Agnico Eagle Mines Limited (AEM) Q2 2026 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, My name is Vanessa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle Mines Limited Q2 2026 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number 1, on your telephone keypad. If you would like to withdraw your question, please press star, then the number 2. And thank you. Mr. Ammar Al-Joundi, you may begin your conference.

Thank you, operator. Good morning, everyone, and thank you for joining our Agnico Eagle second quarter 2026 conference call. I would like to remind everyone that we will be making a number of forward-looking statements. So please keep that in mind and refer to the disclaimers at the beginning of this presentation. Next slide, please. My colleagues and I are pleased to report another strong quarter with not only record free cash flow generated by our operations, but also record capital returns to our shareholders. Gold production of 856 thousand ounces was for the second consecutive quarter, above budget. With cash costs and all in sustaining costs both within our guidance range. This is not a small accomplishment, in a quarter where oil traded above a $100 per barrel for much of the time. As you will hear on this call, the business is strong and we continue to move towards creating substantial additional value for our owners. This quarter, we are reporting solid operations, excellent progress on our growth pipeline, continued exceptional exploration results, all with yet another quarter of record financials. My team will go through all of this in more detail, but let me outline and summarize what I believe are the key messages that are important to take away. from this call. The first key message is that we continue to work hard every day not only to deliver what we promise, but also to continue to take every opportunity to improve our business. Step by step, quarter by quarter. For example, this quarter, I am pleased to highlight that at Macassa, we had record skipped tonnes, record mill throughput,, and the first processing of our AK4 at LZ5. At Detour, record total mine tons and record daily mill throughput at Meliadine. Record mill throughput at Kittila. Record mill throughput. Individually, these may seem like small accomplishments, but when we step back, and when we look at the big picture collectively, this quarter, we have had record mill throughput at mines representing slightly more than half of our total production. In and of itself, record mill throughput at half our mines represents substantial continuous operational improvement. But the real message we want to convey is that these improvements are an illustration of the culture, and the dedication of our teams. a culture of commitment to always do the best they can and then to look to do even better. Even when things are going well, even when gold prices are high, and even when we are delivering record financial returns to our owners. I have to tell you sincerely as a CEO, that makes me very proud. To be sure, mining is a challenging business, and Agnico Eagle is not immune to these challenges. For example, on July 1, we had a rock movement in the wall of our Barnat pit. Of course, this was a disappointment. But I am proud of our team and, importantly, of our systems and our processes including the systems and processes we had in place to track potential wall movement, allowed us to move quickly to protect both our people and our equipment. The safety of our people remains the most important thing always. I am proud that within 24 hours of the event, we had a good understanding of its impact and we were able to communicate to our owners and to the market that we were still able to forecast 2026 production within our original guidance range of 3.3 million to 3.5 million ounces. Albeit towards the lower end of that range. Agnico Eagle is not immune to the challenges common to our business, but we have a long and demonstrated history of managing these challenges well. And we have a long and demonstrated history of recovering from these challenges quickly. The second key message I want to convey this morning is that we continue to aggressively reinvest in our business into projects that deliver exceptional returns at relatively lower risk. We are making steady progress, and in many cases, we are well ahead of schedule. We have announced the go ahead of our Hope Bay mine, This will be a world class low cost mine producing between 400 and 450 thousand ounces a year that we expect to happen for decades. We had the opportunity to tour this project with our board a few days ago and while we are all impressed with the very real and substantial progress, I think what really stood out was the excitement of the team regarding the potential on these 2 80-kilometer greenstone belts. We really are just starting to scratch the surface of the potential at Hope Bay. Dominique and Natasha will spend some time talking about continued progress in moving both Malartic and Detour to 1 million ounces of yearly production, and moving forward on Upper Beaver. Another high quality low cost, brand new mine. in our backyard. Jussi, runs our Northern European business, will talk about our recent consolidation of what our team believes to be the most prospective exploration belt in the Nordic region and his team's plans to more than double that business to over 500 thousand ounces of yearly production. We are making excellent and steady progress on our target of increasing production by up to 20% to 30% over the next decade and that target was before the Finland land consolidation. We have the strongest pipeline in our history, We have the strongest pipeline in the business. And there is more to come. We are only in the 3rd or 4th inning here. We remain long term bullish on gold, and we are and we remain focused heavily focused on steadily increasing gold production per share for years and for decades to come. The third key takeaway is again, continued exceptional exploration results. Exploration is the lifeblood of our business and Guy will spend some time going over some exciting holes that are both confirming and expanding our key mines and our organic growth projects. As Jamie, our CFO, likes to say, we are in a gold price environment where with strong operating performance, and with good cost control, we are able to do it all. We are able to reinvest in our business to support the best organic growth in the industry This quarter, we invested over $800 million in an advancing key projects and in capitalized exploration. This quarter, we were able to opportunistically pursue strategic M&A opportunities that add value per share and that improve the quality of our business. This quarter, we consolidated the best land package in Northern Europe including using almost $600 million in cash. We continue to strengthen the balance sheet in the second quarter, we added over $350 million of cash to reach a record $3.5 billion of cash on hand. All of this while delivering another record quarter of returns to our shareholders. In the second quarter, we delivered $625 million to our owners, between our dividends and our $400 million of share repurchases. Second quarter of 2026 has been volatile. Volatile geopolitically, volatile economically, and certainly volatile gold prices. But even in this environment, our team was able to deliver the steady reliable performance that Agnico Eagle is known for. Delivering solid results across the business. but before I turn this call over to the rest of our team, to talk about this in more detail, I need to spend a moment to talk about the very sad fatality we had since our last call. Daniel Gero, partner of Michele, and father of 2 teenage girls, tragically lost his life while on the job on May 1. Every fatality is devastating not only to the families involved, but to all the people they have touched in their lives. Including friends and colleagues here at Agnico Eagle. In the almost 70 years of operation from 1.96 thousand to today we have had a total of 23 fatalities and 3 of these have occurred in the last year. I will repeat what I said last quarter, Fatalities, every single 1, Is not acceptable. I want to assure all you and more importantly, I want to assure all our people who come into work every day working hard for the company that we are more focused on safety than ever and that taking care of all of you remains our number 1 responsibility. Again, and with great emphasis there is nothing more important than the safety of our people and of our communities. I will now ask James R. Porter, our CFO, to discuss our Q2 financial results.

Thank you, Ammar. This was another solid quarter for Agnico Eagle. Reflecting our high quality asset portfolio, solid operational execution, and continued leverage to the gold price. Strong operational performance and disciplined cost management combined with a favorable gold price environment to drive record free cash flow of over $1.3 billion for the quarter. We also delivered excellent financial results. Generating adjusted net income of approximately $1.5 billion or $3.07 per share and adjusted EBITDA of approximately $2.7 billion. Gold production was ahead of plan at 856 thousand ounces, reflecting a very strong finish to the second quarter. This outperformance was led by Detour Lake, Kittila and Fosterville. Reflecting the benefits of continuous operational improvement at these sites. We are extremely proud of the work of our teams who remain focused on productivity initiatives operational optimization, and disciplined cost control. These efforts translate into another quarter of solid cost performance. Total cash costs were $10.54 per ounce, and all-in sustaining costs were $1.46 thousand per ounce. Below our costs in the first quarter, below the midpoint of our guidance ranges, and hundreds of dollars below the industry average. This cost control is particularly impressive given the inflationary pressures. We are seeing across the industry. Overall, our business continues to demonstrate the consistency and resilience that have long differentiated Agnico Eagle, allowing us to translate strong gold prices into record cash generation and record shareholder returns this quarter. We turn to Slide 5. We remain in the strongest financial position in the company's history. Our strong balance sheet and record cash generation allows us to maintain a balanced and disciplined approach to capital allocation. Creating value through shareholder returns, investment in future growth, and continued financial strength. As Ammar mentioned, and I like to say,, we are in a gold price environment where we are truly able to do it all. We generated approximately $3.5 billion of operating cash flow in the first half of the year. Approximately 30% of that was returned to shareholders through dividends and share buybacks. With a record $625 million of shareholder returns in the second quarter alone. Nearly 40% of the operating cash flow year to date was allocated to sustaining and growing our business through investments in our organic pipeline. We invested over $800 million in capital expenditures and capitalized exploration second quarter alone. Advancing our 5 key value driver projects will support long term production growth. Of 20% to 30% over the next decade. Another 15% of our cash flow was used to support our acquisitions in Finland. Again, these acquisitions strengthen an already high quality regional business. And create additional opportunities to generate value from our established operating presence in the region. Which Jussi, our vice president of Europe, will discuss later in the presentation. The remaining 15% of our operating cash flow was applied to continue strengthening our balance sheet. We are paying healthy returns to our owners, while positioning the company for long-term per share value creation. Our balance sheet continues to grow stronger At the end of the second quarter, our net cash position increased to approximately $3.3 billion, reinforcing our position of having 1 of the strongest balance sheets in the sector. This financial strength was recognized in April when Fitch Ratings upgraded Agnico Eagle's long term issuer default rating from BBB+ to A-. At the beginning of the year, we set a target of returning approximately 40% of free cash flow to shareholders, Through the first half of the year, we have exceeded that objective. Returning approximately 48% of free cash flow through dividends and share repurchases. Given our strong free cash flow generation in the current gold price environment, we see the potential to exceed our original target for the full year. During the quarter, we monetized a portion of our equity investment portfolio, creating additional flexibility to accelerate share repurchases. We continue to view buybacks as an attractive use of capital. And again, at current gold prices, we see the capacity to continue to buy back shares while investing in growth and maintaining a best in class balance sheet. Overall, we are exceptionally well positioned in the current gold price environment with record cash flow supporting record shareholder returns, continued balance sheet strength, and ongoing investment in our industry leading growth pipeline. This balanced approach remains a key differentiator for Agnico Eagle, and positions us well for long term value creation. With that, I will turn the call over to Don.

Thank you, James. Good morning, everyone. In my section, I will cover the highlights for Quebec, Nunavut, and Finland. Overall, the quarter ended in line with the plans and it is great to continue to see all initiatives ongoing to control costs. In Quebec, Canadian Malartic is facing more challenges but thanks to the team, led by Daniel Serge and Justine for their management of those challenges and their dedication. Overall, Canadian Malartic finished the first half on target. Even with some challenges. Concerning the Barnat pit wall, I will explain what are the next steps. First, all the rock that moved from the wall, approximately 1 million tons, is going to stay there. So the first step is to build some safety berms to allow us to get back to mining in the Barnat pit. Second is to build access ramps. We already built 1 along the south wall to get back to that mining area. But we still need to build some access inside the pit and also to finish the berms. The berms height will be between 15 and 25 meters high. to catch if there is ever other rock that is going to come from that located area. So we are planning to do those mitigation in Q3. And We expect to resume mining in Q4. For Nunavut, the first half of the year production is also on plan, Good news, The spring migration is over, and it went very well. Today, 6 of the 19 vessels are already received. from our sealift, and an interesting highlight Ammar mentioned, Meliadine achieved a quarterly record of over 7 thousand-ton-per-day average during the quarter. The target was 6.5 thousand. For Finland, Kittila delivered an excellent quarter both on production and cost. Thanks to the entire team for their outstanding accomplishment. It is especially timely as we are expanding our presence in Finland. It is good timing to give them a bigger playground. Jussi will provide more details shortly. On the optimization initiative, I would like to highlight the LZ5 team that keeps improving the performances when we do autonomous trucking. During the fully automated shift, which are Friday, Saturday, Sunday night, our employees would rather be at home, this is when we do automated tracking. Or mining. They managed to increase the productivity by 65% in the first half of the year So 65 more tons hauled by shift by the truck. They did that by improving the network communication, the software, but also better technology using a scanner that can see or analyze in 3D instead of 2D. That reflect in the past, we had to do actions or to stop the sequence 1.7 thousand times per shift Right now, it is down to 700, and it keep improving. Good job, team. Next page. On the project pipeline at Malartic, we continue to advance our field and mill vision to potentially grow the annual production towards 1 million ounces per year. 2 important milestone We completed the first phase of the shaft sinking 3 months ahead of schedule. The last bench was taken on July 9 reaching approximately 1.6 kilometer underground. So now we are moving to the ho hoist changeover to get back to the production mode. that is gonna start this is starting in Q3. And we are still planning to start the commissioning of this production shaft in Q2 27. Another important milestone, we extracted our first 2 stopes where the second stope is still ongoing, And then the team is going through that typical learning to that first mining phase. We will mine another 4 stopes during the rest of 2026. And we are planning to mine 30 in 2027 and above 90 in 2028. So you could see the ramp up and this is why we need the production shaft to take those tons at the top. At Hope Bay, we have reached our target of the detailed engineering, which was the trigger for us to give the green light for construction that we did in May. I have the privilege to work with a great team led by Christopher, led by Kishan, led by Marc-Andre, and also working well with the exploration guys with Conrad and Ashley who worked together to develop a very strong study And this is where we are we know we are gonna deliver that project well. I am I am really confident we are going to deliver that project safely. On time, and on cost. We had the privilege to also expose the project and our people to the board of director earlier this week. Still a lot of work to do, but we are in good position. And why I feel we are in good position? Because today, we are over 70% of the engineering completed. Because the team that are building it planning it, I have already did Miladine Meadowbank, and Amaru project in the Arctic. And we have more than 15 years of experience build operating into the Arctic. 1 of the critical path of the project is the logistic, and currently, we are ahead on the delivery at Becancour of receiving the material, which is the port where the vessel are starting. And the first vessel is going to leave the port to Hope Bay on the next weekend, the coming weekend. So around August 10, it should be at Hope Bay. So we are on target. We are gonna have 9 of those vessels going to the to WholePay. Also, as you could see in the picture, there is 3 new wings. The camp is ready. That we could ramp up the workforce. And, also, the construction schedule is from what we learned where we are going to close the building before the winter and work internally. And on top of that, right now, we see a good quality of contractor from the construction site We are looking more to the West, so half of the crew of the construction is now coming from the West. We really welcome, those new resources. And this is helping us to deliver that. So Guy will give you more information on what we see into the exploration, but Hope Bay is a world-class deposit and, in the hands of a world-class team. Hope Bay will create value for decades to come. for shareholders, employees, and the Nunavut community. On this, I will pass the mic to Jussi, who will talk about our Finland hub.

Thank you, Dominique, and good morning, everyone. I am Jussi Saaskilahti, vice president of Europe, and I have been leading our European business over the last 10 years. Today, I will talk about our Finland platform and our growth plans in the region. As you know, Kittila Mine is the largest gold mine in Europe, And even after 17 years of operation, it still has substantial upside potential. Marr Zone exploration continues to deliver exciting results. The deposit remains open both along strike and at depth, and I am confident that Kitila can continue operating for another 20 years. Investment programs, including Shaft, mill expansion, and surface infrastructure investments were completed in 2023. After that, we have focused on operational excellence, cost control and productivity. Our results are very positive, and comparable cost per ton excluding royalty and mining tax, in 2025 was lower than in 2024. And, again, first half of 26 unit costs are lower than first half 25. Maintaining a declining unit cost trend despite inflationary pressures and a deepening underground operation is not easy, and is clear evidence that systematic productivity work makes a difference. 1 recent example of productivity gains in Q2 was all time high mill throughput which helped us to achieve all time high revenue, operating margin and cash flow in the history of Kittila. All in all, I think that Kittila is in the strongest position it has ever been We have an experienced management team that has worked for Agnico for years. Gaining experience not just in mining, but also building strong relationships with local authorities, communities, and other key stakeholders. Based on that experience, we believe we are in a good position to move forward with growth opportunities also outside of Kittila. Over the last 10 years, Agnico has made several strategic investments in promising exploration and development companies in Finnish Lapland, strongly strengthening Agnico's strategic position in the region. In Q2, the time was right for a more significant consolidation transaction, which will solidify Agnico's position in Finland for decades to come. Based on years of work, and thorough analysis, our conclusion was that the best potential for value creation can be achieved by acquiring 3 companies Rupert Resources, Orex Minerals, and the Fingold JV. As a result of these transactions, Agnico gained a very strong position in the Central Lapland Greenstone Belt, which we believe is 1 of the most prospective areas for gold exploration. In addition to a highly prospective land package covering approximately 2.5 thousand square kilometers, A key component of this transaction is the Ikari project which is the most significant gold discovery in Finland since the Kittila mine. In June, after closing the transactions, we welcomed 44 new colleagues and the integration work has started very well. The most important priority is that the field teams begin working seamlessly together while we also continue integrating business processes and systems. At Ikkari, consolidation transactions removed prior property boundary constraints, and we are now working on project optimization, including unconstrained open-pit scenario. We expect the results of the optimization work will be available by the end of 2 thousand 27. Condemnation drilling to support surface infrastructure planning started in June Exploration drilling will continue near the Ikkari deposit with 3 diamond drill rigs in August increasing to 5 rigs by the end of the year. In addition to the project optimization and exploration activities, we are also advancing work on the environmental impact assessment and land use planning. Overall, we see great potential in Finland By optimizing Kittila, advancing Ikkari, and unlocking the exploration upside across our 2.5 thousand square kilometer land package We are building a business with the potential to grow towards half-a-million-ounce-per-year platform. Our team is excited for this opportunity and has the ability and the experience to deliver on the vision. With that, I will pass the call over to Natasha.

And good morning, everyone. I will cover the operational highlights for Ontario, Australia, and Mexico. So the regions delivered another strong quarter led by excellent performances at Detour, Fosterville, and Pinos Altos, all of which exceeded the plan. The results reflected the operational and cost improvement efforts underway at each site all aimed at extracting the full potential of our assets. All the initiatives that Dominique spoke about, they take time. They take effort. They take persistence. By the sites to implement, and now we are seeing the benefits of that work. With the records achieved this quarter. We just wanted to say thank you to all our teams across the operations for their commitment in driving these results and for continuing to create long term value for our shareholders. So now at Detour, we achieved another consecutive quarterly record in tons mined, and this is the result of the productivity initiatives started last year, which are now paying off. An example is increasing shovel productivity by increasing the amount of blasted material inventory that is available. Also getting that higher shovel productivity by diligently improving on our loading practices Detour also had a record in tons per day at the mill. As a result of incremental improvements, now that the plant is operating at a stable state. Couple that with their lowest total medical aid injury frequency in the first half, and it is made for a very, very strong first half for the site. And also at Detour, we continue to advance initiatives to improve our overall mine to mill performance. We have the newly created integrated operating center, the IOC, at Detour, aimed at improving the decision making process by connecting the mine operations, the mill operations, the planning, and the maintenance. Basically, the IOC is an operational hub. The initiative here is to break down silos, to integrate people, to integrate processes and technology, to enhance our safety, to enable quicker, better decisions, and to help optimize performance from the mine to the mill. Over at Macassa, the mill delivered another quarter of record throughput. Which was expected as the team continues to work on optimization efforts as we ramp up towards 2,010 tons per day by the end of the year. Fosterville also performed well. The commissioning of the primary fans underground in the first quarter and significant step changes in development in the 514% increase in development rate year over year. This improvement, it reflects a number of productivity initiatives that started last year, which includes improving the ventilation system, training and retraining our operators, and enabling independent blast when we can. Together, these initiatives are increasing the development productivity, but it is also increasing our operational flexibility by opening up more mining areas and positioning Fosterville to sustain the highest throughput rate in the mill in the coming years. And these are just a few examples of our ongoing focus on productivity and operational improvement. what is particularly encouraging is that many of our initiatives that I talked about today are still in their early stages. And we see additional opportunity to further optimize and improve our overall mine and mill performance in the periods ahead. Now moving to the next slide, I will give you an update on the projects in Ontario and Mexico. And I will start with Detour and the site's progress towards becoming a 1-million-ounce producer annually. And, of course, the Detour Underground project plays a big part in this plan. So we are still in the early days of the project, but we are making good progress. And we are advancing on schedule. We continue to advance the expiration ramp and have achieved just over 1 thousand meters of development, reaching a depth of 180 meters. We also continue to excavate the overburden for the conveyor portal near the mill. And also progress on the camp expansion. As well, to complement the bulk sample that is planned, we continue to progress with the high intensity drill program. In an area, we are also considering to mine as early as 2028. And Guy will speak to this program shortly. Over at Upper Beaver, progress on both the exploration ramp and shaft continued this quarter The ramp development coupled with the lateral development has advanced over 600 meters in the quarter, reaching a depth of 165 meters. Shaft sinking, which commenced in the fourth quarter of last year, it reached a depth of 470 meters. And the high intensity drill program that is focused in Upper Beaver between the 500- and 600-meter depth That was also completed during the quarter ahead of schedule, and we now have an improved understanding of the mineralized zones in this area. So following these results, we are now evaluating the potential for an expanded exploration program by extending the shaft to support infill drilling and possible mineral resource expansion at depth. And finally, over to San Nicolas. We are very happy to share that we reached an important milestone The joint venture received the approvals for both the change of land use and the environmental impact assessment permit. This now allows the joint venture to advance on supplementary permits needed before construction can commence. And as part of that, the JV, of course, will take into account the terms within the EIA approval. And in parallel, the JV will also continue to advance detail engineering and work on critical infrastructure to reduce the execution risk and better refine our capital cost estimate. The team will also work to accelerate construction and operational readiness activities to position the project for a potential sanction decision. Overall, we continue to make really good progress across our projects this quarter, and we remain really excited about the significant exploration upside emerging across our portfolio. With that, I will turn the call over to Guy.

Thank you, Natasha, and good morning, everyone. We had another very strong quarter in terms of exploration drilling, safely completing almost 400 kilometers of diamond drilling for the year for a year to date total of 760 thousand meters. Having 126 drill rigs and operational mine site our key value driver project. Well on our way to achieving our ambitious budget of 1.4 million meters for the year, aiming to replace and grow our global mineral reserve and resources per share at the end of the year, as we have been doing for the last several year in a row. Diving now into some specific project on slide 11, In Malartic, 21 rigs are in operation. Completing almost 61 kilometers of drilling in the second quarter. And close to 140 kilometers year-to-date from underground drill platform as well as surface drilling into the extension of the East Gouldie deposit. Some regional targets around Canadian Malartic, and the adjacent Marban project. We continue to get strong exploration result in the East Gouldie deposit at depth with 3.8 grams over 19.2 meters in hole 354 at 1.95 thousand meters below surface. In the lower portion of the deposit. And the upper eastern portion of East Gouldie, as well, in Drill Hole 62 with 5.1 grams over 14.3 meters at a 915-meter depth from level 75. To the north, in the Odyssey internal zone, we continue to get very exciting result in a structure known as the Artemis Zone in Hole 13, drilled from underground at Level 57, with multiple intercepts reported with the most significant returning 13.7 grams over 14.6 meters core length. At around 1 thousand meters below surface. Supporting our view, of additional exploration upside from the internal zone at Odyssey close to the mine infrastructure as we continue to add drilling from underground. On the adjacent project, at Marban, 4 drill rigs completed 100 drill holes year-to-date. Continuing condemnation and some exploration drilling, to confirm the potential location of the surface infrastructure related to the project. Now on slide 12, at Detour Lake, Completed close to 53 kilometers of drilling in the second quarter. For a year to date total of 92 kilometers of drilling. Drilling was dedicated to advancing the high intensity drilling program in Domain 54 and to exploration close to the exploration ramp and continuing the resources expansion towards the West at depth. And Domain 54 close to the exploration ramp west of the open pit. High intensity drilling is aiming to confirm the geological resource model by reducing the drill spacing to 20 meters. Some strong results were reported such as 2.5 grams over 62 meters. Including 15.2 grams over 5.9 meters in Drill Hole 1.13 thousandA at a 275-meter depth While in the exploration in the western extension of the deposit, towards the current extreme west of the ore body, Drill hole 1.29 thousand returned 20.8 grams over 4.8 meters. At around an 840-meter depth, With a deposit that remains open towards the west and at depth. And finally, at Hope Bay on slide 13, we have drilled close to 37 kilometers of core in the second quarter, with 6 drill rigs, for a year to date total of close to 70 kilometers ahead of our budget and well on our way to complete and exceed our 110 kilometers of drilling budgeted at Hope Bay for 2026. We were on-site earlier this week. As mentioned by Ammar and Dominique with the board, and it was exciting to see some passionate people and the large number of exploration targets that are being developed. On the entire belt supporting our view of major long term potential for this belt. Resources to reserve conversion in field and exploration drilling in the Patch 7 area continues to be the priority with, again, some very exciting results such as in drill hole 478 that those of you who were around the project announcement in May got to see on the table at the core shack. We got the results. And we got 28.8 grams over a 21-meter core length. in that drill hole. Including when considering capping and estimated through width, it is about 15.2 grams over 15.6 meters, but it shows how spectacular locally. Grade could be. And, so it is quite significant to see those multiple double digit grade and double digit meter width. In that patch event area. I am also pleased to report that we have remobilized 2 drill rigs at the Boston deposit and have reopened the camp with the aim to complete 7 thousand meters this year. All of the drill holes so far that we have seen visually respond report strong visible mineralization with assays expected to be available for the third-quarter news release in October. So stay tuned for some more good news coming out of the exploration at Hope Bay. And before passing it back to Amar, I would like to comment as well on the Finland consolidation. I share Jussi's excitement and the team enthusiasm around the acquisition We are starting to ramp up activity with some condemnation drilling already underway. And expected to have up to 5 drill rigs by the end of the year to initiate the investigation. Of the extension of the known ore body as well as the numerous exploration target. On the large land position. And I would also like to take the opportunity to welcome our new colleague from Rupert and Orion Resources who have joined the Agnico Eagle team in our quest to test the full potential of this underexplored greenstone belt that we consider to be the most prospective belt in Northern Europe. And on that, I will return the microphone to Amar.

Thank you, Guy. Very, very exciting stuff as always. Well done. And thank you to the rest of the team and to all of our people for delivering another strong quarter. As you can see, we continue to work hard for all of our stakeholders and will continue to build off the same foundational pillars that have defined our strategy and have served us well for almost 70 years. We will continue to focus on the best mining jurisdictions based on geologic potential and political stability. We will be disciplined with our owners' money, making investment decisions based on technical and regional knowledge creating value through the drill bit, and through smart acquisitions where and when it makes sense. We are uniquely well positioned with a high quality project pipeline leveraging existing assets in the best regions in the world where we believe we have a competitive advantage and importantly, we will continue to be focused on creating value on a per share basis and on being leaders in our industry and returning capital to shareholders as evidenced by over 43 years of consecutive dividend payments and increasing share buybacks. We have a clear and executable strategy to create additional value per share for our owners for well into the foreseeable future with manageable risk leveraging off existing infrastructure and regional competitive advantages. We have the assets, We have the projects. We have the resources. And we have the people. We are making it happen right now. We will stay focused. We will not be distracted. Thank you again for joining us on this call and for many of you thank you for decades of trust and support. We will always work hard to maintain that trust, and we will never take it for granted. Operator, may I now ask that we open up the call for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number 1 on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process,, please press the star followed by the number 2. And if you are using a speaker phone, please lift the handset before pressing any keys. And we have our first question from Joshua Wolfson with RBC Capital Markets. Please go ahead.

Yes. Thank you very much, operator. Just going back to Barnat for a moment. You talked about the 1 million tons of material that slid. Is there any way the company can quantify the volume and grade of material that would be inaccessible as a result of that slip? Well, we disclose that there is 370 thousand ounces that will not be accessible anymore. which is 60 thousand 80 thousand and 230 thousand in 2026, 2027, and 2028. Let's say the remaining ounces in the Barnat pit is approximately 300 thousand ounces. That we are going to mine. I do not know the tonnage and the grade, but I do not know grade average grade in Barnat is around 1 to 1.1. Okay. And then when you think about, maybe beyond remediation, but any potential offsets is there any way to incorporate more low grade material in the mine plan to offset some of the impact over the course of the next 3 years. And even maybe beyond that, are there other assets in the portfolio that are being maybe rethought in some way to look at offsets. Thank you.

Well, maybe I will jump in there, Joshua, and thank you for the question. So clearly, we are going to be milling the low grade stockpile. So the mill is going to be busy. We are going to be able to get back into parts of that pit. But I think it is worth noting, to your point of offsetting, That pit has already produced a lot more gold than the original plan had. The team has done a really good job of looking at opportunities And, you know, based on everything you have heard, we are not only finding a lot more gold throughout the company. We are also improving our operations on a on a continuous basis. So you know, it is disappointing. We are at the very end of the mine life for that pit. The team did a did everything right. And as I tried to say on the call, we do have a long track record of, recovering from, from these operational issues when they happen. Great. Thank you very much.

Thank you.

We have our next question from Bennett Moore with J.P. Morgan.

Good morning, Amar and team. Congrats on another strong quarter and thank you for taking my questions. Maybe a question for Guy, but I was wondering if you could unpack the drill results a bit further. They looked quite positive, the upper eastern extension and the Artemis zone. I believe this is near existing underground infra. So I am wondering if there is potential opportunity with more drilling to bring forward some of these higher grade zones in the production profile.

Yeah. Thanks for the question. To start with, in the upper eastern portion of East Gouldie, that is an area that we had identified earlier as a higher grade infer that we are kind of focusing to convert. And that area to the east, as we have discussed a few times, could offer, let's say, maybe another mining area in the upper part of the mine. So that is currently why we are kind of focusing on this specific area being, you know, closer shallower into the ore body, closer to the current infrastructure we are having. So this is why we are making a big push to, you know, bring it to reserve progressively, and we are gonna see some addition as well at year end in this area as well as in the internal zone.

The internal zone are a bit more subtle. We know that there was some potential in between the Odyssey North and Odyssey South. it is just that now that we are underground with all of the access, and we can conduct more drilling and field drilling, We are starting to better understand the geometry of these zone in order to start putting additional thinking on how to approach them and mine them. But as you described, they are also fairly close to the north of the shaft, so they will provide, optionality and other mining potential mining area in the near future. And this gets exactly to the question about how do you replace things? I mean, if you know, a Malartic is sort of unique in that there is a lot of gold and as we expand the underground. and this is early, this is just us talking, so do not put it into your models yet. But you know, to the extent you have high grade, underground ore close to surface, that is accessible in shallow areas of the operation you can move more of that high grade tons into a mill and you know, if you are bringing in stuff at 5 grams and you are displacing, you know, the stockpile stuff at 0.5 grams, it does give you an awful lot of flexibility. Again, it is it is very early. But it does show you the quality of the asset and the quality of the thinking on the team's part.

Thanks for that color. And then real quick on San Nicolas. it is nice to see the EIA and land use permit come in. I was wondering if you could walk us through where detailed engineering stands, if there were any contingencies tied to the approval, and how we should think about next steps in terms of permits and studies. Thank you.

Thanks for the question, Ben. Yes. So really, the joint venture is very much appreciative of working with the with the Mexican authorities as they conducted a very thorough assessment of the process and ensuring that our partnership is will be committed to the responsible development, the construction of San Nicolas. That being said, it is a fairly large document. The approval process. The approval. So we are looking at understanding the terms of the approval, so that is gonna take us some time before we apply for the supplementary permit. In the meantime, though, we are continuing to advance the engineering to derisk the project. it is currently at 45% engineering. And the same time, we are continuing to accelerate the construction readiness plan, the activities associated with that. The operational readiness plan for that for the project to ensure that we have, you know, all the processes in place, ensuring that we have the resources in place before we make that decision to sanction. Thank you. Best of luck.

Thank you.

Our next question is from Fahad Tariq with Jefferies.

Hi, thanks for taking my question. 1 of your peers talked about increased labor costs and contractor costs in Northern Ontario and I saw in your release, there was a mention of just higher labor costs, but that is more year over year. Can you just touch on what the labor dynamics are looking like in Ontario specifically? And if you have the latest numbers on retention rates, attrition, etcetera, that would be super helpful. Thanks.

Yeah. Sure. I can start that. So with Ontario, we in terms of our internal labor, we are running around a 4% year over year increase. In terms of our you know, just in general, workforce is a challenge across our operations, and so we have a focus on retention on and we have a recruitment hub, a centralized recruitment hub to ensure that we have provided the team with a detailed plan, and we on our detailed growth plan on specific personnel that we are looking for, and we are working actively to hire them internally. Of course, that being said, we do have a focus in on bringing in contractors wherever needed. In terms of our contractors, nothing major in terms of increased to our labor cost on that end. Not that I see.

And I would add, and, Fahad, that is a very important question. We have here at Agnico, and we have been in these places for decades, you know, labor's gonna be a challenge over the next 10 or 15 years. And we have put a lot of effort into it. As you know, you know, we have the lowest turnover of any of our peers. We probably have half the turnover of our peers, and actually, the turnover over the last year, we have we have reduced it. But we are going beyond that. I will give you some examples. You know, with regards to getting people up there, sometimes there is no housing. So we are working on projects where we are actually building permanent homes in communities. Not just camps where people come and go after their shifts, but permanent homes in communities That will help attract people We have mentioned that, in places like Hope Bay, you know, the team has done a great job accessing not just the usual pools of people we get, but we have really put a big, big push to recruit from Western Canada, and we have had excellent results. So it is a good question. It is going to be a challenge for everyone. I think Agnico is doing a really, really good job of getting ahead of that. Okay. Great.

Thank you very much.

We have our next question from Richard Garchiturina with Barclays. Please go ahead.

Great. Thanks. Good morning, Ammar and team, and thanks for taking my question. If I could just circle back to Canadian Malartic. You took the cash cost guidance up for the rest of this year, for the second half. Just wondering how we should think about cash costs across the portfolio to mitigate that. And then also just going forward to 2027 and 2028, does the higher cost in the second half of this year have any impact going forward? Thank you.

Yes. Thanks, Richard. it is James here. I will address that question. Yes, very strong cost performance in the second quarter. We did take the cost guidance at Malartic up for the second half of the year, but we are seeing you know, a much stronger US dollar than what we budgeted and guided at the start of the year. So we are getting the benefit from that. You will recall that we also guided at a $4.5 thousand gold price, so we are seeing a bit of a hit on cash cost with respect to royalties. And, you know, thirdly, with respect to buy product credits, we have more conservative assumptions on our copper and silver pricing. So those are all helping. You know, we are actually in the process of our you know, multiyear budgeting and planning process now. So it is it is premature to comment on future year costs, but you know, we obviously will see slightly higher costs at Canadian Malartic given less production through 2027 and 2028. But on an overall basis, again, we will do what we can to offset inflation through, you know, continuous improvement and other efficiency initiatives.

Great. Thank you. And then as a follow-up, you maintain the target of million ounces from Malartic. The Barnat incident impact the cadence in terms of how you get there? Are you looking at some changes to the sequencing of anything at the other deposit or the other pits? How are you thinking about that bigger picture?

Dominique speaking. No. It is completely different deposits. there is no impact from the wall of Barnat to the future Odyssey underground. Barnat for Marban and that pit was running out, as everybody knows.

It would have run out in advance of the million ounce worth that will be in the early thirties. Great. Thank you.

Thank you.

We have our next question from Lawson Winder with Bank of America. Please go ahead.

Thank you, operator, and good morning, Ammar and team. it is nice to hear from you all, and thanks for today's update. I guess probably where I would start would be on Detour. So in these results, you have again mentioned the potential to deliver some underground production in 2028 instead of the 2030 date in the last technical report. I guess it would be helpful to get an idea of how material that could ultimately become. But then you also mentioned an updated mine plan for 2027. What quarter in 2027 would you be anticipating putting that out?

Hi, Lawson. In terms of, sorry, the first question was on the ounces. The ounces. Sorry, the ounces was yeah. For Detour Underground, when we look at it, it was we are looking at maybe 20 thousand to 30 thousand ounces. For 2028 and 2029 each year. And with respect to the update we are expecting by sometime in mid-2027, we will give an update on Detour. Underground. Okay. Thank you for that.

And, James, you mentioned in your remarks to Richard's question about the multiyear budgeting planning process unfolding at the current moment. Just curious if you could give us a look at what you are seeing as a reasonable inflation assumption going into 2027?

Yeah. Thanks, Lawson, for the question. You know, again, it is it is pretty early. We are we are just starting to you know, we initially, we start the process, obviously, with our mine plans and then we work through the costing. Know, we are seeing CPI in Canada that is obviously gonna impact our labor and contractor costs, which is 40%-50% of our overall cost structure. So, you know, 3%-4% for labor is probably not unreasonable at this time, but we will we will see as we get closer to the end of the year. Across the rest of our input costs, the there is you know, nothing. I guess the 1 thing that really stands out is diesel. And know, we do have some of that exposure hedge for the back half of this year, but that is gonna be, I would say the biggest kind of cost pressure in 2027 from 2026. And diesel, just as a reminder, represents about 7% of our overall cost. Yep. that is very helpful. Thanks for that reminder and the color.

And then can I ask on M and A? I mean, particularly given the pullback in valuations and a bit of a derating in the sector, and on the back of the closing of the Finnish acquisition and considering, I mean,, the dozens of current toehold equity positions that you guys have. How is Agnico now viewing the potential for further acquisitions? And then how do you perceive the current opportunity set? Well, I will take that, Lawson.

Nice to hear from you. You know, we are looking at it the way we always do, which is you know, we have the best pipeline I think we have ever had. They are all going really well. We are going to be increasing production per share. The business is going strong. And I can tell you, you know, we are really focused on, delivering the best we can for our owners, which means and you know as well as anyone we focus on per share metrics. We have never had direction from the board to get bigger just for the sake of getting bigger. So it is our job. We get paid to look at opportunities to wisely invest our owners' money. That means in projects. That means we look at exploration. That means we do look at, M&A opportunities all the time. And our toehold investments I will just say it again, it is not to have a portfolio of assets. it is really items that we might be interested in so that we can learn more about them and when we make decisions, we make them based off of knowledge. So the our strategy with regards to M&A is same as it is always been, which is look for opportunities to create value for our owners, but it has to actually make money for our owners on a per share basis. And that is that is continuing how we look at it today. Okay. Thank you all very much.

Thank you.

Our next question is from Daniel Major with UBS. Please go ahead.

Hi. Can you hear me okay? Yes. We can. Thank you. Great. Thanks. Yes, couple of questions. So just the first 1 on San Nicolas, and I know you answered it before, but I know whether I missed it or, can you give any sort of specific milestones around the, final permitting And then the second part of the question, I mean, think I have asked this before, it feels a bit subscale, 50% of San Nicolas for both you and Teck. Is there any kind of discussions Would you take the opportunity to fully consolidate if it came around?

Hi, Daniel. I will answer the first question in terms of San Nicolas. So we are still working through the understanding of, like, the terms in the in the EIA. So we will based on that, we will we will have a better understanding of what additional permits we will need. In terms of the supplementary permits, the ones I can think of off the top of my head are the construction permits, the explosives permit, Maybe we are looking at an alternate water solution or a power solution So those are some of the things that we would consider. And based on that, decision, we will then have a better timeline, a better timeline on those additional permits. Hopefully, helps.

And, Daniel, you are right. I mean, for you are right. For a company the size of Agnico, you know, San Nicolas is a relatively smaller project, but it is a good project. it is it is got robust economics. it is in a part of Mexico, which is really the best part of Mexico to be mining. So strategically, it puts us in a in an area that we think has a lot of potential. With regards to would we or would we not buy it from Teck, now that falls under the category of you know, it depends on a whole bunch of factors. But you know, repeating what I just said before, our job is to look for opportunities to make money for our shareholders and everything we look at, including that, would be would be a function of, does it make economic sense for our owners.

Thank you.

And then second question, and apologies if I missed anything, I know I was a bit late joining the call. So clashing conference calls this afternoon. On Finland, could you just give us yeah, quick summary of the next catalyst we should be thinking about? And then what is your initial assessment after closing the deal on how you think that the sort of scale or scope of the initial project will look relative to the Rupert feasibility study.

Hi, Daniel. Dominique speaking. The first step is to look to the study without boundaries. So where we are gonna we should put the infrastructure with the with the known deposit that we have And we are targeting end of 27 to get you more information about that. that is the next let's say, target.

Okay. Thank you. And then just maybe 2 quick operational questions, if it is thinking about offsetting some of the lost ounces from Canadian Malartic 2 specific ones. Detour, sort of 7 million-plus tons throughput, is that sustainable through the second half Or it seems to be trending pretty well relative to guidance?

So with Detour, in terms of the throughput, the mill throughput, we are we are still doing well. We still have a nice healthy stockpile. In terms of the grade, though, our profile at the first half of the year was scheduled to be higher and it is higher. Okay.

So you think throughput stays well north of 7 million tons per quarter through the second half that the grade comes off. Okay.

Yeah. We are still tracking to be within our guidance. Okay.

And then a similar 1 on Fosterville. Again, grade was good performance in the first half relative to the guidance. Is that still expected to come down Or is there upside?

I guess we are getting more comfortable with the mining in Robbins Hill and Grains to be slightly better than expected. So it may result in something similar to Q2 moving forward, and we are gonna be looking at how to capture that if it is a trend that keeps on being there, to incorporate that in the future, So it may end up with a slightly better grade than, the original plan, but in line with what we are currently experiencing. Great.

Thanks a lot.

Thank you. Our next question is from Tanya Jakusconek with Scotiabank. Please go ahead.

Great. Good morning, everybody. Thank you so much for taking my questions. The first 1 is for Dominique. Dominique, do you think that there is the potential to at Canadian Malartic to come back to that 370 thousand ounces that we have left behind and come back at it after at the end of the mine life of the open pit and access it from underground.

Well, we are keeping, understanding, and, we redesigning the pit. But, Tanya, I will not put that in the in the book anywhere now that we are gonna recover them. We might see opportunities with time, the years to come. I guess, next February might have a better view, but I do not expect for now to recover those ounces.

Okay. Thank you for that. And then maybe circling back on just the costing side, and I know James provided some insights into the inflation labor inflation and, obviously, fuel. We have that. But, you know, we have talked a lot about this and this productivity improvements that you are seeing both, you know, mill and equipment. All else being equal, do you think that we can offset inflation with all of these optimizations? So for example, if inflation is 4% overall, do you think all of this can offset that or partially all else being equal?

Yeah. Tanya, it is James. I would say, I mean, we would love to be able to offset all of it. You know, that is our objective is to do as much as we can to offset inflation. If you look back over the last 3 years, though, I would say on average, inflation's probably run around 7%. And if you back out royalties, going up because of higher gold prices, I would say on average, our costs have been up 3% to 4%. So, you know, over the last 3 years, we have we have offset almost half of the inflation through continuous improvement and productivity initiatives. So that obviously would be the target going forward. Okay.

Thank you for that, providing at least the number for me. And then my final question is for Amar and Carol-Ann, Carol-Ann's around as well, who is just wanted to circle back to safety. And just wanted to understand if you if you have any insights that you can share from these tragic events and any lessons learned that you have implemented within, the Agnico operating system?

Yeah.

Hi. Hi, Tanya. it is Carol-Ann. Certainly. So these you know, as we talked about earlier in the quarter as well, these are 3 very different accidents that happened at 3 different sites and 3 completely different regions. So for the people that are maybe a little less familiar with them, the first 1 happened in Fosterville back in December. This was underground with a cable bolter. And in this particular situation, it was a risk that was that was unrecognized by ourselves and also unrecognized by the equipment manufacturer. And, unfortunately, Francis was in the wrong place at the wrong time, and he lost his life in a pinch point that had been unrecognized. Since that time, Sandvik has been working on modification to the equipment to eliminate that risk. They have got a prototype that will be being tested at site later this later this year. And if it works well, certainly, Sandvik will be offering it out to all of the different people that currently own this machine. At Canadian Malartic, this was an accident that happened in the mill with a conveyor and this was a risk that had been very well recognized right from the beginning of the mine. And, actually, engineering controls have been put in place to prevent anybody from coming in contact with that conveyor. But, unfortunately, over the decade plus since those controls had been put in place, there had been an erosion of the controls. They were not working properly. And this ended up exposing the hazard, and the employee was able to come in contact with the conveyor, and he lost his life in April. Since that time, Canadian Malartic has made modifications in the mill to eliminate the need to do the cleaning task that operator, Francis, was doing at the time. As well as re-putting those controls back in place and making sure they are in place at all the places they need to be. And then the third incident accident happened in Upper Beaver at the shaft at the beginning of May. And again, a situation where the experienced miners had perceived a risk They had changed their work practices in order to mitigate the risk that they perceived but did not communicate well enough that they were doing this change. So the change to the work had not been properly risk assessed. And there was an unintended consequence of exposing the employee to a different risk. And, again, wrong place, wrong time when that risk came up, and Daniel lost his life. So you know, as Amar said, any fatality is unacceptable, and we are very committed to doing better. You know, these losses have been profoundly affected our teams, not just here at head office, but also at the sites, and our teams are motivated and engaged to do better. We are accelerating our works to identify and implement critical controls. To mitigate major hazards at all of our sites. We are strengthening supervision across the company as well. And we are working to reinforce the organizational behaviors that promote safe production. So all of this is a very strong action plan with a number of very detailed items that are that are being carried out across the company. And I think the important thing is that the teams are really engaged to make sure that we can eliminate fatalities and life changing accidents at our sites.

And implementing all of this, Carol-Ann, is it like this, can it be done quickly?

So the critical controls journey we have had, we have been working with 1 of the experts in the world, quite frankly, on that for over a year now. And their advice to us is not to try to go too quickly. We can accelerate certain aspects of it. But doing the actual work to understand which of all of the controls we have got in place are the critical ones, which are the ones that we really need to reinforce and ensure being well-managed at each individual site because every site is different. The work to do that is actually big strength of doing the critical controls work. So we are we are pushing it forward, but we are not pushing our teams to accelerate drastically because we want to do it well. And we wanna ensure that those controls are well maintained and well verified going forward. So Strengthening supervision, that is something that we have been talking about for a while. We have got a training program being rolled out in the next month or so. We have got our supervision formula, which is has been in place in many of our minds for, decades. And we are reemphasizing the training on that as well as making sure that we are not stretching our supervisors too much, making sure that we are not actually asking them to be in too many different places and unable to actually do their work well. So, again, this is this is ongoing. We are going at the pace that the sites and the resources are able to do, and we are supplementing resources to ensure that they can succeed.

Okay. Thank you, and good luck with all the work.

Thank you very much.

Thank you, Tanya.

Our next question is from Anita Soni with CIBC World Markets. Please go ahead.

Thank you and thank you for taking my question. I just wanted to circle back to Odyssey and the progress that you are making there. I think it is in the paste backfill plant is a little bit behind schedule, but it is not on the critical path. I just wanna understand also the shaft you completed ahead of schedule. I could read the commentary says that the last bench was taken out on July 9, and when I look back at the Q1 commentary, it supposed to be I guess, completed at the end of the year. So I am just curious. Like, is there still more to be done at the infrastructure-wise at the bottom of the shaft, and that is still on schedule for the end of the year. And then lastly, just can you give me an update on, you know, there was some commentary about progress on the main ramp being a little bit lighter than what you had previously thought because of ground control issues. Can you just give an update on that as well?

Yes. Thanks, Anita. Dominique. Yeah. For the for the first shaft, we took the last bench in July. But there is still some remaining work Let's say, need to dismantle the Galloway. We need to let's say, do some infrastructure work. underground at the 11.2 thousand level also at the first loading at the level 101 and 10.1 thousand sorry. So we are we are ahead of schedule on the shaft sinking, but it does not mean that we are gonna be faster for Q2 next year for the commissioning. They are still lots of work to do. We might have a bit of contingency with those advances. But it does not change the date. We are well-positioned. On the ramp development, we have got a bit of delay, this quarter, and the team is working to catch up on that in the coming quarters. So it is going as we plan almost for the development. And from the first stope that we have mined, we are learning from them and improving our practices We still have 6 to come, this year. So far, so good. Then, sorry, you are targeting 2,000 meters, I think it is. Per month? On the development. Was that the target? And where are you at right now? Well, we are around 1.8 thousand right now in the target for Q4 is 2,000. 2,000 per month. Okay. Alright. Thank you very much.

Thank you. There are no further questions in the queue at this time. I will now turn the call over to Ammar Al-Joundi for closing remarks.

Thank you, operator, and thank you once again, everyone, for joining the call. And for those of you who get to enjoy the long weekend, have a fabulous weekend. Thank you.

Thank you. Ladies and gentlemen, this concludes today's conference. We thank you for your participation. You may now disconnect.