start the other one.

Thanks, Josh. Okay. Thank you, everyone. Appreciate your attention and your patience to allow us to iron out some of our slide technical difficulties. We'll talk to you soon. Thank you.

This concludes today's conference call. You may now disconnect.