Agnico Eagle Reports Fourth Quarter and Full Year 2020 Results

(All amounts expressed in U.S. dollars unless otherwise noted)

RECORD QUARTERLY PRODUCTION; RECORD ANNUAL EARNINGS AND CASHFLOW; RECORD RESERVES; GOLD PRODUCTION FORECAST TO GROW 24% FROM 2020 THROUGH 2024; ODYSSEY PROJECT AND AMARUQ UNDERGROUND APPROVED FOR DEVELOPMENT

Stock Symbol: AEM (NYSE and TSX)

TORONTO, Feb. 11, 2021 /CNW/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle" or the "Company") today reported quarterly net income of $205.2 million, or net income of $0.85 per share, for the fourth quarter of 2020.  This result includes non-cash mark-to-market gains on warrants of $29.3 million ($0.12 per share), foreign currency translation gains on deferred tax liabilities of $28.8 million ($0.12 per share), derivative gains on financial instruments of $21.7 million ($0.09 per share), losses on environmental remediation of $16.6 million ($0.07 per share), non-cash foreign currency translation losses of $11.0 million ($0.04 per share) and various other adjustment losses of $9.1 million ($0.04 per share).  Excluding these items would result in adjusted net income¹ of $162.1 million or $0.67 per share for the fourth quarter of 2020.  For the fourth quarter of 2019, the Company reported net income of $331.7 million or $1.39 per share.

Included in the fourth quarter of 2020 net income, and not adjusted above, are non-cash stock option expense of $3.0 million ($0.01 per share) and workforce costs of employees affected by the COVID-19 pandemic (primarily Nunavut-based) of $2.3 million ($0.01 per share).

In the full year 2020, the Company reported record net income of $511.6 million, or $2.12 per share.  This compares with the full year 2019, when net income was $473.2 million, or $2.00 per share.

In the fourth quarter of 2020, cash provided by operating activities was $403.5 million ($386.8 million before changes in non-cash components of working capital), compared to the fourth quarter of 2019 when cash provided by operating activities was $257.5 million ($263.8 million before changes in non-cash components of working capital).  The cash provided by operating activities in the fourth quarter of 2020 resulted in another strong quarter of free cash-flow² generation.

In the full year 2020, cash provided by operating activities was $1,192 million ($1,211 million before changes in non-cash components of working capital), compared to the full year 2019 when cash provided by operating activities was $882 million ($867 million before changes in non-cash components of working capital).  The cash provided by operating activities in the full year of 2020 sets a yearly record for the Company and resulted in strong annual free cash-flow generation.

The decrease in net income in the fourth quarter of 2020, compared to the prior-year period, is primarily due to the impairment reversal (net of tax) relating to the Meliadine mine of $223.4 million in the fourth quarter of 2019, partially offset by higher revenues from mining operations resulting from higher average realized gold and silver prices as well as changes in non-cash items related to mark-to-market gains on warrants and other financial instruments owned by the Company.

The increase in net income in the full year 2020, compared to the prior-year, is primarily due to higher average realized gold prices as well as changes in non-cash items related to mark-to-market gains on warrants and other financial instruments owned by the Company, partially offset by the impairment reversal (net of tax) relating to the Meliadine mine of $223.4 million in the fourth quarter of 2019, higher amortization costs from the Meliadine and Canadian Malartic mines and lower gold sales volume.  The lower gold sales volume was primarily driven by the suspension of seven of the Company's eight mines in the second quarter of 2020 in response to the COVID-19 pandemic.

The increase in cash provided by operating activities in the fourth quarter of 2020, compared to the prior-year period, was mainly due to an increase in revenues from mining operations resulting from higher average realized gold and silver prices, partially offset by higher cash taxes related to higher operating margins in the quarter. 

The increase in cash provided by operating activities in the full year 2020, compared to the prior-year, was mainly due to an increase in revenues from mining operations resulting from higher average realized gold prices, partially offset by lower gold sales volume, higher production costs from the Meadowbank Complex as mining transitioned to the Amaruq satellite deposit, temporary suspension costs related to the COVID-19 pandemic and higher cash taxes related to higher operating margins.

"Despite 2020 being very challenging, we ended the year with record quarterly gold production, our largest gold reserve base and our best ever safety performance as a result of the excellent work of our employees.  With gold production expected to increase by approximately 300,000 ounces in 2021, combined with an anticipated decline in total cash costs per ounce of 6%, we expect to continue to generate strong net free cash flow in 2021 while we steadily advance our pipeline of growth projects," said Sean Boyd, Agnico Eagle's Chief Executive Officer.  "As we move forward, our focus will be on maximizing the full potential of our existing mines through mineral reserve additions and incremental production expansions while also building new projects like the recently approved underground mines at Canadian Malartic and Amaruq.  At the same time, we will continue to look to strengthen our business and build additional value by adding projects with excellent potential to grow and become important cash flow generators, like the recently acquired Hope Bay project," added Mr. Boyd.

Fourth quarter of 2020 and full year 2020 highlights include:

• Record quarterly gold production – Payable gold production³ in the fourth quarter of 2020 was 501,445 ounces (including 15,504 ounces of pre-commercial gold production from the IVR open pit at the Meadowbank Complex and the Tiriganiaq open pit at Meliadine) at production costs per ounce of $771, total cash costs per ounce⁴ of $701 and all-in sustaining costs ("AISC") per ounce⁵ of $985. Payable gold production in the full year 2020 was 1,736,568 ounces (including 36,416 ounces of pre-commercial gold production from the IVR deposit, Tiriganiaq open pit, and Barnat pit at Canadian Malartic) at production costs per ounce of $838, with total cash costs per ounce of $775. This compares to the most recent guidance of 1.68 to 1.73 million ounces of gold at total cash costs per ounce of $740 to $790. AISC per ounce in the full year 2020 were $1,051, compared to the most recent guidance of $1,025 to $1,075 per ounce. Production costs, total cash costs per ounce and AISC per ounce exclude the pre-commercial production ounces from IVR, Tiriganiaq and Barnat
  
  
• Optimization of existing assets supports 24% Growth in Expected Production From 2020 Through 2024 – The mid-point of gold production guidance for 2021 and 2022 is 2.05 and 2.1 million ounces, respectively (unchanged from previous guidance issued in February 2020). The mid-point for gold production guidance for 2023 is 2.125 million ounces, while gold production in 2024 is expected to be approximately 2.15 million ounces. At this time, gold production guidance excludes production from the newly acquired Hope Bay deposits
  
  
• Cost guidance for 2021 essentially in line with prior year's guidance – In 2021, total cash costs per ounce are forecast to be between $700 and $750. This compares to last year's guidance range for 2021 of $675 to $725, before adding COVID-19 related costs of approximately $10 per ounce. In 2021, AISC are forecast to be between$950 and $1,000 per ounce. Although the Company expects some variability in operating costs over the period, total cash costs per ounce and AISC per ounce are expected to average approximately $750 and $990 per ounce, respectively, through 2024. In 2021, capital expenditures are forecast to be approximately $803 million. Annual capital expenditures are expected to be approximately $750 million to $800 million through 2024
  
• Gold mineral reserves increase to record level – Year-end 2020 gold mineral reserves increased by 12% to 24.1 million ounces of gold (348 million tonnes grading 2.15 grams per tonne ("g/t") gold). Approximately 1.1 million ounces of the increase comes from operating mines (primarily the LaRonde Complex, Canadian Malartic, Goldex, Meliadine, Pinos Altos and Kittila) with the balance coming from the Hammond Reef project. Gold contained in measured and indicated mineral resources decreased by 15% to 15.3 million ounces (341million tonnes grading 1.40g/t gold), largely due to conversion into mineral reserves. Inferred mineral resources increased by 9% to 23.4 million ounces (283million tonnes grading 2.57g/t gold), largely due to additions at the East Gouldie deposit at Canadian Malartic
  
  
• 2021 exploration budget increased by over 40% with a focus on expansion and conversion drilling at existing properties and delineation of new target areas – The exploration budget in 2021 has been increased to approximately $163 million (from $113 million in 2020). The focus will be on the expansion of mineral reserves and mineral resources at operating mines and pipeline projects. In addition, new target areas will be tested at LaRonde, Kittila, East Gouldie, Santa Gertrudis and Hope Bay
  
  
• Near-Term Opportunities Support Production Growth in 2021 to 2023; Kittila and Meliadine expansions progressing as planned; Amaruq underground and Odyssey projects approved for development
  
  
• Kittila and Meliadine – At Kittila, the mill expansion was completed in the fourth quarter of 2020 (ahead of schedule) and shaft sinking remains on budget despite delays related to COVID-19 travel restrictions impacting the Canadian-based contractor. At Meliadine, the Phase 2 expansion remains on track with mill throughput expected to increase from an average of approximately 4,600 tonnes per day ("tpd") in 2021 to 6,000 tpd in 2025
  
  
• Amaruq underground project – First gold production is expected in 2022. Over the current estimated 5-year mine life, approximately 500,000 ounces of gold are expected to be produced with a positive impact expected on overall production and costs at the Meadowbank Complex in 2023 to 2026. Additional mineral reserves may be available for mining, but will be contingent on the development of new open pit ore sources
  
  
• Odyssey project – Initial production is expected in 2023 from the underground ramp. Shaft sinking and development to access the higher-grade East Gouldie deposit is expected to continue until the end of 2028. Starting in 2029, the mine is expected to produce an average of 545,400 ounces of gold per year (100% basis) at total cash costs per ounce of $630. Over an expected 17-year mine life, total payable gold production is expected to be approximately 6.93 million ounces (100% basis)
  
  
• Project pipeline provides future production optionality: Upper Beaver technical evaluations advancing; Hope Bay acquisition completed; Hammond Reef declares Initial Mineral Reserves
  
  
• Upper Beaver – 2020 drilling focused on infilling and expanding mineral resources. Additional drilling is planned at Upper Beaver in 2021 to test an open pit concept and an internal technical study is expected to be completed at year-end 2021
  
  
• Hope Bay – In 2021, the Company expects to continue mining at the Doris deposit while undertaking optimization efforts, as well as initiating a property wide exploration program and evaluating the Madrid and Boston deposits for future production. Hope Bay is expected to be approximately cash flow neutral in 2021, and is currently not included in the Company's production or cost guidance for 2021
  
  
• Hammond Reef – A positive internal technical study was completed in 2020, resulting in the declaration of the first open pit mineral reserves of 3.32 million ounces of gold (123.5 million tonnes grading 0.84 g/t gold). Going forward, the Company will continue to evaluate optimization of the deposit and potential mining scenarios to further improve project economics
  
  
• A quarterly dividend of $0.35 per share has been declared

Fourth Quarter and Full Year 2020 Financial and Production Highlights

In the fourth quarter of 2020, strong operational performance continued at the Company's eight mines, which led to record quarterly payable gold of 501,445 ounces (including pre-commercial gold production of 10,995 ounces from the IVR pit at the Meadowbank Complex and 4,509 ounces from the Tiriganiaq open pit at Meliadine), compared to 494,678 ounces in the prior-year period (which included 3,137 ounces of pre-commercial gold production from the Barnat deposit at Canadian Malartic).

The higher gold production in the fourth quarter of 2020, when compared to the prior-year period, was primarily due to the strong performance of the Nunavut operations which achieved their targeted operating rates, partially offset by lower production from the LaRonde Complex due to lower grade and throughput as a result of adjustments to the mining sequences and lower production from the Kittila mine due to a planned shutdown at the start of the quarter.

In the full year 2020, payable gold production was 1,736,568 ounces (including pre-commercial gold production of 18,930 ounces from the Barnat deposit at Canadian Malartic, 10,995 ounces from the IVR pit at the Meadowbank Complex and 6,491 ounces from the Tiriganiaq open pit at Meliadine), compared to 1,782,147 ounces in the prior-year period (which included an aggregate of 85,699 ounces of pre-commercial gold production at the Meliadine mine, the Amaruq satellite deposit and the Barnat deposit).

The lower gold production in the full year 2020, when compared to the prior-year period, was primarily due to lower production at four of the Company's eight mines as a result of temporary shutdowns or reduction in activities in the second quarter of 2020 related to government mandated COVID-19 restrictions, partially offset by the contribution of a full year of production from the Meliadine mine which achieved commercial production in May 2019 and strong performance at the Kittila mine.  A detailed description of the production at each mine is set out below.

Production costs per ounce in the fourth quarter of 2020 were $771, compared to $763 in the prior-year period.  Total cash costs per ounce in the fourth quarter of 2020 were $701, compared to $745 in the prior-year period.

In the fourth quarter of 2020, production costs per ounce increased when compared to the prior-year period primarily due to additional costs at all sites related to COVID-19 protocols and higher production costs at the Kittila mine resulting from contractor cost pressures and lower gold production.  In the fourth quarter of 2020, total cash costs per ounce decreased when compared to the prior-year period primarily due to higher by-product revenues at the LaRonde Complex and the Mexican operations and the timing of inventory at the Meadowbank Complex, partially offset by the reasons described above.

Production costs per ounce in the full year 2020 were $838, compared to $735 in the prior-year.  Total cash costs per ounce in the full year 2020 were $775, compared to $673 in the prior-year period.

Production costs per ounce and total cash costs per ounce in the full year 2020 increased when compared to the prior-year primarily due to higher production costs at the Meadowbank Complex as mining transitioned to the Amaruq satellite deposit, higher production costs at the Kittila mine as a result of contractor cost pressures and higher costs per ounce at the Goldex, Canadian Malartic and Pinos Altos mines, mainly related to lower gold production at those sites as a result of temporary shutdowns or reduction in activities in the second quarter of 2020 related to government mandated COVID-19 restrictions.

AISC in the fourth quarter of 2020 was $985 per ounce, compared to $1,039 in the prior-year period.  AISC in the fourth quarter of 2020 decreased when compared to the prior-year period primarily due to lower total cash costs per ounce and lower sustaining capital expenditures.

AISC in the full year 2020 was $1,051 per ounce, compared to $938 in the prior-year period.  AISC in the full year 2020 increased when compared to the prior-year primarily due to higher total cash costs per ounce and higher sustaining capital at the Meadowbank Complex, as the Amaruq satellite deposit and Meliadine transitioned to commercial production in the second and third quarters of 2019, respectively.  A detailed description of the cost performance of each mine is set out below.

Strong Financial Results; Increased Cash Position at Year-End 2020

Cash and cash equivalents and short-term investments increased to $406.5 million at December 31, 2020, from the September 30, 2020 balance of $321.5 million, as the Company continues to generate strong cash flow from operations.  As of December 31, 2020, the outstanding balance on the Company's unsecured revolving bank credit facility was nil, and available liquidity under this facility was $1.2 billion, not including the uncommitted $300 million accordion feature.

"In February 2021, Moody's initiated their inaugural credit rating on Agnico Eagle and have assigned a Baa2 issuer rating with a Stable outlook.  We are delighted to have a third ratings agency assign a strong investment grade rating, joining Fitch and DBRS," stated David Smith, Agnico Eagle's Senior Vice President, Finance and Chief Financial Officer.  "Agnico Eagle has entered a period of strong free cash flow generation as demonstrated by the record results in 2020.  We remain committed to managing the business such that we maintain a proper balance of reinvestment in our mines and pipeline projects, having a strong balance sheet and returning capital to our shareholders," added Mr. Smith.

Approximately 33% of the Company's 2021 estimated Canadian dollar exposure is hedged at an average floor price above 1.33 C$/US$.  Approximately 34% of the Company's 2021 estimated Mexican peso exposure is hedged at an average floor price above 21.00 MXP/US$.  Approximately 10% of the Company's 2021 estimated Euro exposure is hedged at an average floor price of approximately 1.20 US$/EUR.  The Company's full year 2021 cost guidance is based on assumed exchange rates of 1.30 C$/US$, 20.00 MXP/US$ and 1.20 US$/EUR.

Approximately 50% of the Company's diesel exposure relating to its Nunavut operations for 2021 is hedged at prices better than the 2021 cost guidance assumption of C$0.50 per litre (excluding transportation costs).

The Company will continue to monitor market conditions and anticipates continuing to opportunistically add to its operating currency and diesel hedges to support its key input costs.  Going forward, the Company anticipates providing updates on its hedging position on an annual basis.

Capital Expenditures

Total capital expenditures (including sustaining capital) in the full year 2020 were $773 million, compared to the most recent guidance of $740 million.  The increase in capital expenditures compared to the previous guidance is primarily related to additional spending at the Kittila and Meliadine mines and the Amaruq satellite deposit and the buy-back of a royalty at the Hammond Reef project.  At the Kittila mine, approximately $20 million of additional capital expenditures resulted from the acceleration of costs in connection with the completion of the mill expansion, the construction of the NP4 tailings pond and the construction of the discharge waterline.  At the Meliadine mine, approximately $10 million of additional capital expenditures resulted from the higher-than-expected production rate which resulted in accelerated stripping of the Tiriganiaq pit.  At Amaruq, approximately $11 million of additional capital expenditures were incurred due to the acceleration of development at the IVR pit.  These increases in capital expenditures were partially offset by lower capital expenditures at the Canadian Malartic mine due to higher than expected pre-production credits from the Barnat pit, and lower capital expenditures at the Pinos Altos at La India mines related to the mandatory temporary suspension of operations in April and May 2020.

The following table sets out capital expenditures (including sustaining capital) in the fourth quarter and the full year 2020.

Dividend Record and Payment Dates for the Fourth Quarter of 2020

Agnico Eagle's Board of Directors has declared a quarterly cash dividend of $0.35 per common share, payable on March 22, 2021 to shareholders of record as of March 1, 2021.  Agnico Eagle has now declared a cash dividend every year since 1983.

Expected Dividend Record and Payment Dates for fiscal 2021

Dividend Reinvestment Plan

Please see the following link for information on the Company's dividend reinvestment plan: Dividend Reinvestment Plan

COVID-19 Update

From the early days of the outbreak of the COVID-19 pandemic, the Company implemented extraordinary measures with a constant focus on protecting the health and safety of its employees, on protecting and supporting the communities in which it operates and on protecting its operations.  The second wave of COVID-19 continues to affect all of the Company's operating regions.  However, during the fourth quarter of 2020, mining remained an essential business in these regions and none of the Company's operations were suspended or restricted.

Throughout 2020, the Company continually enhanced its safety protocols, maximized teleworking where possible and increased its testing capacity.  Five testing facilities now support the Canadian operations and one testing facility, funded by the Company, is available to the Kittila operation as well as to all the residents of Kittila municipality.  COVID-19 protocols (not including compensation paid to Nunavut-based employees) added approximately $2.1 million (approximately $4 per ounce) to the Company's operating costs in the fourth quarter of 2020.  These costs relate mainly to the purchase of sanitizing equipment and consumables; procurement of non-medical masks; testing of employees; rental of trailers for screening; additional employee transportation; and supplies and health support to surrounding communities.  These incremental costs are expected to remain in place for the foreseeable future and are expected to increase the production costs at our operations by approximately $1.0 to $1.5 million per month.  To date, the Company has seen limited impact on operational productivity as a result of COVID-19.

In its effort to support the local communities in which it operates, the Company maintains constant communication with local authorities to understand the community-based priorities and to identify where we are able to help.  In Mexico, the local teams continue to provide resources to local health centres and communities and to distribute food hampers to vulnerable people.  In Nunavut, the Kivalliq region reported its first COVID-19 cases in November 2020 and the Government of Nunavut implemented mandatory, territory-wide restrictions.  The Company's local team provided rapid and effective assistance, including snow removal, providing financial support for equipment rental and manpower, and funding food hampers and health and safety supplies for affected communities.

In the fourth quarter of 2020, the Nunavut-based workforce remained at home due to current COVID-19 health guidelines issued by the Government of Nunavut and the Company continued to pay 75% of the base salaries to these employees (a total of $3.7 million pre-tax, $2.3 million net of tax, included in Other Expenses).  As the distribution of COVID-19 vaccines has begun in local Nunavut communities, the Company is preparing to reintegrate the Nunavut based workforce to its operations in the course of 2021.

In the fourth quarter of 2020, 285 employees tested positive for COVID-19.  A significant majority of these cases were detected by the Company's screening and testing protocols.  To date, these protocols have been effective at detecting COVID-19 cases and preventing the spread of the virus within the Company's operations.

Of the 285 employees who tested positive for COVID-19 in the fourth quarter of 2020, 257 employees recovered and the Company continues to monitor closely the health status of the employees that have not yet recovered.  The following table sets out additional information on COVID-19 cases identified in the fourth quarter of 2020.

Agnico Eagle will continue to maintain high standards and strive to provide a healthy and safe working environment at all its operations.  The Company will continue to monitor the situation closely to respond promptly as needed.

Fourth Quarter 2020 Results Conference Call and Webcast Tomorrow

Agnico Eagle's senior management will host a conference call on Friday, February 12, 2021 at 9:00 AM (E.S.T.) to discuss the Company's fourth quarter financial and operating results.

Via Webcast:

A live audio webcast of the conference call will be available on the Company's website www.agnicoeagle.com.

Via Telephone:

For those preferring to listen by telephone, please dial 1-647-427-7450 or toll-free 1-888-231-8191.  To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.

Replay Archive:

Please dial 1-416-849-0833 or toll-free 1-855-859-2056, access code 5848876.  The conference call replay will expire on Friday, March 13, 2021.

The webcast, along with presentation slides, will be archived for 180 days on the Company's website.

Four-Year Guidance – Forecast Shows Continued Production Growth

The Company is announcing its detailed production and cost guidance for 2021, mine by mine production forecasts for 2021 through 2023 and consolidated production guidance for 2024.  Gold production in 2021 is forecast to be approximately 2,047,500 ounces, in line with the prior three-year gold production guidance issued on February 13, 2020 ("Previous Guidance").  Gold production in 2022 is forecast to be between 2.075 million and 2.125 million ounces (mid-point of 2.1 million ounces), which is in line with the previous guidance. Gold production in 2023 is forecast to be between 2.1 million and 2.15 million ounces (mid-point of 2.125 million ounces).  Gold production in 2024 is forecast to be approximately 2.15 million ounces. At this time, gold production guidance for 2021 to 2024 excludes production from Hope Bay.

The Company believes that the risk of further business interruption from COVID-19 remains low considering the rigorous protocols that the Company has implemented in all operating regions and the initiation of the global vaccination program.  However, unexpected interruptions could still occur given the uncertainty surrounding the evolution of the virus and the measures taken by governments and others to contain the spread and impact of the virus.

In 2021, gold production is expected to ramp up over the year.  Overall, 2021 gold production is expected to be split approximately 48% in the first half of the year and 52% in the second half.

Total cash costs per ounce in 2021 are expected to be between $700 and $750 using an assumed C$/US$ foreign exchange rate of 1.30.  The higher costs, when compared to Previous Guidance of between $675 and $725, are largely a result of added costs at all sites for COVID-19 protocols, higher costs at La India related to water conservation measures in the first half of 2021 and general industry cost pressures (approximately 3% to 5%).  Although the Company expects some variability in operating costs from 2021 to 2024, total cash costs per ounce are expected to average approximately $750 per ounce over that period (assuming a C$/US$ foreign exchange rate assumption of 1.30).  The Company remains focused on reducing costs through productivity improvements and innovation initiatives at all of its operations.

AISC in 2021 are expected to be between $950 and $1,000 per ounce.  The higher costs, when compared to Previous Guidance of between $900 and $950, are largely a result of higher total cash costs and slightly higher capital expenditures.  Although the Company expects some variability in operating costs from 2021 to 2024, AISC per ounce are expected to average approximately $990 per ounce over that period (assuming a C$/US$ foreign exchange rate assumption of 1.30).  At this time, cost guidance for 2021 to 2024 excludes costs at Hope Bay.

With the ramp-up of operations at Meliadine and Amaruq now completed and the completion of the mill expansion at Kittila in the fourth quarter of 2020, the Company now has five cornerstone production assets (the LaRonde and Meadowbank Complexes and the Canadian Malartic, Kittila and Meliadine mines) each with annual production rates of approximately 250,000 to 400,000 ounces of gold.

In 2021, with gold production expected to increase by approximately 18% and total cash costs forecast to decline by approximately 6%, the Company expects to continue generating strong cash flow.

Four-Year Guidance Shows 24% Growth Over 2020 Production Level; Costs Guidance for 2021 Essentially In Line with Prior Year's Guidance

Mine by mine production and cost guidance for 2021, and mine by mine production forecasts for 2022 and 2023 are set out below.  Opportunities to further optimize and improve production and unit cost forecasts from 2021 through 2023 are being evaluated.

In 2024, the estimated production level is currently forecast to be approximately 2.15 million ounces of gold.  Estimated payable gold production for 2021 to 2024 excludes payable gold production from Hope Bay.

Currency and commodity price assumptions used for 2021 cost estimates and sensitivities are set out in the table below:

Depreciation Guidance

Agnico Eagle expects 2021 depreciation and amortization expense to be between $700 and $750 million.

General & Administrative Cost Guidance

Agnico Eagle expects 2021 general and administration expenses to be between $80 and $90 million, excluding share-based compensation.  In 2021, share based compensation expense is expected to be between $35 and $45 million (including non-cash stock option expense of between $10 and $15 million).

Other Cost Guidance

In 2021, Agnico Eagle expects additional other expenses of approximately $10 million in connection with sustainable development activities in the Abitibi region of Quebec.

Please see the supplemental financial data section of the Financial and Operating Database on the Company's website for additional historical financial data.

Tax Guidance

For 2021, the Company expects its effective tax rates to be:

Canada - 40% to 50%
Mexico - 35% to 40%
Finland - 20%

The Company's overall tax rate is expected to be between 40% and 45% for the full year 2021.

Updated Three Year Operational Guidance Plan

Since the prior Production Guidance for 2021 and 2022 was issued on February 13, 2020, there have been several operating developments resulting in changes to the overall three-year production profile⁶ at several mines.  Descriptions of these operating developments are set out below.

NORTHERN BUSINESS

ABITIBI REGION, QUEBEC

At the LaRonde Complex, the production guidance is higher than the Previous Guidance for 2021 and 2022 as a result of increased anticipated gold grades at the LaRonde mine and increased mining rates at the LaRonde Zone 5 mine ("LZ5").

The strengthening of ground support and revised seismic protocols in the West mine area implemented in the first quarter of 2020 have been effective and the planned throughput levels have been confirmed.  The higher expected gold grades at LaRonde result from the revision of mining sequence and the adjustment of the block model at year-end, which now partially factors-in the higher than anticipated grades from the West Mine area.  At LZ5, the successful implementation of automated mining techniques has resulted in a consistent improvement in productivity in 2020 and the forecast production rate for 2021 has been set at 3,000 tpd.

At Canadian Malartic (in which Agnico Eagle has 50% ownership), production guidance is in line with Previous Guidance for 2021 and 2022.  A reduced mining footprint and a higher density of underground openings in the Canadian Malartic pit continues to limit the access to higher-grade ore, which is expected to be supplemented by lower-grade stockpiles.  In 2021, approximately 65% of the production will be sourced from the Canadian Malartic pit.  However, an increasing portion of the ore will be mined from the Barnat pit, which is expected to result in additional flexibility quarter over quarter.  The mill throughput in 2021 is forecast to be approximately 57,000 tpd (on a 100% basis).

At Goldex, the production guidance is in line with Previous Guidance for 2021 and higher for 2022.  The expected increase in production in 2022 is largely due to the acceleration of mining rates from the Deep 1 area as well as the South Zone and the anticipated increase in the Rail-Veyor capacity to 7,500 tpd.

NUNAVUT REGION

At the Meadowbank Complex, the production guidance is in line with Previous Guidance for 2021 and lower for 2022.  The expected decrease in production in 2022 is primarily due to the delay in the Amaruq underground project as a result of the COVID-19 related reduction in activities in the second quarter of 2020.  The Company currently forecasts approximately 45,000 ounces of gold being produced from underground operations in 2022, compared to 50,000 to 60,000 ounces forecast in the Previous Guidance.  Further details on the Amaruq underground project are provided below.

Every year, the caribou migration is factored into the Company's production plan.   This migration can impact the ability to move materials on the road between Amaruq and Meadowbank and between Meadowbank and Baker Lake.  Wildlife management is an important priority and the Company is working with Nunavut stakeholders to find the best solutions to safeguard wildlife and minimize production disruptions.

At Meliadine, the production guidance is lower than the Previous Guidance in 2021 and 2022 primarily due to a revision of the mining sequence, with increased ore being sourced from the lower grade Tiriganiaq open pits.  Minesite costs per tonne at Meliadine are expected to decline as production levels increase.  Additional details on the Phase 2 expansion are provided in the Meliadine operating section below.

FINLAND

At Kittila, the production guidance is higher than the Previous Guidance in 2021 and lower in 2022 primarily due to a revision to the mining sequence related to the underground expansion project.  Minesite costs per tonne are expected to decline as production levels increase to 2 million tonnes per year and with the commissioning of the shaft expected in the first half of 2022.

SOUTHERN BUSINESS

At Pinos Altos, the production guidance is lower than the Previous Guidance in 2021 and 2022 largely due to a reduction in throughput levels and grades at Pinos Altos. This reduction is related to the adjustment of the Cerro Colorado mining sequence to manage challenging ground conditions, partially offset by increased production from other zones.  The Company will continue the development of the Cubiro satellite deposit and prepare the operation for a possible early production ramp-up in 2022.  In addition, the Company is evaluating the potential to develop the Reyna de Plata deposit satellite zone, to extend the mine life at Pinos Altos.

At La India, the production guidance is lower than the Previous Guidance in 2021 and higher in 2022.  Reduced water levels, resulting from lower rainfall in 2020 than in previous years, will result in lower production in the second quarter of 2021.  Leaching operations are expected to normalize in the second half of 2021.  The  higher production guidance in 2022 is due to increased percolation rates related to the phase III pad expansion.  The Company continues to evaluate the potential to develop other satellite zones such as Chipriona to extend the life of the mine.

Total Capital Expenditure Forecast Increases Slightly Over 2020; Capital Expenditures Expected to Remain Stable through 2024

Estimated capital expenditures for 2021 total approximately $803 million, which includes approximately $351 million of sustaining capital at the Company's operating mines, $407 million on growth projects and $45 million on capitalized exploration, as set out in the table below.  Additionally, approximately $129 million is expected to be spent on expensed exploration and project evaluations and approximately $33 million is expected to be spent on corporate development, and technical services.

Using the Company's 2021 budget assumptions, annual sustaining capital expenditures for 2022 and beyond are expected to remain stable at approximately $325 to $375 million.  Based on the extensive list of high-quality development growth opportunities, which are discussed below, and depending on prevailing gold prices and the timing of project approvals, the Company expects that total growth capital in future years could be approximately $375 to $425 million.  Overall, annual capital expenditures are expected to be approximately $750 to $800 million through 2024.

2021 Exploration Program and Budget – Key Programs Include Kittila, Canadian Malartic, LaRonde, Kirkland Lake, Meliadine, Hope Bay and Santa Gertrudis

As a result of recent exploration successes at several projects, the Company has budgeted for a substantial increase in exploration expenditures in 2021, for a total of $163 million, and is planning the most ambitious exploration program in the Company's history to investigate the full potential of existing operations and key projects in the Company's pipeline.

A large component of the 2021 exploration program will include programs at the Kittila mine in Finland, the Canadian Malartic mine and LaRonde Complex in the Abitibi region of northwest Quebec, the Kirkland Lake project in northeastern Ontario, the Meliadine and Hope Bay mines in Nunavut, and the Pinos Altos and La India mines and the Santa Gertrudis project in Mexico.  The objective of these exploration programs is to build on recent exploration success in order to identify additional mineral resources and convert mineral resources into mineral reserves as part of the Company's general strategy to develop the full potential of existing operations and the project pipeline.

At the Kittila mine, the Company expects to spend $14.3 million for 74,500 metres of drilling focused on the Main Zone in the Roura and Rimpi areas as well as the Sisar Zone.  The drilling includes 65,000 metres of capitalized conversion drilling at the mine as described above and 9,500 metres of expensed exploration drilling on targets beyond the current mineral resource area, especially at depth.

At the Goldex mine, the Company expects to spend $6.5 million for 67,500 metres, including 61,500 metres of conversion and 6,000 metres of exploration drilling, focused on the M Zone, Deep 1, Deep 2 and South zones.

At the Canadian Malartic mine, the Company expects to spend $11.9 million (50% basis) for 141,400 metres (100% basis) of exploration and conversion drilling focused on aggressive infilling of the East Gouldie Zone to improve confidence in the mineral resource and refine the geological model.  With ramp development underway as part of the Odyssey project, the Company will be able to initiate underground conversion drilling from the ramp in 2021.  The Company is planning to spend another $3.2 million (50% basis) on 32,000 metres (100% basis) on exploration drilling to test other regional targets at Canadian Malartic, including the Rand Malartic and East Amphi properties.

At the LaRonde Complex, the Company expects to spend $14.1 million to develop new exploration drifts from the LaRonde 3 infrastructure towards the west below the LZ5 mine workings and for 39,800 metres of drilling into multiples targets including Zone 5, Zone 6, Zone 20N and the recently discovered Zone 20N Zn South with the aim of adding new mineral reserves and mineral resources to extend the mine life of the LaRonde Complex into the 2030's.

At the Kirkland Lake project in Ontario, the Company expects to spend $14.0 million for 52,200 metres, including $9.1 million for 36,500 metres of exploration and conversion drilling at the Upper Beaver deposit in preparation for an internal evaluation expected to be completed at the end of 2021.  Elsewhere at the Kirkland Lake project, another $4.9 million in expenditures is planned for 15,700 metres of drilling on several targets including the Upper Canada deposit.

At the Meadowbank Complex, the Company expects to spend $7.0 million for 34,900 metres of drilling, including 23,900 metres of conversion and 11,000 metres of exploration drilling, focused at testing open-pit extensions and further underground potential of the deposits at the Amaruq satellite operation.

At the Meliadine mine, the Company expects to spend $8.3 million for 44,000 metres of capitalized drilling with a focus on conversion drilling at the Tiriganiaq, Normeg and Wesmeg deposits, as well as exploration drilling of the Tiriganiaq, Wesmeg, Pump and F-Zone deposits, which are all open at depth.

Elsewhere in the Kivalliq region of Nunavut, the Company expects to spend $9.0 million for 20,600 metres of drilling on regional exploration, including 10,000 metres of drilling in the Meadowbank area and 7,000 metres of drilling in the Meliadine area with a primary focus on investigating for new open-pit potential near existing infrastructure.  Another 3,600 metres are expected to be drilled on other exploration targets in the region.

At the Hope Bay mine, the Company expects to spend $16.2 million for 69,600 metres of drilling, including $5.5 million for 29,800 metres of delineation drilling to support production at the Doris mine and $10.7 million for 39,800 metres of drilling on exploration targets around the Doris, Madrid and Boston deposits and other targets along the belt.  The Company is currently evaluating exploration priorities and metres allocated on each program and may adjust the allocation during the course of 2021.

At the Santa Gertrudis project in Sonora, Mexico, the Company expects to spend $11 million for 30,000 metres of drilling that will be focused on expanding the mineral resource, testing the extensions of high-grade structures such as the Amelia deposit, exploring new targets and completing metallurgical test work.  An updated mineral reserve and mineral resource estimate and an updated preliminary economic assessment are expected to be completed in 2021.

At the Pinos Altos mine, the Company expects to spend $3.9 million for 20,000 metres of drilling, including 10,000 metres to infill and expand the mineral resource at Cubiro and as well as exploration drilling to test the depth potential of the Cerro Colorado, Santo Nino and Reyna East zones and other targets on the property.

At the La India mine, the Company expects to spend $4.0 million for 20,000 metres of drilling to investigate for shallow, near surface oxide targets and to grow and infill the Chipriona polymetallic sulphide deposit.

2021 Global Exploration Program and Corporate Development Budget

Pipeline Projects Continue to Advance – Opportunities to Enhance Short-Term and Longer-Term Production

The Company has an extensive pipeline of development and advanced exploration projects, several of which are located near its existing mining operations. These projects have the potential to add further value and enhance the current gold production profile in the short-term (2021-2023) and longer-term (2024 and beyond). Updates on the various projects are set out below.

Near-Term Pipeline Opportunities Expected to Enhance Production in 2021 to 2023; Amaruq Underground and Odyssey approved for Development; Hope Bay acquisition completed, strategic review underway

Expansion projects are currently underway at Kittila and Meliadine to enhance and increase current production.  Updates on these expansions are presented below in the operational section of this news release.

In addition, underground mining and development programs have now been approved at the Amaruq underground project and the 50%-owned Odyssey project at Canadian Malartic. Gold production from the Amaruq underground project is expected to begin in early 2022, while initial production from the Odyssey project is expected to begin in 2023.  Additional details on these two projects are set out below.

On February 2, 2021, the Company completed the acquisition of TMAC Resources Inc. ("TMAC"), which owned and operated the Hope Bay mine in Nunavut.  At this time, the Doris deposit remains in production, and is forecast to be approximately cashflow neutral in 2021.  Hope Bay is not currently included in the Company's 2021 to 2024 production, cost and capital guidance.  In 2021, Agnico Eagle plans to ramp up a property wide exploration program and evaluate optimal mining and milling strategies for future production.  The Company believes that Hope Bay has the potential to be a 250,000 to 300,000 ounce per year operation.  Additional details on Hope Bay are set out below.

The Company is also evaluating several other potential near-term opportunities (none of which has yet been approved for construction) at existing operations to build further value and enhance the gold production profile starting in 2022.  These opportunities are set out in the table below.

Amaruq Underground Approved for Mine Development; First Production Expected in 2022

The delineation of higher-grade mineralization at depth below the proposed open pits at Amaruq led to the decision to construct an exploration ramp into the Whale Tail deposit in 2017.  Ramp development commenced in 2018 using a phased approach in order to manage capital costs.  In 2020, work on the underground project was reduced due to the restrictions on mining activities in the second quarter of 2020 in response to the COVID-19 pandemic and as the Company focused its priorities on completing the ramp up of open pit mining activities at Amaruq.  With mining operations now on a strong footing at the Meadowbank Complex, the Amaruq underground project has now been approved for development and first gold production is expected in early 2022. The objective is to mine higher-grade underground portions of the deposit in conjunction with the open pits.

The existing exploration portal and ramp will be used for development and production.  The exploration ramp is currently at a depth of approximately 340 metres below surface and in 2021 approximately 2,421 metres of underground development are planned.  A traditional truck and scoop tram approach has been selected for underground mucking and hauling.  Once at surface, ore will be moved by long haul trucks for treatment at the nearby Meadowbank processing plant.

Long-hole open stoping is the most suitable method for this underground deposit.  The stopes are to be backfilled using cemented rockfill ("CRF").  Testing of CRF in cold conditions was initiated in 2019 and confirmed the applicability of the assumptions used for the project.

The mining rate is expected to start at 1,500 tpd and then ramp up to 2,300 tpd.  Over the five-year mine life, the average mining rate is expected to be approximately 2,000 tpd.  The mine plan includes a pre-production period with operational ramp up from the second quarter of 2021 to the third quarter of 2022.  Commercial production is expected in the fourth quarter of 2022 and production is expected to continue until the end of 2026.  Ultimately, 3.071 million tonnes of ore with an average gold grade of 5.47 g/t is expected to be mined underground within the permafrost of the Whale Tail deposit.

Given the permafrost conditions, it is expected that the mine will be dry and will not be heated.  Brine is required while mining in permafrost, and it will be recirculated during mining operations.  All excess underground water will be pumped to the surface and stored in two surface ponds (GSP1 and GSP2).  The water salinity will vary from approximately 5.8 to 12% and as such, no water treatment is expected to be required.  The capacity of the two ponds is believed to be sufficient to store all underground water during operations.  At the end of the mine life, all of the water will be pumped back into the underground mine void.

Ore from the underground mine will be prioritized for transportation to the Meadowbank Processing Plant as it is expected to have a higher gold content.  Underground tailings will be mixed with open pit tailings prior to deposit in-pit at the Meadowbank site.

In 2018, the Company investigated methods to maximize milling capacity and accommodate the additional tonnage from the underground deposit.  The addition of high pressure grinding rolls ("HPGR") as a tertiary crusher was the preferred method.  In this scenario, it was expected a 12,000 tpd throughput could be achieved, with the potential to lower mill operating costs.  Additional tests were carried out in 2020 that confirmed HPGR technology was applicable to ore from the Whale Tail deposit.

From 2022 to 2026, average annual production is expected to be approximately 100,000 ounces of gold at average total cash costs per ounce of $749 and AISC of $826 per ounce.  Initial capital costs are estimated at $140 million, while sustaining capital costs are expected to be $38 million.  Using a gold price of $1,550 per ounce, and a C$/US$ foreign exchange rate assumption of 1.30, the Amaruq underground project has an after-tax internal rate of return ("IRR") of 28% and an after-tax NPV (at a 5% discount rate) of $105 million.

Operating parameters based on an internal technical study are set out in the table below.

The underground mineralization is open in several directions.  Any potential increase in open pit mine life could support increased underground production.  Exploration activities at the Meadowbank Complex in 2021 are focused on the delineating new near surface ore sources.

Odyssey Project – Drilling Significantly Expands Inferred Mineral Resources at East Gouldie Supporting Approval of Underground Mine Development

Expanded Drill Program at East Gouldie Zone Increases Inferred Mineral Resource by 134% to 6.4 Million Ounces of Gold (100% Basis)

The Canadian Malartic property, together with the Rand Malartic and Midway properties, cover in excess of 25 kilometres along the Cadillac-Larder Lake deformation zone.

Operations at Canadian Malartic are undertaken through the Canadian Malartic General Partnership (the "Partnership"), in which the Company has a 50% interest.  Primary exploration target at Canadian Malartic during 2020 was the East Gouldie Zone, which was discovered in late 2018 at underground depths approximately 1.5 kilometres east of the Canadian Malartic/Barnat open pit and south of the East Malartic and Odyssey underground zones.  The East Gouldie Zone has a strike length of 1,400 metres in an east-west direction, dips 60 degrees north, and extends from 700 metres to 1,900 metres depth below surface.

Drill results from East Gouldie were last reported in the Company's news release dated October 28, 2020.

Exploration drilling at East Gouldie in 2020 totalled 97,250 metres (100% basis), including 25,600 metres in the fourth quarter with multiple mother holes and wedge cuts that resulted in 25 new pierce points in the zone, plus several more in the Odyssey related zones.

To date at East Gouldie, the Partnership has drilled 179,800 metres for an aggregate of 133 pierce points.

The intensive drilling program in 2020 has allowed the Partnership to increase the inferred mineral resource of the East Gouldie Zone by 134% to 6.4 million ounces of gold (with Agnico Eagle's 50% interest representing 3.2 million ounces of gold from 31.5 million tonnes grading 3.17 g/t gold) compared to the initial inferred mineral resource declared at year-end 2019.

There are currently 11 drill rigs targeting the East Gouldie Zone in a program designed to continue expanding the mineral resource envelope with a 150-metre drill spacing pattern and tightening the drill spacing in the zone's high-grade core to 75 metres.

The East Gouldie Zone is divided into two main parallel and closely spaced sub-zones, named East Gouldie North and East Gouldie South, which are complemented by additional nearby sub-zones to the north, in between, and to the south of these two main sub-zones.  The sub-zone associated with each drill intersection is indicated in the table below.

Selected recent drill intercepts from the East Gouldie Zone are set out in the table below.  The pierce points are shown on the Canadian Malartic and Odyssey – Composite Longitudinal Section, and drill hole collar coordinates are set out in a table in the Appendix.  The intercepts reported for East Gouldie show uncapped and capped gold grades over estimated true widths, based on a preliminary geological interpretation that is being updated as new information becomes available with further drilling.

Selected recent drill results from the East Gouldie Zone at Canadian Malartic

[Canadian Malartic and Odyssey – Composite Longitudinal Section]

Drilling during the fourth quarter of 2020 continued to demonstrate the robustness and continuity of the East Gouldie Zone's high-grade core.  Hole MEX20-169AWD, drilled in the lower middle portion of the core, intersected 7.0 g/t gold over 13.9 metres at a depth of 1,576 metres.

Towards the eastern edge of the East Gouldie Zone, hole MEX20-189A intersected 3.2 g/t gold over 13.9 metres at 1,444 metres depth and 4.5 g/t over 17.8 metres at 1,465 metres depth.  Approximately 40 metres east of hole MEX20-189A at the eastern edge of the mineral resource envelope, hole MEX20-191 intersected 4.0 g/t gold over 14.9 metres at 1,489 metres depth and 3.5 g/t gold over 10.7 metres at 1,510 metres depth.  The above intersections demonstrate that the East Gouldie Zone is open down-plunge towards the east, warranting further investigation during the 2021 drilling campaign.

In 2021, the Company expects to spend $11.9 million (50% basis) for 141,400 metres (100% basis) of exploration and conversion drilling focused on continued infilling of the East Gouldie Zone to improve confidence in the mineral resource and refine the geological model.  The zone remains open laterally and down-plunge.

The Odyssey project also contains other mineralized zones with significant mineral resources including:

• East Malartic, with 736,000 ounces of indicated mineral resources (11.3 million tonnes grading 2.03 g/t gold) and 5.3 million ounces of inferred mineral resources (86.9 million tonnes grading 1.91 g/t gold)
  
  
• Odyssey North and South, with 122,000 ounces of indicated mineral resources (2.0 million tonnes grading 1.90 g/t gold) and 1.8 million ounces of inferred mineral resources (27.7 million tonnes grading 2.05 g/t gold)

The above mineral resources are as of December 31, 2020 and are reported on a 100% basis.  For a detailed discussion of mineral reserves and mineral resources see "Detailed Mineral Reserve and Mineral Resource Data (as at December 31, 2020)".

In 2021, the Company also expects to spend $3.2 million (50% basis) on 32,000 metres (100% basis) of exploration drilling to test other regional targets at Canadian Malartic, including the Rand Malartic and East Amphi properties.

Odyssey Project Approved for Underground Mine Development

Following the completion of an internal technical study in late 2020, the Partnership has approved the construction of a new underground mining complex at the Odyssey project.  The results of this study are being incorporated into section 24 of a National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") technical report for the Canadian Malartic operation (the "CM Report").  The CM Report is expected to be filed on SEDAR in March 2021.

The Odyssey project hosts three main underground-mineralized zones, which are East Gouldie, East Malartic, and Odyssey, the latter of which is sub-divided into the Odyssey North, Odyssey South and Odyssey Internal zones. For the purpose of the technical study, mineable stope shapes were generated using a gold price of $1,250 per ounce, consistent with the price used for estimating Canadian Malartic open pit mineral reserves. Mineral resources at East Malartic below 600 metres from surface are not currently included in the technical study. A breakdown of the mineral resources used in the technical study, after dilution and mining recovery, is presented in the table below.  For a detailed discussion of mineral reserves and mineral resources see "Detailed Mineral Reserve and Mineral Resource Data (as at December 31, 2020)".

The shallow mineralized zones located above 600 metres below surface will be mined using a ramp from surface.  The deeper mineralized zones below 600 metres from surface will be mined with a production shaft.

In December 2020, ramp development was started on the Odyssey project in order to facilitate underground conversion drilling in 2021 and provide access to the Odyssey and East Malartic deposits.  At year-end 2020, the ramp had progressed 102 metres, and an additional 1,500 metres of ramp development is planned in 2021.

The conceptual mine design in the CM Report includes a 1,800 metres deep production-services shaft with an expected capacity of approximately 20,000 tpd.  The project will also benefit from the existing infrastructure at the Canadian Malartic site, including the tailing storage facilities, the processing plant and the maintenance facilities.

The preliminary mining concept is based on a sublevel open stoping mining method with paste backfill.  Longitudinal retreat and transverse primary-secondary mining methods will also be used dependent on mineralization geometry and stope design criteria.

The project is expected to use a combination of conventional and automated equipment, similar to what is currently used at the LaRonde Complex.  On the two main levels with loading pockets, trucks and hammers are expected to be remotely operated 24 hours a day 7 days a week from a surface control room, increasing equipment utilization.  The Partnership will continue to evaluate opportunities to optimize the project.

Production via the ramp is expected to begin at Odyssey South in late 2023, increasing up to 3,500 tpd in 2024.  Collaring of the shaft and installation of the headframe is expected to commence in the second quarter of 2021, with shaft sinking activities expected to begin in late 2022.  The shaft will have an estimated depth of 1,800 metres and the first loading station is expected to be commissioned in 2027 with modest production from East Gouldie.  The East Malartic shallow area and Odyssey North are scheduled to enter into production in 2029 and 2030 respectively.

The forecast parameters surrounding the Company's proposed operations at the Odyssey project were based on the CM Report, which is preliminary in nature and includes inferred mineral resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the forecast production amounts will be realized. The basis for the CM Report and the qualifications and assumptions made by the qualified person who undertook the CM Report are set out in this news release. The results of the CM Report had no impact on the results of any pre-feasibility or feasibility study in respect of the Odyssey project.

Many of the design criteria and parameters are similar to Agnico Eagle's existing operating mines in the region.  The project is expected to mine 19,000 tpd from the underground from four different mining zones:

• East Gouldie – 12,500 tpd
• Stope production starts in 2027
• 3-year ramp up (2027-2029)
• Full stope production in 2030 to 2038
• Odyssey North – 3,500 tpd
• Stope production starts in 2030
• Full stope production in 2031-2038
• Odyssey South – 3,500 tpd
• Stope production starts in 2023
• Full stope production in 2024 to 2027
• East Malartic – 3,200 tpd
• Stope production starts in 2028
• Full stope production in 2030 to 2039

Run-of–mine ore from the pit will start to decrease in 2023, as the ore production from the underground starts at a rate of 3,000 tpd.  The underground should reach full production of approximately 19,000 tpd by 2031.

Capital expenditures from 2021 to 2028 are expected to total approximately $1.34 billion (on a 100% basis), which includes $1,144 million in initial capital expenditures and $191 million in additional growth capital expenditures.  This total does not include any offsetting revenue from pre-commercial sales.  Effective for annual periods beginning on or after January 1, 2022, revenue and related production costs incurred during the pre-commercial production phase are recognized in the Company's statements of income (loss) based on the IAS16 Amendment from the International Accounting Standards Board.  During the 2021 to 2028 period, gold production is forecast to be approximately 932,000 ounces at total cash costs of approximately $800 per ounce (all numbers on a 100% basis).

Average annual payable production is approximately 545,400 ounces of gold from 2029 to 2039, with total cash costs per ounce of approximately $630.  Sustaining capital expenditures are expected to gradually decline from 2029 to 2039, with an expected average of approximately $56 million per year.

Using a gold price of $1,550 per ounce and a C$/US$ foreign exchange rate assumption of 1.30, the Odyssey project has an after-tax IRR of 17.5% and an after-tax NPV (at a 5% discount rate) of $1.143B.  The project has excellent exploration potential and is currently expected to have a mine life of 17 years, including 10 years of payable gold production averaging 545,400 ounces per year (all numbers on a 100% basis).

Updated Odyssey project operating parameters from the CM Report and the updated guidance for 2021 are set out in the table below.  The production profile for the Canadian Malartic mine, including production from the pits and the Odyssey project, is provided below.

Given the strong underground mining experience of the Partnership and the experience gained from operating the Canadian Malartic mine since 2014, the Company is confident in the cost assumptions used for the project.  The Company believes that estimates for such things as underground development and mining costs, processing costs, and equipment procurement are more advanced than what would typically be estimated in a Preliminary Economic Assessment level study.  The capital allocation will continue to be refined as the project advances.

At Odyssey, the East Gouldie deposit has the highest tonnage and grade and contains more than 70% of the total ounces produced.  The focus of the ongoing diamond drilling campaign from surface is to further define high quality mineral resources by the beginning of 2023 with a drill hole spacing of 75 metres.  Improving the geological confidence of the mineral resources is expected to further de-risk the future production.  With additional exploration, the Company believes that additional mineralization will come into the mine plan in the coming years.

Permits for Odyssey North and South were granted in 2020 to allow the first phase of the project to begin.  At this time, the Certificate of Authorization ("CofA") for the shaft has not yet been obtained and the CofA for the waste rock management requires modification.

A request for a decree amendment, including permits to develop the East Gouldie and East-Malartic zones will be sent to the Quebec "Ministère de l'Environnement et de la Lutte contre les changements climatiques" on February 12, 2021.  The Partnership has received confirmation that mining the additional zones at the project does not trigger additional Federal permitting requirements.

Hope Bay – Focus is to design an optimal mining and milling strategy around the geological potential of the land package

On February 2, 2021, Agnico Eagle completed the acquisition of TMAC.  The cost of the acquisition was approximately $226 million (equity value), plus the assumption of TMAC's outstanding debt of $134 million.  The change of control of TMAC triggered a one-time option to buy-back a 1.5% net smelter return ("NSR") royalty on Hope Bay from Maverix Metals Inc. for $50 million.  Agnico Eagle has provided notice that it intends to exercise this buy-back option, and the buy-back is expected to close in mid-February 2021.  The cost of the royalty buy-back will be incorporated into the ultimate TMAC purchase price for accounting purposes.  Maverix Metals Inc. still retains a 1% NSR royalty.

With the acquisition of TMAC, the Company acquires a 100% interest in the Hope Bay Property, which is located in the Kitikmeot region of Nunavut, approximately 685 kilometres northeast of Yellowknife and 125 kilometres southwest of Cambridge Bay.  The land package includes the Hope Bay and Elu greenstone belts.  The 80-kilometre long Hope Bay greenstone belt hosts three gold deposits (Doris, Madrid and Boston) with historical mineral reserves and mineral resources and over 90 regional exploration targets.  Agnico Eagle believes that Hope Bay is similar in scale and scope to its Meliadine property.

The property contains significant infrastructure including:

• Underground mine development at the Doris and Boston deposits
• A fully enclosed processing plant and a tailings impoundment area at Doris
• A gravel air strip at Doris capable of handling Boing 737 aircraft and a secondary gravel air strip at Boston
• A port with a laydown facility and fuel storage at Roberts Bay
• An all-weather road network, a diesel power plant and an office-accommodations complex

TMAC has established relationships with Inuit residents and organizations and the Government of Nunavut.  An Inuit Impact and Benefits Agreement is in place with the Kitikmeot Inuit Association. Historically, a portion of the workforce has come from Nunavut and TMAC was also successful in sourcing workers from across Canada, with a large component coming from Western Canadian labour markets.

Hope Bay Property Hosts Three Known Deposits Containing Significant Mineral Reserves and Mineral Resources

The Doris gold deposit consists of north-south trending, structurally controlled quartz veins in sheared and altered mafic volcanic rocks. Gold occurs in the veins both as disseminations and in association with pyrite. Veins typically range from a few centimetres to several metres in width and the veins can be traced for up to 3.0 kilometres along strike.

At the Madrid area, several mineralized zones have been delineated within a north-south trending package of sheared and altered mafic volcanic, gabbroic and ultramafic rocks.  The gold mineralization typically occurs with pyrite in quartz-carbonate stockworks.

The geology in the area of the Boston deposit is an assemblage of mafic and felsic volcanic rocks in contact with sedimentary rocks, all of which are complexly folded.  Gold mineralization occurs in structurally controlled quartz-carbonate veins with disseminated pyrite.  The veins are typically developed along lithological contacts.

The Hope Bay Project has been subject to a significant amount of diamond drilling both by TMAC and previous operators.  A NI 43-101 technical report published by TMAC on March 30, 2020, titled "NI 43-101 Technical Report On The Hope Bay Property, Nunavut, Canada" set out estimated mineral reserves and mineral resources at Hope Bay. While the Company reviewed this historical estimate as part of its due diligence investigation of TMAC and believes it to be relevant and reliable, a qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the Company is not treating the historical estimate as current mineral resources or mineral reserves.  TMAC's technical report contained measured mineral resources of 0.48 million ounces of gold (1.6 million tonnes grading 9.5 g/t gold) and indicated mineral resources of 4.69 million ounces (20.2 million tonnes grading 7.2 g/t gold).  Contained within the measured and indicated mineral resources were proven mineral reserves of 0.01 million ounces (0.1 million tonnes grading 4.1 g/t gold) and probable mineral reserves of 3.53 million ounces (16.8 million tonnes at 6.5 g/t gold).  In addition, there was also inferred mineral resources of 2.13 million ounces (10.9 million tonnes at 6.1 g/t gold).  The mineral reserve estimate above was prepared using an average long-term gold price of US$1,325 per ounce, a C$/US$ exchange rate of 1.34 and a cut-off grade of 4.0 g/t gold for longhole stopes, 3.0 g/t gold for incremental development ore required for mining and 2.0 g/t gold for the Madrid North crown pillar surface mining.  The mineral resource estimate above was prepared using an average long-term gold price of US$1,500 per ounce, a C$/US$ exchange rate of 1.34 and a block cut-off grade of 3.5 g/t gold.

Near-Term Focus is to Optimize the Doris Mining Operations While Remaining Cashflow Neutral in 2021

At the Doris deposit, long-hole mining methods are employed to exploit the vein hosted mineralization.  Stopes are backfilled using unconsolidated rock fill.  In the current mining plan, cemented rock fill ("CRF") is expected to be implemented.  The CRF is expected to be mixed at surface and trucked to the stopes underground.  Ground conditions at Doris are good, and standard ground support systems are used.

The Doris mill facility has a design capacity of approximately 2,000 tpd.  It is currently being operated with a three week on and a three week off rotation.  The plant recovers gold from the ore using a combination of crushing, grinding, gravity concentration, flotation and cyanide leaching.

In 2021, the Company expects to continue mining at the Doris deposit while undertaking optimization efforts.  Assuming a gold price of $1,750 per ounce and a C$/US$ foreign exchange rate of 1.30, Hope Bay is forecast to be approximately cash flow neutral in 2021.  Hope Bay is not currently included in the Company's production, cost or capital expenditure guidance for 2021.  On a quarterly basis, Doris is expected to produce approximately 18,000 to 20,000 ounces of gold at total cash costs per ounce of $950 to $975.

Key permits and approvals required to construct and mine the Doris, Madrid and Boston deposits at up to 4,000 tpd are already in place.  Significant changes to the operational plans may require amendments to the existing permits.

Underground water inflow is currently mitigated through a combination of grouting and seasonal storage in the tailings facility.  During the summer months water is processed through a treatment plant to remove impurities and suspended solids and is then discharged to the sea.  Permits to discharge to the sea are in place, but the Company will be seeking approval from Nunavut Impact Review Board ("NIRB") to make modification to the diffuser in 2021.

Longer-term Focus will be on Exploration and Evaluation of Larger Production Scenarios

In 2021, the Company expects to continue mining at the Doris deposit while undertaking optimization efforts, as well as initiating a property wide exploration program and evaluating the Madrid and Boston deposits for future production.  The Company believes that Hope Bay could ultimately produce 250,000 to 300,000 ounces of gold per year at reasonable costs and capital spending levels.

Agnico Eagle believes that there is excellent potential to increase mineral resources through exploration.  At the Hope Bay mine, the Company expects to spend $16.2 million for 69,600 metres of drilling, including $5.5 million for 29,800 metres of delineation drilling to support production at the Doris mine and $10.7 million for 39,800 metres of drilling on exploration targets around the Doris, Madrid and Boston deposits and other targets along the belt.  The Company is currently evaluating exploration priorities and metres allocated on each program and may adjust the allocation during the course of 2021.

There is good potential to add to the mineral resources at Doris beneath the diabase dike with continued drilling on the BTD Extension, BTD Connector and BTD Central zones.  Historical results at the BTD connector intersected 10.7 g/t gold over 4.3 metres at a depth of approximately 600 metres.  At BTD Central, historical drilling intersected up to 22.5 g/t gold over 4.9 metres at a depth of approximately 450 metres.  Exploration drilling by TMAC in 2019 in the Doris Valley area, approximately 350 metres north of the BTD Extension zone, intersected 9.0 g/t gold over 8.5 metres at a shallow depth below surface.

There are high-grade exploration intercepts beneath the Madrid Suluk zone mineral resources (up to 10.8 g/t gold over 9.3 metres at approximately 660 metres depth) and along strike to the south in the Patch 7 area (up to 14.4 g/t gold over 7.4 metres at approximately 300 metres depth).  Continued drilling to upgrade inferred mineral resources and identify higher-grade trends has the potential to add to the mineral resources at Madrid North.

Exploration drilling below the mineral resources at Boston by TMAC in 2019 also intersected high-grade mineralization, including 20.2 g/t gold over 3.4 metres at approximately 550 metres depth.  Historical drilling by a previous operator intersected significant mineralization at approximately 1,000 metres below surface (56.6 g/t gold over 8.7 metres).  Continued drilling has the potential to add to the Boston mineral resources.

There is also good exploration potential elsewhere within the Hope Bay and Elu greenstone belts.  The majority of historical and recent exploration has focused on defining and expanding the known deposits.  To date, over 90 regional exploration targets have been defined by surface mapping and sampling, and geophysical and geochemical surveys.

Longer-Term Pipeline Opportunities – Potential for Production Growth Beyond 2024; Upper Beaver Technical Study Advancing; Hammond Reef declares Initial Mineral Reserves

Agnico Eagle has a strong pipeline of development projects that could provide further gold production growth beyond 2024.  These opportunities are typically at an earlier stage than those outlined above.  A brief summary of the longer-term opportunities is set out in the following table.  More detailed updates on the Upper Beaver and Hammond Reef projects are set out below.

Kirkland Lake Project – 2020 Drilling Focused on Infilling and Expanding Mineral Resources at Upper Beaver Deposit; High-Grade Footwall Zone Remains Open at Depth

The 100% owned Kirkland Lake project in northeastern Ontario covers approximately 25,506 hectares, a large property that is approximately 35 kilometres long by 17 kilometres wide.

Exploration activity at the project during the fourth quarter of 2020 focused on conversion drilling of shallow and deep mineral resources at the Upper Beaver deposit.  Three drill rigs targeted the shallow mineralization and three drill rigs targeted mineralization at depths between 1,050 and 1,600 metres below surface, completing 51 drill holes or branches totalling 14,700 metres.  During all of 2020, 103 holes or branches were drilled, totalling 28,300 metres at the Kirkland Lake project, mostly at Upper Beaver.

Exploration results from Upper Beaver were last reported in the Company's news release dated October 28, 2020.

The Upper Beaver deposit's gold-copper mineralization is mainly hosted in the Upper Beaver alkalic intrusive complex and the surrounding basalts it intruded, and is associated with disseminated pyrite and chalcopyrite, and magnetite-sulphide veining associated with strong magmatic-hydrothermal alteration.  The mineralization occurs as elongated tabular bodies that strike northeast, dip steeply northwest and plunge 65 degrees to the northeast.  The mineralization has been defined along a 400-metre strike length from surface to a depth of 2,000 metres and it remains open at depth.

As of December 31, 2020, Upper Beaver has approximately 1.4 million ounces of gold and 20,000 tonnes of copper in underground probable mineral reserves (8.0 million tonnes grading 5.43 g/t gold and 0.25% copper); 403,000 ounces of gold and 5,100 tonnes of copper in underground indicated mineral resources (3.6 million tonnes grading 3.45 g/t and 0.14% copper); and 1.4 million ounces of gold and 17,300 tonnes of copper in underground inferred mineral resources (8.7 million tonnes grading 5.07 g/t and 0.20% copper).  For a detailed discussion of mineral reserves and mineral resources see "Detailed Mineral Reserve and Mineral Resource Data (as at December 31, 2020)".

Selected recent intercepts from deep drilling at the Upper Beaver deposit at the Kirkland Lake project are set out in the table below.  The pierce points are shown on the Kirkland Lake Project – Upper Beaver Composite Longitudinal Section and the drill collar coordinates are set out in a table in the Appendix.  All intercepts reported for the Kirkland Lake project show uncapped and capped gold grades and uncapped copper grades over estimated true widths, based on a preliminary geological interpretation that is being updated as new information becomes available with further drilling.

Selected recent deep exploration drill results from the Upper Beaver deposit at the Kirkland Lake project

[Kirkland Lake Project – Upper Beaver Composite Longitudinal Section]

Deep drilling at Upper Beaver during the fourth quarter of 2020 targeted the Deep East Porphyry zone and the nearby, subparallel Deep Footwall zone at depths ranging between 1,050 and 1,600 metres below surface.

Hole KLUB20-307W2, the deepest conversion hole drilled in 2020, targeted the down-plunge extension of the Deep Footwall zone and returned multiple intercepts including 4.5 g/t gold and 0.46% copper over 3.6 metres at 1,410 metres depth; 4.9 g/t gold and 0.91% copper over 7.8 metres at 1,439 metres depth; and 17.3 g/t gold and 1.35% copper over 3.3 metres at 1,455 metres depth.  The deepest intersection is approximately 40 metres down-plunge from the currently defined mineral resource outline, indicating the potential to extend the Deep Footwall zone mineral resource further at depth.

All three branches from pilot hole KLUB20-310A (including previously reported hole KLUB20-310AW1) intersected significant mineralization near the eastern margin of the Deep Footwall zone's mineral resource outline, including hole KLUB20-310AW2, which intersected 5.5 g/t gold and 3.53% copper over 8.3 metres at 1,352 metres depth; and hole KLUB20-310AW3, which intersected 25.4 g/t gold and 0.51% copper over 3.8 metres at 1,326 metres depth.

The above results demonstrate the continuity of mineralization within and beyond the known Deep Footwall zone mineralized shoot, indicating the potential for mineral resource growth at depth and laterally.

In conversion drilling at depth in the Deep East Porphyry zone, holes KLUB20-200W13, KLUB20-200W14, KLUB20-200W16 and KLUB20-307W1 demonstrated good continuity of mineralization along the western edge of the ore-shoot over a 135-metre strike length.  Higher copper grades were also observed in this portion of the zone, with hole KLUB20-200W16 intersecting 17.9 g/t gold and 1.39% copper over 4.4 metres at 1,392 metres depth.

Other highlights from conversion drilling in the Deep East Porphyry zone include: hole KLUB20-163W9, which intersected 20.7 g/t gold and 0.03% copper over 3.5 metres at 1,192 metres depth and 6.5 g/t gold and 0.35% copper over 3.0 metres at 1,202 metres depth; and hole KLUB20-307W2, which intersected 15.2 g/t gold and 0.89% copper over 4.4 metres at 1,367 metres depth.

In 2021, the Company plans to drill 36,500 metres at Upper Beaver in a program that will include additional shallow drilling to test an open pit concept and further deep drilling to convert mineral resources to mineral reserves.  An internal technical study at Upper Beaver that will include an updated mineral reserve and mineral resource estimate incorporating drill results from 2020 and 2021 is expected to be completed by the end of 2021.

Elsewhere on the Kirkland Lake property in 2021, the Company plans to drill 15,700 metres in a regional exploration program that will include Upper Canada and Bidgood as targets.

Hammond Reef – First Mineral Reserves Declared; Optimization Studies Ongoing to Further Improve Project Economics

The 100% owned Hammond Reef property in northwestern Ontario covers approximately 32,070 hectares, and is located approximately 260 kilometres west of Thunder Bay.  The property is accessible via secondary gravel roads from the town of Atikokan, which is located approximately 30 kilometres to the southwest.

The Hammond Reef deposit is a high tonnage low grade gold deposit that is primarily hosted in variably sheared and altered granitoid rocks.  Gold mineralization is typically associated with fine grained pyrite mineralization that is often associated with fractures, veinlets and veins filled with various combinations of chlorite, calcite and quartz.

Resource sharing agreements with local First Nations are in place and the project has received environmental approval from both Federal and Provincial agencies.  In January 2020, the Company exercised its right of first refusal to repurchase a 2% NSR royalty on the Hammond Reef project from Kinross Gold Corporation for $12 million.  The property remains subject to a 2% NSR royalty held by Osisko Royalties.

A positive internal technical study at Hammond Reef was completed by the Company in 2020, which resulted in the declaration of the first mineral reserves for the project on December 31, 2020.  Open pit mineral reserves are estimated at 3.32 million ounces of gold (123.5 million tonnes grading 0.84 g/t gold).  In addition, the project contains 2.3 million ounces of measured and indicated mineral resources (133.4 million tonnes grading 0.54 g/t gold).  Mineral reserves were calculated using a gold price of $1,350 per ounce and a C$/US$ foreign exchange rate assumption of 1.30.  For a detailed discussion of mineral reserves and mineral resources see "Detailed Mineral Reserve and Mineral Resource Data (as at December 31, 2020)".  Set out below is a summary of the internal technical study at Hammond Reef.

Mining activities are expected to be carried out in two separate pits (East and West Pits) with a 30-metre buffer zone from the Marmion water reservoir.  The West Pit contains three sequential mining phases and the East Pit has one mining phase for a total of four phases over the projected 12-year mine life.

The plant will utilize a conventional milling process with a design capacity of 30,000 tpd, and an average recovery of 89.1%.  Tailings will be contained in a conventional tailings storage facility that will comply with guidelines issued by the Mining Association of Canada and the Canadian Dam Association.

Average annual gold production is expected to be approximately 272,000 ounces at average total cash costs of $748 per ounce and average AISC of $806 per ounce.  Initial capital costs are approximately $1.0 billion.  Total sustaining capital and closure costs are approximately $112 million and $47 million, respectively.

Using a gold price of $1,550 per ounce, and a C$/US$ foreign exchange rate assumption of 1.30, the Hammond Reef project has an after-tax IRR of 9.8% and an after-tax NPV (at a 5% discount rate) of approximately $245 million.  Additional details on the project are described below.