Good morning my name is Chris, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle's Fourth quarter results 2018 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Sean Boyd, Chief Executive Officer of Agnico Eagle Mines, you may begin the conference.

Good morning everyone, and thank you for joining us this morning for Q4, 2018 update. Before we get into the presentation in the slide deck is a couple of slides on forward-looking statements. So please take note of those. As we step back and look at the strategy, I think, for us it's just a natural progression as we move from a transition year in 2018 into 2019, and the goals are still the same to go forward in a measured pace, manage our risks, and create a business that generates above-average returns and does it on a sustainable and self-funding basis. As we said, as we look at 2019, we're completing the expansion in Nunavut with Meliadine starting in Q2, and Amaruq starting in Q3. That sets us up for a record production in 2019, 2 million ounces in 2020 with the potential to go beyond 2 million ounces as we move beyond 2020. The nice thing about our positioning is we invested heavily over the last two years largely in the Nunavat platform. Our CapEx is going to decline significantly in 2019, coming down from roughly $1.1 billion in 2018, down to about $660 million in 2019. As we move beyond 2019 into 2020 and 2021, we would expect to have a capital spending range of between $500 million $700 million, including sustaining of about $300 million, and that's largely dependent on the gold price, but also dependent on our project approvals of the internal projects that we have in the pipeline. So there's still analysis and work to still do before we get to the point, where we're in a position to make a positive decision on several of those projects, and we'll talk about them in the presentation. From a risk point of view, we've built…

[Operator Instructions] Your first question comes from Fahad Tariq with Credit Suisse. Your line is open.

Hi, good morning.

Good morning.

I know you touched on this a bit earlier, can you clarify the reasons for the $250 million goodwill impairment charge at Canadian Malartic, were there indicators of impairment, and perhaps explain why the write-down is different from the $45 million that Yamana cited in their release? Thanks.

While going back to 2014, post the announcement of the acquisition when the exchange ratios were set, the Agnico Eagle stock went up while our partner's stock went down. By the time the deal closed then from an accounting standpoint, we were recording that transaction at a higher number than our partners were. So we had a larger goodwill number. And as we said at the start, goodwill is not amortized. We mined since 2014. So when you take the combination of a goodwill number that doesn't change since 2014 with the fact that we've mined the open pit since 2014 with the combination of having our Kirkland Lake assets now being wholly-owned by Agnico, so we take the Kirkland Lake valuation out of the impairment calculation this year for the first time. That really suggested that we should take the goodwill down by $250 million. Yamana's number, I think you said it was $45 million, so about a $200 million difference, which would largely probably reflect the added amount that we were booking going back to the time of the acquisition. And if we were sort of depreciating the goodwill or amortizing it which we're not allowed to do under IFRS from 2014 we probably would have amortized it by $250 million so it all sort of ties in.

That's helpful. Just switching gears for a second on the M&A front versus looking at your organic growth opportunities, how do you weigh the exploration potential versus what could be acquired and what are maybe high level where are the -- what's the kind of investment criteria that you're thinking about when you look at potential assets that are available, is it focusing on the right jurisdiction, the technical ability to improve operations, is that life of mine, any color…

All of that.

-- that would be helpful.

It's all of that. And I think you just have to go back to our history and our track record, going back to 2005 with Kittilä, 2006 with Pinos Altos, 2007 with Meadowbank, 2010 with Meliadine, 2011 with La India even 2014 with Bousquet that a thesis there was that there was going to be an underground opportunity and we're seeing that potentially develop out through consistent exploration. It's largely focused on trying to be early and taking advantage of, let's say, geological opportunity when we go in with our own mine building team and operators doing due diligence understanding the risks and what's needed to ultimately turn one of those opportunities into a meaningful part of our business. We basically then taking on sort of geological risk and each of those deposits has grown from the original acquisition. So those are the types of things we're looking for. It's not easy. It's a lot more difficult now than it would have been say 10 years ago to find another Pinos Altos sort of find another Kittilä. So that's why we're fortunate to not be in a situation where we're forced to do something because we've got declining reserves or declining production or dramatically rising cash flows. We've got the ability to continue to grow the business through 2024. And we're working on projects now that we own in the pipeline to see how they could impact beyond 2023, 2024. That's why we're focused on growing those opportunities to understand the upside of the existing pipeline so that we can compare and contrast those opportunities for things that may exist in the market. So we're going to approach the sort of project, the evaluation of external opportunities at our usual customary measured pace without feeling any pressure to do anything.

Thank you.

Your next question is from Mike Parkin with National Bank. Your line is open.

Thanks, guys. On Santa Gertrudis, can you give us a bit of a little more detail in terms of what your early thoughts are there and that's pretty impressive for me to 00:28:20 what's your exploration program involve in terms of are you focusing more on defining the envelop larger or proving up the resource?

We're doing both at the moment, making sure that all of the historical information is good according to our standard, adding some instill drilling in the existing resources and conducting some exploration to grow resources, while we are starting to put together some scooping and try to understand how we can advance it to the next step.

Okay. That's 00:29:09 for me. Congrats on the great quarter.

Your next question is from John Tumazos with Independent Research. Your line is open.

Thank you very much. I'm concerned about how quickly the underground zones Malartic come into production, we sure don't want you to run out an open sure don't want you to run out a open pit or have trouble keeping the mill full. What's the soonest you think you could get to 10,000 tonnes a day there and where are the hurdles in terms of documenting the inferred configuring of ramps permeating could you loan your money if they don't have enough money to go as fast as you, how can we get the ball rolling?

Well, I think at this stage there's a fairly important resource overall in the property, we're trying to find the short term benefits to accompany the current pit led for mine. But also understanding scenarios around would be the longer term underground scenarios. At this stage, it has been scenarios analysis only like trying to said earlier, we are in the early stage we'll probably provide a little bit more clarity on these aspects as we go into Q3.

But I think it's fair to acknowledge that we do expect the size of that resource to continue to grow and there's additional horizons there that have some potential we need to drill those to understand those. So it still needs a bit more work and we need to sit down with our partner and four of the other companies that have a vested interest from a royalty perspective in that region to lay out different thoughts on how we could proceed with the opportunity that exists underground.

Whether the pivot points, let's just say the underground last decades and the open pit doesn't, and the mill dropped from 55,000 tonnes or 60,000 tonnes a day to 25,000 tonnes a day in an efficient way. What is the economic cutoff of your underground only in the second decade, at a 10,000 or 25,000 tonnes a day milling rate are 2 to 3 grams economic?

Well, the ore body and the geology will sort of define the mining rate, for one. And whatever the mining rate will be, we will be in a position to adapt the mill to that capacity. So as far as cutoff grades are concerned, it all depends on the scenario and throughputs that are being selective but close to say that we'll be in a position to have a fairly interesting cutoff grade to maximize the overall throughputs.

Thank you and congratulations on all the good reserve resource and production progress.

Thank you.

Your next question is from Steven Butler with GMP Securities. Your line is open.

Thanks, operator. Good morning, guys.

Good morning.

Sean, we have several projects in your pipeline beyond 2023. Are there one or two or three projects that you rank higher in that pipeline that could see the light of day earlier than some of the others?

Well, I think the one that could have the most impact on production and cash generation was the Amaruq, given the high grade nature of it, given the fact that an underground would also impact the economics of the pit because we combine some of their originally planned pit ore from an underground. So that's the analysis we'll have more - we'll have it more complete as we move through this year. The one that we're working on as well is the Kirkland Lake, just trying to understand that opportunity. Upper Beaver, good grades, copper credit, Upper Canada growing, what are the synergies with LaRonde, we need to understand that. Upper beaver good grades, copper credit, upper Canada growing what are the synergies with LaRonde we need to understand that. Can we come in with a modest amount of capital and move that forward. So we still need to understand that one, but those would be the ones that have potentially the most meaningful impact. But I think the strategy now is to continue with a fairly active exploration program. We've had one for the last several years we're going to continue to push that we know that several of these deposits will continue to grow and then we'll allocate capital based on sort of return but also an impact on the business, an impact on business as we look beyond 2023 and 2024.

Okay. Thanks, Sean. And then certain last question what depth are you guys mining at right now at LaRonde, I guess it's just at around 3 kilometers or maybe is that lower what's your experience in terms of your dilution and temperatures et cetera and how deep does the reserve base reach?

Well, the future reserve base that was put in the guidance is that at 3.4 kilometers at this stage presently mining around the 2.93 kilometer depth we were developing just slightly below the 3.1 kilometer at this stage so as far as the working conditions are concerned the conditions in general are in good shape. We are focusing as we want to develop the reserve and depth on implementing ventalition and cooling in 2019 to pursue that development. But so far I think that's about the extent of it at this stage.

Okay. Okay. Thanks very much guys.

Your next question is from Anita Soni with CIBC. Your line is open.

Good morning, Sean and team, and congratulations on a very successful reserve resorts addition, I think that's the best one we've seen so far. My question is with regards to East Malartic, I think -- I'm sorry if I missed it, I dropped off the call earlier, but could you talk a little bit about how that interrelates with the development in Malartic and Barnat and where do you see Odyssey in that as well?

Yes. We just had an update a little bit earlier and we're still in the assessment mode as the Yvon just said a few minutes ago, and part of that is just really understanding how big it is and that is also not just total ounces, but thickness and grade of the mineralization, which drives the underground mine, will drive throughput rates. As Yvon said, we could modify the plant to adjust to whatever the mining rate would be suggested by the thickness of the ore body. So those are things that we're still working through at this point, but we have enough now to invest in a ramp to access it. The thinking now is that we're studying the structure above 600 meters. Ultimately, we know the mineralization goes below 600 meters. We believe it will continue to grow. There's a potential for another horizon there a mineral horizon, so that's the focus of drilling. But as we just said as well, we'll have to sit down as we work on that analysis with all the vested interests in the region, the royalty holders are part of the M&A and lay out different scenarios to come up with something that's optimal to justify future investment.

Okay. And then just in terms of the capital budgets and as we think about sustaining capital sort of $325 million and then development capital at $300 million, and then I think you were saying last night that in the press release that two to, going up to 2.3 million ounces. With that pushed 2.3 million ounces we incorporated within that that sort of ongoing development capital or would assuming…

Yes, yes, it is.

Yes, okay, and so that that is those were mostly Brownfield projects and if you decide to go after something that it's a little bit bigger then what…

Yes, that's the existing pipeline let me look at sort of our expanded life of mine plan which incorporates some resource into that plan over and above reserve that sort of the CapEx envelope we're looking at to try to develop these, these opportunities at a measured pace and we're trying to do that so that we can continue to move those projects forward at the same time, improve financial flexibility and hopefully continue to increase the dividend. So that's where we are, where we're, that's how it's set up.

So basically the 600-ish number and sort of and you're going to 2.3?

Yes, we said 500 to 700 and that's gold price dependent. So we think that's a, that's a sufficient envelope to allow us to move the current pipeline forward to get to that sort of 10% to 15% above the 2 million ounce number and as we go through this year we'll have some more clarity on some of the key building blocks to allow us to get there.

Okay. Thank you very much.

Your next question is from Carey MacRury with Canaccord Genuity. Your line is open.

Hi good morning. Just a question on Meliadine, just wondering what the mining rate is there right now and, and how soon do you expect it to get the full run rate?

Yes, we're still mostly in development we're generating about 12,000 tonnes to 15,000 tonnes of the element indoor per month. We will be mining roughly between two to three stops over the next quarter or so and the ramping up it going forward, but we're going to be mining at a rate of towards the target, towards the end of the year and relying on the available stockpiles that are on surface that complement at this stage.

And what's the peak stockpile you're going to have there?

Well, we've put -- at the end of January we have a 180,000 tonnes of stockpile on surface.

And before you start to mill up how big do that -- do you expect that to get through?

We expect to drive down on that as we move forward.

No. No, but it should grow between now and when the mill starts up?

No, probably not. It will try to maintain it as much as we can, but we'll start drawing down from that number.

Okay. Okay. Thank you.

[Operator Instructions] This concludes the Q&A portion of the call. I'll now turn things back over to Sean.

Thank you, Operator, and thank you everyone for your attention and for joining the call. And as always, if there is additional follow up questions, feel free to give us a call. Thanks again.

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