AGNICO EAGLE MINES LTD, 6-K filed on 5/10/2013
Report of Foreign Issuer
Document and Entity Information
3 Months Ended
Mar. 31, 2013
Document and Entity Information
 
Entity Registrant Name
AGNICO EAGLE MINES LTD 
Entity Central Index Key
0000002809 
Document Type
6-K 
Document Period End Date
Mar. 31, 2013 
Amendment Flag
false 
Current Fiscal Year End Date
--12-31 
Entity Current Reporting Status
Yes 
Entity Filer Category
Large Accelerated Filer 
Document Fiscal Year Focus
2013 
Document Fiscal Period Focus
Q1 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Current
 
 
Cash and cash equivalents
$ 232,285 
$ 298,068 
Short-term investments
7,186 
8,490 
Restricted cash
24,924 
25,450 
Trade receivables (note 4)
70,526 
67,750 
Inventories:
 
 
Ore stockpiles
61,325 
52,342 
Concentrates and dore bars
68,312 
69,695 
Supplies
191,479 
222,630 
Income taxes recoverable
27,077 
19,313 
Available-for-sale securities (notes 4 and 8)
55,309 
44,719 
Fair value of derivative financial instruments (notes 4 and 10)
5,308 
1,835 
Other current assets
97,988 
92,977 
Total current assets
841,719 
903,269 
Other assets
50,685 
55,838 
Goodwill (note 14)
229,279 
229,279 
Property, plant and mine development (note 5)
4,129,137 
4,067,456 
TOTAL ASSETS
5,250,820 
5,255,842 
Current
 
 
Accounts payable and accrued liabilities
177,898 
185,329 
Reclamation provision (note 13)
14,158 
16,816 
Dividends payable
 
37,905 
Interest payable (note 9)
20,877 
13,602 
Income taxes payable
13,917 
10,061 
Capital lease obligations
11,347 
12,955 
Fair value of derivative financial instruments (notes 4 and 10)
700 
 
Total current liabilities
238,897 
276,668 
Long-term debt (note 9)
800,000 
830,000 
Reclamation provision and other liabilities
125,289 
127,735 
Deferred income and mining tax liabilities
623,253 
611,227 
SHAREHOLDERS' EQUITY
 
 
Common shares (note 6): Outstanding - 172,867,524 common shares issued, less 491,417 shares held in trust
3,249,744 
3,241,922 
Stock options (notes 6 and 7)
158,437 
148,032 
Warrants (note 6)
24,858 
24,858 
Contributed surplus
15,665 
15,665 
Retained earnings
31,000 
7,046 
Accumulated other comprehensive loss (note 6)
(16,323)
(27,311)
Total shareholders' equity
3,463,381 
3,410,212 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 5,250,820 
$ 5,255,842 
CONSOLIDATED BALANCE SHEETS (Parenthetical)
Mar. 31, 2013
CONSOLIDATED BALANCE SHEETS
 
Common shares, issued
172,867,524 
Treasury shares, held in trust
491,417 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
REVENUES
 
 
Revenues from mining operations
$ 420,422 
$ 472,934 
COSTS, EXPENSES AND OTHER INCOME
 
 
Production (exclusive of amortization shown separately below)
230,053 
215,035 
Exploration and corporate development
8,571 
23,108 
Amortization of property, plant and mine development (note 5)
70,071 
64,553 
General and administrative (note 15)
37,320 
33,928 
Impairment loss on available-for-sale securities (note 8)
10,995 
 
Interest expense (note 9)
13,916 
14,447 
Interest and sundry expense (income)
212 
(269)
Gain on derivative financial instruments (notes 4 and 10)
(2,982)
(895)
Foreign currency translation loss
3,658 
15,517 
Income before income and mining taxes
48,608 
107,510 
Income and mining taxes
24,749 
28,962 
Net income for the period
23,859 
78,548 
Net income per share - basic (note 6) (in dollars per share)
$ 0.14 
$ 0.46 
Net income per share - diluted (note 6) (in dollars per share)
$ 0.14 
$ 0.46 
Cash dividends declared per common share (in dollars per share)
   
$ 0.20 
COMPREHENSIVE INCOME
 
 
Net income for the period
23,859 
78,548 
Available-for-sale securities (notes 4 and 8):
 
 
Unrealized loss
(173)
(15,019)
Reclassification to impairment loss on available-for-sale securities
10,995 
 
Derivative financial instruments (notes 4 and 10):
 
 
Unrealized gain
81 
7,274 
Reclassification to production costs
 
(510)
Reclassification to interest expense
10 
 
Pension benefits:
 
 
Reclassification to general and administrative expense
131 
224 
Income tax impact of reclassification items
(37)
75 
Income tax impact of other comprehensive income (loss) items
(19)
(1,919)
Other comprehensive income (loss) for the period
10,988 
(9,875)
Comprehensive income for the period
$ 34,847 
$ 68,673 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Common Shares Outstanding
Stock Options
Warrants
Contributed Surplus
Retained Earnings (Deficit)
Accumulated Other Comprehensive Loss
Non-Controlling Interest
Balance at Dec. 31, 2011
 
$ 3,181,381 
$ 117,694 
$ 24,858 
$ 15,166 
$ (129,021)
$ (7,106)
$ 12,191 
Balance (in shares) at Dec. 31, 2011
 
170,813,736 
 
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
 
Stock options (notes 6 and 7)
 
 
12,268 
 
 
 
 
 
Shares issued under incentive share purchase plan
 
5,346 
 
 
 
 
 
 
Shares issued under incentive share purchase plan (in shares)
 
160,207 
 
 
 
 
 
 
Shares issued under dividend reinvestment plan
 
3,607 
 
 
 
 
 
 
Shares issued under dividend reinvestment plan (in shares)
 
105,678 
 
 
 
 
 
 
Shares issued for purchase of mining property (note 14)
 
2,447 
 
 
499 
 
 
 
Shares issued for purchase of mining property (note 14) (in shares)
 
68,941 
 
 
 
 
 
 
Non-controlling interest eliminated upon acquisition (note 14)
 
 
 
 
 
 
 
(12,191)
Net income for the period
 
 
 
 
 
78,548 
 
 
Dividends declared (nil and $0.20 per share for the period ended March 31, 2013 and 2012, respectively)
 
 
 
 
 
(34,106)
 
 
Other comprehensive income (loss) for the period
(9,875)
 
 
 
 
 
(9,875)
 
Restricted share unit plan (note 6)
 
(9,858)
 
 
 
 
 
 
Restricted share unit plan (note 6) (in shares)
 
(268,232)
 
 
 
 
 
 
Balance at Mar. 31, 2012
 
3,182,923 
129,962 
24,858 
15,665 
(84,579)
(16,981)
Balance (in shares) at Mar. 31, 2012
 
170,880,330 
 
 
 
 
 
 
Balance at Dec. 31, 2012
3,410,212 
3,241,922 
148,032 
24,858 
15,665 
7,046 
(27,311)
Balance (in shares) at Dec. 31, 2012
 
172,102,870 
 
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
 
Stock options (notes 6 and 7)
 
 
13,688 
 
 
 
 
Shares issued under employee stock option plan (notes 6 and 7)
 
9,720 
(3,283)
 
 
 
 
 
Shares issued under employee stock option plan (notes 6 and 7)
 
212,500 
 
 
 
 
 
 
Shares issued under incentive share purchase plan
 
5,937 
 
 
 
 
 
 
Shares issued under incentive share purchase plan (in shares)
 
146,583 
 
 
 
 
 
 
Shares issued under dividend reinvestment plan
 
8,088 
 
 
 
 
 
 
Shares issued under dividend reinvestment plan (in shares)
 
211,831 
 
 
 
 
 
 
Shares issued for purchase of mining property (note 14)
 
 
 
 
 
 
 
Net income for the period
 
 
 
 
 
23,859 
 
 
Dividends declared (nil and $0.20 per share for the period ended March 31, 2013 and 2012, respectively)
 
 
 
 
 
(62)
 
 
Other comprehensive income (loss) for the period
10,988 
 
 
 
 
 
10,988 
 
Restricted share unit plan (note 6)
 
(15,923)
 
 
 
157 
 
 
Restricted share unit plan (note 6) (in shares)
 
(297,677)
 
 
 
 
 
 
Balance at Mar. 31, 2013
$ 3,463,381 
$ 3,249,744 
$ 158,437 
$ 24,858 
$ 15,665 
$ 31,000 
$ (16,323)
$ 0 
Balance (in shares) at Mar. 31, 2013
 
172,376,107 
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 
 
Dividends declared (in dollars per share)
    
$ 0.20 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Operating activities
 
 
Net income for the period
$ 23,859 
$ 78,548 
Add (deduct) items not affecting cash:
 
 
Amortization of property, plant and mine development (note 5)
70,071 
64,553 
Deferred income and mining taxes
7,026 
10,320 
Stock-based compensation (note 7)
16,277 
15,772 
Impairment loss on available-for-sale securities (note 8)
10,995 
 
Foreign currency translation loss
3,658 
15,517 
Other
5,131 
2,799 
Adjustment for settlement of environmental remediation
(2,552)
(6,232)
Changes in non-cash working capital balances:
 
 
Trade receivables
(2,776)
(14,993)
Income taxes
(3,908)
19,869 
Inventories
27,992 
11,549 
Other current assets
(5,765)
18,810 
Accounts payable and accrued liabilities
(10,102)
(29,852)
Interest payable
6,166 
9,837 
Cash provided by operating activities
146,072 
196,497 
Investing activities
 
 
Additions to property, plant and mine development (note 5)
(130,634)
(75,995)
Acquisition of Grayd Resource Corporation (note 14)
 
(9,322)
Decrease in short-term investments
1,304 
579 
Purchase of available-for-sale securities and warrants (note 8)
(12,675)
(2,003)
Decrease (increase) in restricted cash
526 
(2,167)
Cash used in investing activities
(141,479)
(88,908)
Financing activities
 
 
Dividends paid
(29,890)
(30,515)
Repayment of capital lease obligations
(2,553)
(3,112)
Proceeds from long-term debt (note 9)
40,000 
 
Repayment of long-term debt (note 9)
(70,000)
(90,000)
Repurchase of common shares for restricted share unit plan (note 6)
(19,000)
(12,031)
Common shares issued
11,939 
3,580 
Cash used in financing activities
(69,504)
(132,078)
Effect of exchange rate changes on cash and cash equivalents
(872)
518 
Net decrease in cash and cash equivalents during the period
(65,783)
(23,971)
Cash and cash equivalents, beginning of period
298,068 
179,447 
Cash and cash equivalents, end of period
232,285 
155,476 
Supplemental cash flow information
 
 
Interest paid (note 9)
6,832 
4,093 
Income and mining taxes paid
$ 21,633 
$ 4,305 
BASIS OF PRESENTATION
BASIS OF PRESENTATION

1.     BASIS OF PRESENTATION

  • The accompanying interim unaudited consolidated financial statements of Agnico Eagle Mines Limited ("Agnico Eagle" or the "Company") have been prepared in accordance with United States generally accepted accounting principles ("US GAAP") in US dollars. They do not include all of the disclosures required by US GAAP for annual financial statements. Accordingly, these interim unaudited consolidated financial statements should be read in conjunction with the fiscal 2012 audited annual consolidated financial statements, including the accounting policies and notes thereto, included in the Annual Report and Annual Information Form/Form 20-F for the year ended December 31, 2012. In the opinion of management, the interim unaudited consolidated financial statements reflect all adjustments, which consist only of normal and recurring adjustments necessary to present fairly the financial position as at March 31, 2013 and the results of operations and cash flows for the three months ended March 31, 2013 and March 31, 2012.

    Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2013.

USE OF ESTIMATES
USE OF ESTIMATES

2.     USE OF ESTIMATES

  • The preparation of the interim unaudited consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the interim unaudited consolidated financial statements and accompanying notes. Management believes that the estimates used in the preparation of the interim unaudited consolidated financial statements are reasonable and prudent; however, actual results may differ from these estimates.

ACCOUNTING POLICIES
ACCOUNTING POLICIES

3.     ACCOUNTING POLICIES

  • These interim unaudited consolidated financial statements follow the same accounting policies and methods of their application as the December 31, 2012 audited annual consolidated financial statements except for the recently adopted accounting pronouncements discussed below.

    Recently Adopted Accounting Pronouncements

    Disclosures about Offsetting Assets and Liabilities

    In November 2011, ASC guidance was issued relating to disclosure on offsetting financial instrument and derivative financial instrument assets and liabilities. Under the updated guidance, entities are required to disclose gross information and net information about both instruments and transactions eligible for offset in the consolidated balance sheets and instruments and transactions subject to an agreement similar to a master netting arrangement. The Company adopted this updated guidance, effective for the fiscal year beginning January 1, 2013. See notes 4 and 10 for disclosure on offsetting financial instrument and derivative financial instrument assets and liabilities.

    Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income

    In February 2013, ASC guidance was issued relating to the reporting of amounts reclassified out of accumulated other comprehensive income. Under the updated guidance, entities are required to provide information about the amounts reclassified out of accumulated other comprehensive income by component and by consolidated statement of income line item, as required under US GAAP. The Company adopted this updated guidance, effective for the fiscal year beginning January 1, 2013. See the Company's interim unaudited consolidated statements of income and comprehensive income for reporting of amounts reclassified out of accumulated other comprehensive income.

FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT

4.     FAIR VALUE MEASUREMENT

  • ASC 820 — Fair Value Measurement and Disclosure defines fair value, establishes a framework for measuring fair value under US GAAP and requires expanded disclosures about fair value measurements including the following three fair value hierarchy levels:

    • Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

      Level 2 — Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

      Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

    Fair value is the value at which a financial instrument could be closed out or sold in a transaction with a willing and knowledgeable counterparty over a period of time consistent with the Company's investment strategy. Fair value is based on quoted market prices, where available. If market quotes are not available, fair value is based on internally developed models that use market-based or independent information as inputs. These models could produce a fair value that may not be reflective of future fair value.

    The following table summarizes the Company's financial assets and liabilities measured at fair value as at March 31, 2013 within the fair value hierarchy:

   
  Level 1   Level 2   Level 3   Total  
 

Financial assets:

                         
 

Trade receivables(i)

  $   $ 70,526   $   $ 70,526  
 

Available-for-sale securities(ii)

    55,309             55,309  
 

Fair value of derivative financial instruments(iii)

        5,308         5,308  
                     
 

 

  $ 55,309   $ 75,834   $   $ 131,143  
                     
 

Financial liabilities:

                         
 

Fair value of derivative financial instruments(iii)

  $   $ 700   $   $ 700  
                     
  • The following table details the Company's financial assets and liabilities measured at fair value as at December 31, 2012 within the fair value hierarchy:

   
  Level 1   Level 2   Level 3   Total  
 

Financial assets:

                         
 

Trade receivables(i)

  $   $ 67,750   $   $ 67,750  
 

Available-for-sale securities(ii)

    44,719             44,719  
 

Fair value of derivative financial instruments(iii)

        2,112         2,112  
                     
 

 

  $ 44,719   $ 69,862   $   $ 114,581  
                     
 

Financial liabilities:

                         
 

Fair value of derivative financial instruments(iii)

  $   $ 277   $   $ 277  
                     

  • (i)
    Trade receivables from provisional invoices for concentrate sales are valued using quoted forward rates derived from observable market data based on the month of expected settlement (classified within Level 2 of the fair value hierarchy).

    (ii)
    Available-for-sale securities are recorded at fair value using quoted market prices (classified within Level 1 of the fair value hierarchy).

    (iii)
    Derivative financial instruments are recorded at fair value using external broker-dealer quotations (classified within Level 2 of the fair value hierarchy).

    In the event that a decline in the fair value of an investment in available-for-sale securities occurs and the decline in value is considered to be other-than-temporary, an impairment charge is recorded in the interim unaudited consolidated statements of income and comprehensive income and a new cost basis for the investment is established. The Company assesses whether a decline in value is considered to be other-than-temporary by considering available evidence, including changes in general market conditions, specific industry and individual company data, the length of time and the extent to which the fair value has been less than cost, the financial condition and the near-term prospects of the individual investment. New evidence could become available in future periods which would affect this assessment and thus could result in material impairment charges with respect to those investments in available-for-sale securities for which the cost basis exceeds its fair value.

PROPERTY, PLANT AND MINE DEVELOPMENT
PROPERTY, PLANT AND MINE DEVELOPMENT

5.     PROPERTY, PLANT AND MINE DEVELOPMENT

   
  As at March 31, 2013   As at December 31, 2012  
   
  Cost   Accumulated
Amortization
  Net Book
Value
  Cost   Accumulated
Amortization
  Net Book
Value
 
 

Mining properties

  $ 1,356,797   $ 106,852   $ 1,249,945   $ 1,356,227   $ 86,839   $ 1,269,388  
 

Plant and equipment

    2,552,940     663,985     1,888,955     2,538,328     617,826     1,920,502  
 

Mine development costs

    956,226     233,988     722,238     918,482     237,967     680,515  
 

Construction in Progress:

                                     
 

Meliadine project

    146,436         146,436     133,840         133,840  
 

La India project

    75,691         75,691     32,553         32,553  
 

Goldex mine M and E zones

    45,872         45,872     30,658         30,658  
                             
 

 

  $ 5,133,962   $ 1,004,825   $ 4,129,137   $ 5,010,088   $ 942,632   $ 4,067,456  
                             
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY

6.     SHAREHOLDERS' EQUITY

  • In 2009, the Company implemented the restricted share unit ("RSU") plan for certain employees. A deferred compensation balance was recorded for the total grant date value on the date of grant. The deferred compensation balance was recorded as a reduction of shareholders' equity and was amortized as compensation expense over the applicable vesting period of two years.

    Effective January 1, 2012, the RSU plan was amended to include directors and senior executives of the Company. A deferred compensation balance was recorded for the total grant date value on the date of grant. The deferred compensation balance was recorded as a reduction of shareholders' equity and is to be amortized as compensation expense over the applicable vesting period of three years.

    During the first quarter of 2013, the Company funded the RSU plan by transferring $19.0 million (first quarter of 2012 — $12.0 million) to an employee benefit trust (the "Trust") that then purchased shares of the Company in the open market. For accounting purposes, the Trust is treated as a variable interest entity and consolidated in the accounts of the Company. On consolidation, the dividends paid on the shares held by the Trust are eliminated. The common shares purchased and held by the Trust are treated as not outstanding for the basic earnings per share ("EPS") calculations. They are included in the basic EPS calculations once they have vested. All of the unvested common shares held by the Trust are included in the diluted EPS calculations.

    The following table summarizes the maximum number of common shares that would be outstanding if all instruments outstanding at March 31, 2013 were exercised:

 

Common shares outstanding at March 31, 2013

    172,376,107  
 

Employee stock options

    11,726,491  
 

Warrants

    8,600,000  
 

RSU plan

    491,417  
         
 

 

    193,194,015  
         
  • The following table provides the weighted average number of common shares used in the calculation of basic and diluted net income per share:

   
  Three Months Ended
March 31,
 
   
  2013   2012  
 

Net income for the period

  $ 23,859   $ 78,548  
             
 

Weighted average number of common shares outstanding — basic (in thousands)

    172,280     170,837  
 

Add: Dilutive impact of employee stock options

         
 

          Dilutive impact of warrants

         
 

          Dilutive impact of shares related to RSU plan

    343     180  
             
 

Weighted average number of common shares outstanding — diluted (in thousands)

    172,623     171,017  
             
 

Net income per share — basic

  $ 0.14   $ 0.46  
             
 

Net income per share — diluted

  $ 0.14   $ 0.46  
             
  • The calculation of diluted net income per share has been calculated using the treasury stock method. In applying the treasury stock method, employee stock options and warrants with an exercise price greater than the average quoted market price of the common shares for the period outstanding are not included in the calculation of diluted net income per share as the impact is anti-dilutive.

    For the first quarter of 2013 and the first quarter of 2012, all employee stock options and warrants were excluded from the calculation of diluted weighted average common shares outstanding as their effect would have been anti-dilutive.

    Accumulated other comprehensive loss

    The following table details the changes in accumulated other comprehensive loss components:

   
  Cumulative
Translation
Adjustment
  Available-for-sale
Securities
  Derivative
Financial
Instruments
  Pension
Benefits
  Total  
 

Balance December 31, 2012

  $ (16,206 ) $ (7,680 ) $ 137   $ (3,562 ) $ (27,311 )
 

Other comprehensive (loss) income before reclassifications

        (173 )   81         (92 )
 

Tax expense

            (19 )       (19 )
 

Amounts reclassified from accumulated other comprehensive loss

        10,995     10     131     11,136  
 

Tax expense

            (3 )   (34 )   (37 )
                         
 

Net current-period other comprehensive income

        10,822     69     97     10,988  
                         
 

Balance March 31, 2013

  $ (16,206 ) $ 3,142   $ 206   $ (3,465 ) $ (16,323 )
                         
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

7.     STOCK-BASED COMPENSATION

  • The following continuities summarize activity with respect to the Company's outstanding employee stock options:

   
  Three Months Ended
March 31, 2013
  Three Months Ended
March 31, 2012
 
   
  Number of Employee Stock Options   Weighted Average
Exercise Price
  Number of Employee Stock Options   Weighted Average
Exercise Price
 
 

Outstanding, beginning of period

    10,587,126     C$56.60     8,959,051     C$62.88  
 

Granted

    2,803,000     52.13     3,228,000     36.96  
 

Exercised

    (212,500 )   37.06          
 

Forfeited

    (156,500 )   61.88     90,000     60.30  
 

Expired

    (1,294,635 )   54.44     449,150     48.09  
                     
 

Outstanding, end of period

    11,726,491     C$56.05     11,647,901     C$56.29  
                     
 

Exercisable, end of period

    7,505,295     C$59.41     7,246,739     C$59.09  
                     
  • Agnico Eagle estimated the fair value of employee stock options under the Black-Scholes option pricing model using the following weighted average assumptions:

   
  Three Months Ended
March 31,
 
   
  2013   2012  
 

Risk-free interest rate

    1.49%     1.23%  
 

Expected life of employee stock options (in years)

    2.7     2.7  
 

Expected volatility of Agnico Eagle's share price

    35.0%     37.5%  
 

Expected dividend yield

    1.73%     2.17%  
AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES

8.     AVAILABLE-FOR-SALE SECURITIES

  • During the three months ended March 31, 2013 and the three months ended March 31, 2012, the Company did not dispose of any available-for-sale securities.

    Available-for-sale securities consist of equity securities whose cost basis is determined using the average cost method. Available-for-sale securities are carried at fair value and comprise the following:

   
  As at
March 31, 2013
  As at
December 31, 2012
 
 

Available-for-sale securities in an unrealized gain position:

             
 

Cost (net of impairments)

  $ 38,387   $ 4,352  
 

Unrealized gains in accumulated other comprehensive loss

    4,753     1,902  
             
 

Estimated fair value

    43,140     6,254  
             
 

Available-for-sale securities in an unrealized loss position:

             
 

Cost (net of impairments)

    13,654     48,047  
 

Unrealized losses in accumulated other comprehensive loss

    (1,485 )   (9,582 )
             
 

Estimated fair value

    12,169     38,465  
             
 

Total estimated fair value of available-for-sale securities

  $ 55,309   $ 44,719  
             
  • The Company's investments in available-for-sale securities consist primarily of investments in common shares of entities in the mining industry. During the three months ended March 31, 2013, certain available-for-sale securities fell into an unrealized loss position. In each case, the Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the impairment. During the first quarter of 2013, the Company recorded an $11.0 million (first quarter of 2012 — nil) impairment loss on certain available-for-sale securities that were determined to be other-than-temporarily impaired.

    At March 31, 2013, the fair value of available-for-sale securities in an unrealized loss position was $12.2 million (December 31, 2012 — $38.5 million) with total unrealized losses in accumulated other comprehensive loss of $1.5 million (December 31, 2012 — $9.6 million). Based on an evaluation of the severity and duration of the impairment of these available-for-sale securities (less than three months) and on the Company's intent to hold the investments for a period of time sufficient for a recovery of fair value, the Company does not consider these available-for-sale securities to be other-than-temporarily impaired as at March 31, 2013.

LONG-TERM DEBT
LONG-TERM DEBT

9.     LONG-TERM DEBT

  • Credit Facility

    On June 22, 2010, the Company amended and restated its Credit Facility, increasing the amount available from $900.0 million to $1,200.0 million.

    On July 20, 2012, the Company further amended the Credit Facility, extending the maturity date from June 22, 2016 to June 22, 2017 and updating pricing terms to reflect improved market conditions.

    At March 31, 2013, the Credit Facility was drawn down by nil (December 31, 2012 — $30.0 million). Amounts drawn down, together with related outstanding letters of credit, resulted in Credit Facility availability of $1,198.9 million at March 31, 2013.

    2012 Notes

    On July 24, 2012, the Company closed a private placement consisting of $200.0 million of guaranteed senior unsecured notes due in 2022 and 2024 (the "2012 Notes") with a weighted average maturity of 11.0 years and weighted average yield of 4.95%.

    The following are the individual series' of the 2012 Notes:

   
  Principal   Interest Rate   Maturity Date  
 

Series A

  $ 100,000     4.87%     7/23/2022  
 

Series B

    100,000     5.02%     7/23/2024  
                     
 

 

  $ 200,000              
                     
  • 2010 Notes

    On April 7, 2010, the Company closed a private placement consisting of $600.0 million of guaranteed senior unsecured notes due in 2017, 2020 and 2022 (the "2010 Notes") with a weighted average maturity of 9.84 years and weighted average yield of 6.59%.

    The following are the individual series' of the issued 2010 Notes:

   
  Principal   Interest Rate   Maturity Date  
 

Series A

  $ 115,000     6.13%     7/4/2017  
 

Series B

    360,000     6.67%     7/4/2020  
 

Series C

    125,000     6.77%     7/4/2022  
                     
 

 

  $ 600,000              
                     
  • Covenants

    Payment and performance of Agnico Eagle's obligations under the Credit Facility, 2012 Notes and 2010 Notes is guaranteed by each of its significant subsidiaries and certain of its other subsidiaries (the "Guarantors").

    The Credit Facility contains covenants that limit, among other things, the ability of the Company to incur additional indebtedness, make distributions in certain circumstances, sell material assets and carry on a business other than one related to the mining business.

    The 2012 Notes and 2010 Notes contain covenants that restrict, among other things, the ability of the Company to amalgamate or otherwise transfer its assets, sell material assets, carry on a business other than one related to mining and the ability of the Guarantors to incur indebtedness.

    The Credit Facility, 2012 Notes and 2010 Notes also require the Company to maintain a total net debt to EBITDA ratio below a specified maximum value as well as a minimum tangible net worth.

    The Company was in compliance with all covenants contained within the Credit Facility, 2012 Notes and 2010 Notes as at March 31, 2013.

    Interest on long-term debt

    For the first quarter of 2013, total interest expense was $13.9 million (first quarter of 2012 — $14.4 million) and total cash interest payments were $6.8 million (first quarter of 2012 — $4.1 million). For the first quarter of 2013, cash interest on the Credit Facility was nil (first quarter of 2012 — $1.7 million), cash standby fees on the Credit Facility were $1.2 million (first quarter of 2012 — $1.0 million), and cash interest on the 2010 Notes and 2012 Notes was $4.9 million (first quarter of 2012 — nil). Total interest costs capitalized to property, plant and mine development for the first quarter of 2013 were $1.1 million (first quarter of 2012 — $0.2 million).

FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS

10.   FINANCIAL INSTRUMENTS

  • Currency Risk Management

    The Company utilizes foreign exchange hedges to reduce the variability in expected future cash flows arising from changes in foreign currency exchange. The hedged items represent a portion of the Canadian dollar denominated cash outflows arising from Canadian dollar denominated expenditures in 2012.

    As at March 31, 2012, forward contracts with a cash flow hedging relationship that did qualify for hedge accounting under ASC 815 — Derivatives and Hedging, hedged $225.0 million of 2012 expenditures. $25.0 million will expire under the contract each month during 2012 at an average rate of US$1.00 = C$1.01. The effective hedges that expired for the three months ended March 31, 2012 resulted in a net realized gain of $0.5 million. As of March 31, 2012, the Company recognized a mark-to-market gain of $2.4 million in Accumulated other comprehensive loss ("AOCL"). Amounts deferred in AOCL are reclassified to the production costs line item on the interim unaudited consolidated statements of income and comprehensive income, as applicable, when the derivative financial instrument has settled. There were no effective forward contracts purchased or outstanding for the three months ended March 31, 2012.

    During the first quarter of 2013, the Company entered into a foreign exchange zero cost collar with a cash flow hedging relationship that did qualify for hedge accounting under ASC 815 — Derivatives and Hedging. The purchase of US dollar put options was financed through selling US dollar call options at a higher level such that the net premium payable to the different counterparties by the Company was nil. The hedged item represents monthly forecast Canadian dollar cash outflows during 2013. At March 31, 2013, the zero cost collars hedged $45.0 million of 2013 expenditures at an average exchange rate of US$1.00 = C$1.03 and the Company recognized a mark-to-market gain of $0.1 million in AOCL. Amounts deferred in AOCL are reclassified to the production costs line item of the consolidated statements of income and comprehensive income, as applicable, when the hedged transaction has occurred. For the contracts that expired during the first quarter of 2013, no realized gains or realized losses were recognized. No effective foreign exchange zero cost collars were purchased or outstanding for the three months ended March 31, 2012.

    Mark-to-market gains (losses) related to foreign exchange derivative financial instruments are based on broker-dealer quotations that utilize period end forward pricing of the currency hedged to calculate fair value.

    The Company's other foreign currency derivative strategies in 2013 and 2012 consisted mainly of writing US dollar call options with short maturities to generate premiums that would, in essence, enhance the spot transaction rate received when exchanging US dollars for Canadian dollars. All of these derivative transactions expired prior to period-end such that no derivatives were outstanding on March 31, 2013 or March 31, 2012. For the three months ended March 31, 2013, the Company's foreign currency derivative financial instruments generated $0.7 million, (three months ended March 31, 2012 — $0.4 million) in call option premiums that were recognized in the gain on derivative financial instruments line item of the interim unaudited consolidated statements of income and comprehensive income.

    Commodity Price Risk Management

    During the three months ended March 31, 2013, the Company recorded intra-quarter zinc derivative financial instruments realized gains of nil (2012 — $0.4 million) that were recognized in the gain on derivative financial instruments line item of the interim unaudited consolidated statements of income and comprehensive income. There were no intra-quarter zinc derivative financial instruments outstanding at March 31, 2013 and no intra-quarter zinc derivative financial instruments were purchased during the three months ended March 31, 2013.

    In the second quarter of 2012, to mitigate the risks associated with fluctuating diesel fuel prices, the Company entered into financial contracts to hedge the price on a portion of diesel fuel costs associated with the Meadowbank mine's diesel fuel exposure as it relates to operating costs. Financial contracts expiring in 2012 and totaling 9.5 million gallons of heating oil were entered into at an average price of $2.97 per gallon, which was approximately 55% of the Meadowbank mine's expected 2012 diesel fuel exposure. In addition, financial contracts expiring in 2013 and totaling 0.5 million gallons of heating oil were entered into at an average price of $2.45 per gallon, which is approximately 3% of the Meadowbank mine's expected 2013 diesel fuel exposure. The contracts expiring in 2013 did qualify for hedge accounting and the related $0.1 million market-to-market gain as at March 31, 2013 was recognized in AOCL. No heating oil financial contracts expired during the first quarter of 2013 and no similar derivative financial instruments existed for the Company in the first quarter of 2012. Amounts deferred in AOCL are reclassified to the production costs line item of the interim unaudited consolidated statements of income and comprehensive income, as applicable, when the derivative financial instrument has settled. Mark-to-market gains (losses) related to heating oil derivative financial instruments are based on broker-dealer quotations that utilize period end forward pricing to calculate fair value.

    The fair value of the Company's derivative financial instruments are reported on the fair value of derivative financial instruments line item of the interim unaudited consolidated balance sheets.

    The following table summarizes the changes in AOCL balances recorded in the interim unaudited consolidated financial statements pertaining to derivative financial instruments:

   
  Three Months Ended
March 31,
 
   
  2013   2012  
 

Accumulated other comprehensive loss, beginning of period

  $ (260 ) $ (4,404 )
 

Other comprehensive gain — foreign exchange derivative financial instruments

    81     7,274  
 

Reclassification to the interim unaudited consolidated statements of income

    10     (510 )
             
 

Accumulated other comprehensive income, end of period

  $ (169 ) $ 2,360  
             
  • The following table summarizes the amounts recognized in the gain on derivative financial instruments line item of the interim unaudited consolidated statements of income:

   
  Three Months Ended
March 31,
 
   
  2013   2012  
 

Premiums realized on written foreign exchange call options

  $ 684   $ 419  
 

Mark-to-market gain on derivative equity contracts

    2,298      
 

Realized gain on zinc derivative financial instruments

        476  
             
 

Gain on derivative financial instruments

  $ 2,982   $ 895  
             
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES

11.   COMMITMENTS AND CONTINGENCIES

  • As part of its ongoing business and operations, the Company has been required to provide assurance in the form of letters of credit for environmental and site restoration costs, custom credits, government grants and other general corporate purposes. As at March 31, 2013, the total amount of these guarantees was $152.6 million.

SEGMENTED INFORMATION
SEGMENTED INFORMATION

12.   SEGMENTED INFORMATION

  • Agnico Eagle operates in a single industry, the exploration for and production of gold. The Company's primary operations are in Canada, Mexico and Finland. The Company identifies its reportable segments as those operations whose operating results are reviewed by the Chief Executive Officer and that represent more than 10% of the combined revenue, profit or loss or total assets of all operating segments. The following are the reportable segments of the Company and reflect how the Company manages its business and how it classifies its operations for planning and measuring performance:

 

Canada:

  LaRonde mine, Lapa mine, Goldex mine, Meadowbank mine, Meliadine project and the Regional office
 

Latin America:

  Pinos Altos mine, Creston Mascota deposit at Pinos Altos and the La India project
 

Europe:

  Kittila mine
 

Exploration:

  United States Exploration office, Europe Exploration office, Canada Exploration offices and the Latin America Exploration office
  • The accounting policies of the reportable segments are the same as those described in the accounting policies note. There are no transactions between the reportable segments affecting revenue. Production costs for the reportable segments are net of intercompany transactions. Of the $229.3 million of goodwill reflected on the interim unaudited consolidated balance sheets at March 31, 2013, $200.1 million relates to the Meliadine project which is a component of the Canada segment and $29.2 million relates to the La India project which is a component of the Latin America segment.

    Corporate head office assets are included in the Canada segment and specific corporate income and expense items are noted separately below.

 
Three Months Ended
March 31, 2013
  Revenues
from
Mining
Operations
  Production
Costs
  Exploration and
Corporate
Development
  Amortization of
Property, Plant
and Mine
Development
  Foreign
Currency
Translation
Gain (Loss)
  Segment
Income
(Loss)
 
 

Canada

  $ 259,688   $ (168,102 ) $   $ (51,516 ) $ 1,352   $ 41,422  
 

Latin America

    88,596     (34,769 )       (9,965 )   (17,344 )   26,518  
 

Europe

    72,138     (27,182 )       (8,590 )   11,120     47,486  
 

Exploration

            (8,571 )       1,214     (7,357 )
                             
 

 

  $ 420,422   $ (230,053 ) $ (8,571 ) $ (70,071 ) $ (3,658 ) $ 108,069  
                             
 

Segment income

  $ 108,069  
 

Corporate and other:

       
 

    Interest and sundry expense

    (212 )
 

    Impairment loss on available-for-sale securities

    (10,995 )
 

    Gain on derivative financial instruments

    2,982  
 

    General and administrative

    (37,320 )
 

    Interest expense

    (13,916 )
                                       
 

Income before income and mining taxes

  $ 48,608  
                                       


 

 
Three Months Ended
March 31, 2012
  Revenues
from
Mining
Operations
  Production
Costs
  Exploration and
Corporate
Development
  Amortization of
Property, Plant
and Mine
Development
  Foreign
Currency
Translation
Loss
  Segment
Income
(Loss)
 
 

Canada

  $ 293,559   $ (153,844 ) $ (11,713 ) $ (47,105 ) $ (8,613 ) $ 72,284  
 

Latin America

    104,296     (35,161 )       (10,053 )   (5,744 )   53,338  
 

Europe

    75,079     (26,030 )       (7,395 )   (1,064 )   40,590  
 

Exploration

            (11,395 )       (96 )   (11,491 )
                             
 

 

  $ 472,934   $ (215,035 ) $ (23,108 ) $ (64,553 ) $ (15,517 ) $ 154,721  
                             
 

Segment income

  $ 154,721  
 

Corporate and other:

                                     
 

    Interest and sundry income

    269  
 

    Gain on derivative financial instruments

    895  
 

    General and administrative

    (33,928 )
 

    Interest expense

    (14,447 )
                                       
 

Income before income and mining taxes

  $ 107,510  
                                       


 

   
  Total Assets as at  
   
  March 31, 2013   December 31, 2012  
 

Canada

  $ 3,234,265   $ 3,280,158  
 

Latin America

    1,113,157     1,069,379  
 

Europe

    839,500     846,941  
 

Exploration

    63,898     59,641  
             
 

 

  $ 5,250,820   $ 5,256,119  
             
RECLAMATION PROVISION
RECLAMATION PROVISION

13.   RECLAMATION PROVISION

  • Agnico Eagle's reclamation provision includes both asset retirement obligations and environmental remediation liabilities. Reclamation provision estimates are based on current legislation, third party estimates, management's estimates and feasibility study calculations.

    Due to the suspension of mining operations at the Goldex mine on October 19, 2011, an environmental remediation liability was recognized. During the three months ended March 31, 2013, the Company incurred $2.5 million in remediation costs that were applied against the environmental remediation liability recognized in 2011. As at March 31, 2013, the remaining Goldex mine environmental remediation liability was $20.1 million, $9.5 million of which was classified as a current liability. The Goldex mine is part of the Canada segment as described in note 12.

ACQUISITIONS
ACQUISITIONS

14.   ACQUISITIONS

  • On November 18, 2011, the Company acquired 94.77% of the outstanding shares of Grayd Resource Corporation ("Grayd"), on a fully-diluted basis, by way of a take-over bid. The November 18, 2011 purchase price of $222.1 million was comprised of $166.0 million in cash and 1,250,477 newly issued Agnico Eagle shares. The acquisition was accounted for as a business combination and goodwill of $29.2 million was recognized on the Company's consolidated balance sheets.

    On January 23, 2012, the Company acquired the remaining outstanding shares of Grayd it did not already own, pursuant to a previously announced compulsory acquisition carried out under the provisions of the Business Corporations Act (British Columbia). The January 23, 2012 purchase price of $11.8 million was comprised of $9.3 million in cash and 68,941 newly issued Agnico Eagle shares valued at $2.4 million. The non-controlling interest as reported on the December 31, 2011 consolidated balance sheets of the Company was eliminated as a result of this transaction.

GENERAL AND ADMINISTRATIVE
GENERAL AND ADMINISTRATIVE

15.   GENERAL AND ADMINISTRATIVE

  • Due to a kitchen fire at the Meadowbank mine in March 2011, the Company recognized a loss on disposal of the kitchen of $6.9 million, incurred related costs of $7.4 million, and recognized an insurance receivable for $11.2 million. The difference of $3.1 million was recognized in the general and administrative line item of the interim unaudited consolidated statements of income and comprehensive income during the three months ended March 31, 2011.

    During the subsequent months of 2011 and 2012, the Company received $4.6 million of insurance proceeds and had a remaining insurance receivable of $6.6 million as at December 31, 2012 within the other current assets line item of the interim unaudited consolidated balance sheets. During the first three months of 2013, the Company received nil of insurance proceeds and had a remaining insurance receivable of $6.6 million as at March 31, 2013.

SUBSEQUENT EVENTS
SUBSEQUENT EVENTS

16.   SUBSEQUENT EVENTS

  • On April 9, 2013, the Company announced that it had entered into a subscription agreement for 26,966,292 units of Sulliden Gold Corporation Ltd. ("Sulliden") at a non-brokered private placement price of C$0.89 per unit for total consideration of C$24.0 million. Each unit is comprised of one common share of Sulliden and 0.7 of one common share purchase warrant, representing 9.96% of the issued and outstanding common shares of Sulliden. Each whole common share purchase warrant entitles the holder to acquire one common share of Sulliden at a price of C$1.31 for a period of two years from the April 12, 2013 closing date.

    On April 23, 2013, the Company announced that it had entered into a subscription agreement for 6,250,000 units of Kootenay Silver Inc. ("Kootenay") at a non-brokered private placement price of C$0.76 per unit for total consideration of C$4.8 million. Each unit is comprised of one common share of Kootenay and one-half of one common share purchase warrant, representing 9.96% of the issued and outstanding common shares of Kootenay. Each whole common share purchase warrant entitles the holder to acquire one common share of Kootenay at a price of C$1.08 for a period of two years from the April 26, 2013 closing date.

    On April 30, 2013, Agnico Eagle announced that the Board approved the payment of a quarterly cash dividend of $0.22 per common share, payable on June 17, 2013 to holders of record of the common shares of the Company on June 3, 2013.

SECURITIES CLASS ACTION LAWSUITS
SECURITIES CLASS ACTION LAWSUITS

17.   SECURITIES CLASS ACTION LAWSUITS

  • On November 7, 2011 and November 22, 2011, the Company and certain current and former officers who also are, or were, directors were named as defendants in two putative class action lawsuits, styled Jerome Stone v. Agnico-Eagle Mines Ltd., et al., and Chris Hastings v. Agnico-Eagle Mines Limited, et al., respectively, which were filed in the United States District Court for the Southern District of New York. On February 6, 2012, the court entered an order consolidating the actions under the caption In re Agnico-Eagle Mines Ltd. Securities Litigation and appointed a lead plaintiff (not one of the plaintiffs who filed the original complaints). On April 6, 2012, the lead plaintiff served its Consolidated Complaint (the "Complaint"). The Complaint names the Company, its current Chief Executive Officer and its former President and Chief Operating Officer as defendants and purports to be brought on behalf of all persons and entities who purchased or otherwise acquired the Company's publicly traded securities in the United States or on a U.S. exchange during the period July 28, 2010 through October 19, 2011 (the "Class Period"). The Complaint alleges, among other things, that defendants violated U.S. securities laws by misrepresenting the Company's gold reserves and the status, ability to operate and projected production of its Goldex mine. The Complaint seeks, among other things, (i) a determination that the action is a proper class action and (ii) an award of unspecified damages, attorneys' fees and expenses. On June 6, 2012, the Company and the other defendants filed a motion, pursuant to the Private Securities Litigation Reform Act and Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the Consolidated Complaint, for failure to state a claim upon which relief could be granted. On January 14, 2013, Judge Oetken granted the Company's motion to dismiss the Complaint and all claims therein and denied the plaintiffs' request for leave to amend the Complaint. On February 12, 2013, the plaintiffs filed a Notice of Appeal to the United States Court of Appeals for the Second Circuit. No date has been set for the appeal.

    On March 8, 2012 and April 10, 2012, a Notice of Action and Statement of Claim (collectively, the "Ontario Claim") were issued by William Leslie, AFA Livforsakringsaktiebolag and certain other entities against the Company and certain of its current and former officers and directors. On September 27, 2012, the plaintiffs issued a Fresh as Amended Statement of Claim. The Fresh as Amended Statement of Claim alleges that the Company's public disclosure concerning water flow issues at its Goldex mine was misleading. The Ontario Claim was issued by the plaintiffs on behalf of all persons and entities who acquired securities of the Company during the period March 26, 2010 to October 19, 2011, excluding persons resident or domiciled in the Province of Quebec at the time they purchased or acquired such securities. The plaintiffs seek, among other things, damages of C$250.0 million and to certify the Ontario Claim as a class action. The plaintiffs brought motions for leave to commence an action under s. 138 of the Securities Act (Ontario) (the "OSA") and to certify the action as a class action. On April 17, 2013, the Court issued Orders granting the plaintiffs leave to commence an action under s. 138 of the OSA and certifying the action as a class action on behalf of persons who acquired securities of the Company over the TSX or certain other Canadian alternative exchanges, or in exchange for shares of Comaplex Minerals Corp. by way of a plan of arrangement completed on or around July 6, 2010, and continued to hold some or all of those securities on one or both of July 28, 2011 and October 19, 2011, except for certain defined excluded persons. The Company intends to vigorously defend the Ontario Claim.

    On April 12, 2012, two senior officers of the Company were served with a Motion for Leave to Institute a Class Action and for the Appointment of a Representative Plaintiff (the "Quebec Motion"). The action is on behalf of all persons and entities residing or domiciled in Quebec who acquired securities of the Company between March 26, 2010 and October 19, 2011. The proposed class action is for damages of C$100.0 million arising as a result of allegedly misleading disclosure by the Company concerning its operations at the Goldex mine. On October 15, 2012, the plaintiffs served an amended Quebec Motion seeking leave to commence an action under the Securities Act (Quebec) in addition to seeking authorization to institute a class action. No date has been set for the hearing to argue the Quebec Motion. The Company intends to vigorously contest the Quebec Motion and defend the claim.

COMPARATIVE FIGURES
COMPARATIVE FIGURES

18.   COMPARATIVE FIGURES

  • Certain figures in the comparative interim unaudited consolidated financial statements have been reclassified from statements previously presented to conform to the presentation of the 2013 interim unaudited consolidated financial statements.

FAIR VALUE MEASUREMENT (Tables)
Financial assets and liabilities measured at fair value within the fair value hierarchy
  • The following table summarizes the Company's financial assets and liabilities measured at fair value as at March 31, 2013 within the fair value hierarchy:

   
  Level 1   Level 2   Level 3   Total  
 

Financial assets:

                         
 

Trade receivables(i)

  $   $ 70,526   $   $ 70,526  
 

Available-for-sale securities(ii)

    55,309             55,309  
 

Fair value of derivative financial instruments(iii)

        5,308         5,308  
                     
 

 

  $ 55,309   $ 75,834   $   $ 131,143  
                     
 

Financial liabilities:

                         
 

Fair value of derivative financial instruments(iii)

  $   $ 700   $   $ 700  
                     
  • The following table details the Company's financial assets and liabilities measured at fair value as at December 31, 2012 within the fair value hierarchy:

   
  Level 1   Level 2   Level 3   Total  
 

Financial assets:

                         
 

Trade receivables(i)

  $   $ 67,750   $   $ 67,750  
 

Available-for-sale securities(ii)

    44,719             44,719  
 

Fair value of derivative financial instruments(iii)

        2,112         2,112  
                     
 

 

  $ 44,719   $ 69,862   $   $ 114,581  
                     
 

Financial liabilities:

                         
 

Fair value of derivative financial instruments(iii)

  $   $ 277   $   $ 277  
                     

  • (i)
    Trade receivables from provisional invoices for concentrate sales are valued using quoted forward rates derived from observable market data based on the month of expected settlement (classified within Level 2 of the fair value hierarchy).

    (ii)
    Available-for-sale securities are recorded at fair value using quoted market prices (classified within Level 1 of the fair value hierarchy).

    (iii)
    Derivative financial instruments are recorded at fair value using external broker-dealer quotations (classified within Level 2 of the fair value hierarchy).
PROPERTY, PLANT AND MINE DEVELOPMENT (Tables)
Schedule of property, plant and mine development

 

   
  As at March 31, 2013   As at December 31, 2012  
   
  Cost   Accumulated
Amortization
  Net Book
Value
  Cost   Accumulated
Amortization
  Net Book
Value
 
 

Mining properties

  $ 1,356,797   $ 106,852   $ 1,249,945   $ 1,356,227   $ 86,839   $ 1,269,388  
 

Plant and equipment

    2,552,940     663,985     1,888,955     2,538,328     617,826     1,920,502  
 

Mine development costs

    956,226     233,988     722,238     918,482     237,967     680,515  
 

Construction in Progress:

                                     
 

Meliadine project

    146,436         146,436     133,840         133,840  
 

La India project

    75,691         75,691     32,553         32,553  
 

Goldex mine M and E zones

    45,872         45,872     30,658         30,658  
                             
 

 

  $ 5,133,962   $ 1,004,825   $ 4,129,137   $ 5,010,088   $ 942,632   $ 4,067,456  
                             
SHAREHOLDERS' EQUITY (Tables)
  •  

 

 

Common shares outstanding at March 31, 2013

    172,376,107  
 

Employee stock options

    11,726,491  
 

Warrants

    8,600,000  
 

RSU plan

    491,417  
         
 

 

    193,194,015  
         
  •  

 

   
  Three Months Ended
March 31,
 
   
  2013   2012  
 

Net income for the period

  $ 23,859   $ 78,548  
             
 

Weighted average number of common shares outstanding — basic (in thousands)

    172,280     170,837  
 

Add: Dilutive impact of employee stock options

         
 

          Dilutive impact of warrants

         
 

          Dilutive impact of shares related to RSU plan

    343     180  
             
 

Weighted average number of common shares outstanding — diluted (in thousands)

    172,623     171,017  
             
 

Net income per share — basic

  $ 0.14   $ 0.46  
             
 

Net income per share — diluted

  $ 0.14   $ 0.46  
             
  •  

 

   
  Cumulative
Translation
Adjustment
  Available-for-sale
Securities
  Derivative
Financial
Instruments
  Pension
Benefits
  Total  
 

Balance December 31, 2012

  $ (16,206 ) $ (7,680 ) $ 137   $ (3,562 ) $ (27,311 )
 

Other comprehensive (loss) income before reclassifications

        (173 )   81         (92 )
 

Tax expense

            (19 )       (19 )
 

Amounts reclassified from accumulated other comprehensive loss

        10,995     10     131     11,136  
 

Tax expense

            (3 )   (34 )   (37 )
                         
 

Net current-period other comprehensive income

        10,822     69     97     10,988  
                         
 

Balance March 31, 2013

  $ (16,206 ) $ 3,142   $ 206   $ (3,465 ) $ (16,323 )
                         
STOCK-BASED COMPENSATION (Tables)
  •  

 

   
  Three Months Ended
March 31, 2013
  Three Months Ended
March 31, 2012
 
   
  Number of Employee Stock Options   Weighted Average
Exercise Price
  Number of Employee Stock Options   Weighted Average
Exercise Price
 
 

Outstanding, beginning of period

    10,587,126     C$56.60     8,959,051     C$62.88  
 

Granted

    2,803,000     52.13     3,228,000     36.96  
 

Exercised

    (212,500 )   37.06          
 

Forfeited

    (156,500 )   61.88     90,000     60.30  
 

Expired

    (1,294,635 )   54.44     449,150     48.09  
                     
 

Outstanding, end of period

    11,726,491     C$56.05     11,647,901     C$56.29  
                     
 

Exercisable, end of period

    7,505,295     C$59.41     7,246,739     C$59.09  
                     
  •  

 

   
  Three Months Ended
March 31,
 
   
  2013   2012  
 

Risk-free interest rate

    1.49%     1.23%  
 

Expected life of employee stock options (in years)

    2.7     2.7  
 

Expected volatility of Agnico Eagle's share price

    35.0%     37.5%  
 

Expected dividend yield

    1.73%     2.17%  
AVAILABLE-FOR-SALE SECURITIES (Tables)
Schedule of available-for-sale securities
  •  

 

   
  As at
March 31, 2013
  As at
December 31, 2012
 
 

Available-for-sale securities in an unrealized gain position:

             
 

Cost (net of impairments)

  $ 38,387   $ 4,352  
 

Unrealized gains in accumulated other comprehensive loss

    4,753     1,902  
             
 

Estimated fair value

    43,140     6,254  
             
 

Available-for-sale securities in an unrealized loss position:

             
 

Cost (net of impairments)

    13,654     48,047  
 

Unrealized losses in accumulated other comprehensive loss

    (1,485 )   (9,582 )
             
 

Estimated fair value

    12,169     38,465  
             
 

Total estimated fair value of available-for-sale securities

  $ 55,309   $ 44,719  
             
LONG-TERM DEBT (Tables)
  •  

 

   
  Principal   Interest Rate   Maturity Date  
 

Series A

  $ 100,000     4.87%     7/23/2022  
 

Series B

    100,000     5.02%     7/23/2024  
                     
 

 

  $ 200,000              
                     
  •  

 

   
  Principal   Interest Rate   Maturity Date  
 

Series A

  $ 115,000     6.13%     7/4/2017  
 

Series B

    360,000     6.67%     7/4/2020  
 

Series C

    125,000     6.77%     7/4/2022  
                     
 

 

  $ 600,000              
                     
FINANCIAL INSTRUMENTS (Tables)
  •  

 

   
  Three Months Ended
March 31,
 
   
  2013   2012  
 

Accumulated other comprehensive loss, beginning of period

  $ (260 ) $ (4,404 )
 

Other comprehensive gain — foreign exchange derivative financial instruments

    81     7,274  
 

Reclassification to the interim unaudited consolidated statements of income

    10     (510 )
             
 

Accumulated other comprehensive income, end of period

  $ (169 ) $ 2,360  
             
  •  

 

   
  Three Months Ended
March 31,
 
   
  2013   2012  
 

Premiums realized on written foreign exchange call options

  $ 684   $ 419  
 

Mark-to-market gain on derivative equity contracts

    2,298      
 

Realized gain on zinc derivative financial instruments

        476  
             
 

Gain on derivative financial instruments

  $ 2,982   $ 895  
             
SEGMENTED INFORMATION (Tables)
  •  

 

 
Three Months Ended
March 31, 2013
  Revenues
from
Mining
Operations
  Production
Costs
  Exploration and
Corporate
Development
  Amortization of
Property, Plant
and Mine
Development
  Foreign
Currency
Translation
Gain (Loss)
  Segment
Income
(Loss)
 
 

Canada

  $ 259,688   $ (168,102 ) $   $ (51,516 ) $ 1,352   $ 41,422  
 

Latin America

    88,596     (34,769 )       (9,965 )   (17,344 )   26,518  
 

Europe

    72,138     (27,182 )       (8,590 )   11,120     47,486  
 

Exploration

            (8,571 )       1,214     (7,357 )
                             
 

 

  $ 420,422   $ (230,053 ) $ (8,571 ) $ (70,071 ) $ (3,658 ) $ 108,069  
                             
 

Segment income

  $ 108,069  
 

Corporate and other:

       
 

    Interest and sundry expense

    (212 )
 

    Impairment loss on available-for-sale securities

    (10,995 )
 

    Gain on derivative financial instruments

    2,982  
 

    General and administrative

    (37,320 )
 

    Interest expense

    (13,916 )
                                       
 

Income before income and mining taxes

  $ 48,608  
                                       


 

 
Three Months Ended
March 31, 2012
  Revenues
from
Mining
Operations
  Production
Costs
  Exploration and
Corporate
Development
  Amortization of
Property, Plant
and Mine
Development
  Foreign
Currency
Translation
Loss
  Segment
Income
(Loss)
 
 

Canada

  $ 293,559   $ (153,844 ) $ (11,713 ) $ (47,105 ) $ (8,613 ) $ 72,284  
 

Latin America

    104,296     (35,161 )       (10,053 )   (5,744 )   53,338  
 

Europe

    75,079     (26,030 )       (7,395 )   (1,064 )   40,590  
 

Exploration

            (11,395 )       (96 )   (11,491 )
                             
 

 

  $ 472,934   $ (215,035 ) $ (23,108 ) $ (64,553 ) $ (15,517 ) $ 154,721  
                             
 

Segment income

  $ 154,721  
 

Corporate and other:

                                     
 

    Interest and sundry income

    269  
 

    Gain on derivative financial instruments

    895  
 

    General and administrative

    (33,928 )
 

    Interest expense

    (14,447 )
                                       
 

Income before income and mining taxes

  $ 107,510  
                                       


 

   
  Total Assets as at  
   
  March 31, 2013   December 31, 2012  
 

Canada

  $ 3,234,265   $ 3,280,158  
 

Latin America

    1,113,157     1,069,379  
 

Europe

    839,500     846,941  
 

Exploration

    63,898     59,641  
             
 

 

  $ 5,250,820   $ 5,256,119  
             
FAIR VALUE MEASUREMENT (Details) (Fair value measured on recurring basis, USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Level 1
 
 
Financial assets:
 
 
Available-for-sale securities
$ 55,309 
$ 44,719 
Total financial assets
55,309 
44,719 
Level 2
 
 
Financial assets:
 
 
Trade receivables
70,526 
67,750 
Fair value of derivative financial instruments
5,308 
2,112 
Total financial assets
75,834 
69,862 
Financial liabilities:
 
 
Fair value of derivative financial instruments
700 
277 
Total
 
 
Financial assets:
 
 
Trade receivables
70,526 
67,750 
Available-for-sale securities
55,309 
44,719 
Fair value of derivative financial instruments
5,308 
2,112 
Total financial assets
131,143 
114,581 
Financial liabilities:
 
 
Fair value of derivative financial instruments
$ 700 
$ 277 
PROPERTY, PLANT AND MINE DEVELOPMENT (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Property, Plant and Mine Development
 
 
Cost
$ 5,133,962 
$ 5,010,088 
Accumulated Amortization
1,004,825 
942,632 
Net Book Value
4,129,137 
4,067,456 
Mining properties
 
 
Property, Plant and Mine Development
 
 
Cost
1,356,797 
1,356,227 
Accumulated Amortization
106,852 
86,839 
Net Book Value
1,249,945 
1,269,388 
Plant and equipment
 
 
Property, Plant and Mine Development
 
 
Cost
2,552,940 
2,538,328 
Accumulated Amortization
663,985 
617,826 
Net Book Value
1,888,955 
1,920,502 
Mine development costs
 
 
Property, Plant and Mine Development
 
 
Cost
956,226 
918,482 
Accumulated Amortization
233,988 
237,967 
Net Book Value
722,238 
680,515 
Meliadine project
 
 
Property, Plant and Mine Development
 
 
Cost
146,436 
133,840 
Net Book Value
146,436 
133,840 
La India project
 
 
Property, Plant and Mine Development
 
 
Cost
75,691 
32,553 
Net Book Value
75,691 
32,553 
Goldex mine M and E zones
 
 
Property, Plant and Mine Development
 
 
Cost
45,872 
30,658 
Net Book Value
$ 45,872 
$ 30,658 
SHAREHOLDERS' EQUITY (Details) (USD $)
3 Months Ended 0 Months Ended 12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Jan. 2, 2012
RSU
Dec. 31, 2009
RSU
Mar. 31, 2013
RSU
Mar. 31, 2012
RSU
Shareholders' equity
 
 
 
 
 
 
Vesting Period
 
 
3 years 
2 years 
 
 
Amount transferred to an employee benefit trust to fund restricted share unit plan
 
 
 
 
$ 19,000,000 
$ 12,000,000 
Common shares outstanding at March 31, 2013
172,376,107 
 
 
 
 
 
Employee stock options (in shares)
11,726,491 
 
 
 
 
 
Warrants (in shares)
8,600,000 
 
 
 
 
 
RSU plan (in shares)
491,417 
 
 
 
 
 
Maximum number of common shares (in shares)
193,194,015 
 
 
 
 
 
Net income per share
 
 
 
 
 
 
Net income for the period
$ 23,859,000 
$ 78,548,000 
 
 
 
 
Weighted average number of common shares outstanding - basic
172,280,000 
170,837,000 
 
 
 
 
Dilutive impact of shares related to RSU plan
343,000 
180,000 
 
 
 
 
Weighted average number of common shares outstanding - diluted
172,623,000 
171,017,000 
 
 
 
 
Net income per share - basic (in dollars per share)
$ 0.14 
$ 0.46 
 
 
 
 
Net income per share - diluted (in dollars per share)
$ 0.14 
$ 0.46 
 
 
 
 
SHAREHOLDERS' EQUITY (Details 2) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2013
Cumulative Translation Adjustment
Dec. 31, 2012
Cumulative Translation Adjustment
Mar. 31, 2013
Available-for-sale Securities
Mar. 31, 2013
Derivative Financial Instruments
Mar. 31, 2013
Pension Benefits
Changes in accumulated other comprehensive loss by component
 
 
 
 
 
 
 
Accumulated other comprehensive income (loss), beginning of period
$ (27,311)
 
$ (16,206)
$ (16,206)
$ (7,680)
$ 137 
$ (3,562)
Other comprehensive (loss) income before reclassifications
(92)
 
 
 
(173)
81 
 
Tax expense
(19)
 
 
 
 
(19)
 
Amounts reclassified from accumulated other comprehensive loss
11,136 
 
 
 
10,995 
10 
131 
Tax expense
(37)
 
 
 
 
(3)
(34)
Net current-period other comprehensive income
10,988 
(9,875)
 
 
10,822 
69 
97 
Accumulated other comprehensive income (loss), end of period
$ (16,323)
 
$ (16,206)
$ (16,206)
$ 3,142 
$ 206 
$ (3,465)
STOCK-BASED COMPENSATION (Details) (CAD $)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Stock options activity
 
 
Options outstanding, end of year (in shares)
11,726,491 
 
Employee Stock Option Plan
 
 
Stock options activity
 
 
Options outstanding, beginning of year (in shares)
10,587,126 
8,959,051 
Granted (in shares)
2,803,000 
3,228,000 
Exercised (in shares)
(212,500)
 
Forfeited (in shares)
(156,500)
(90,000)
Expired (in shares)
(1,294,635)
(449,150)
Options outstanding, end of year (in shares)
11,726,491 
11,647,901 
Options exercisable at end of period (in shares)
7,505,295 
7,246,739 
Weighted Average Exercise Price
 
 
Outstanding, beginning of year, weighted average exercise price (in Canadian dollars per share)
$ 56.60 
$ 62.88 
Granted, weighted average exercise price (in Canadian dollars per share)
$ 52.13 
$ 36.96 
Exercised, weighted average exercise price (in Canadian dollars per share)
$ 37.06 
 
Forfeited, weighted average exercise price (in Canadian dollars per share)
$ 61.88 
$ 60.30 
Expired - weighted-average exercise price (in Canadian dollars per share)
$ 54.44 
$ 48.09 
Outstanding, end of year, weighted average exercise price (in Canadian dollars per share)
$ 56.05 
$ 56.29 
Options exercisable at end of period (in Canadian dollars per share)
$ 59.41 
$ 59.09 
STOCK-BASED COMPENSATION (Details 2) (Employee Stock Option Plan)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Employee Stock Option Plan
 
 
Fair value of options weighted average assumptions:
 
 
Pricing model used for valuation of options
Black-Scholes 
 
Risk-free interest rate (as a percent)
1.49% 
1.23% 
Expected life of employee stock options (in years)
2 years 8 months 12 days 
2 years 8 months 12 days 
Expected volatility of the Company's share price (as a percent)
35.00% 
37.50% 
Expected dividend yield (as a percent)
1.73% 
2.17% 
AVAILABLE-FOR-SALE SECURITIES (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Schedule of Available-for-sale Securities
 
 
 
Estimated fair value
$ 55,309 
 
$ 44,719 
Other than temporary impairment loss on available-for-sale securities
10,995 
 
 
Available-for-sale securities in an unrealized gain position
 
 
 
Schedule of Available-for-sale Securities
 
 
 
Cost (net of impairments)
38,387 
 
4,352 
Unrealized gains (losses) in accumulated other comprehensive loss
4,753 
 
1,902 
Estimated fair value
43,140 
 
6,254 
Available-for-sale securities in an unrealized loss position
 
 
 
Schedule of Available-for-sale Securities
 
 
 
Cost (net of impairments)
13,654 
 
48,047 
Unrealized gains (losses) in accumulated other comprehensive loss
(1,485)
 
(9,582)
Estimated fair value
12,169 
 
38,465 
Other than temporary impairment loss on available-for-sale securities
$ 11,000 
    
 
Maximum duration of impairment for investments in available-for-sale securities
3 months 
 
 
LONG-TERM DEBT (Details) (USD $)
3 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2013
Credit Facilities
Mar. 31, 2012
Credit Facilities
Dec. 31, 2012
Credit Facilities
Jun. 22, 2010
Credit Facilities
Mar. 31, 2013
Guaranteed senior unsecured notes
Mar. 31, 2012
Guaranteed senior unsecured notes
Jul. 24, 2012
2012 Notes
Jul. 24, 2012
Series A maturing in 2022
Jul. 24, 2012
Series B maturing in 2024
Apr. 7, 2010
2010 Notes
Apr. 7, 2010
Series A maturing in 2017
Apr. 7, 2010
Series B maturing in 2020
Apr. 7, 2010
Series C maturing in 2022
Debt instrument
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity of line of credit
 
 
 
 
 
$ 900,000,000 
 
 
 
 
 
 
 
 
 
Amount available under credit facilities after amendment
 
 
 
 
 
1,200,000,000 
 
 
 
 
 
 
 
 
 
Amount drawn down on the credit facility
 
 
   
 
30,000,000 
 
 
 
 
 
 
 
 
 
 
Availability under credit facility
 
 
1,198,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding notes
 
 
 
 
 
 
 
 
200,000,000 
 
 
600,000,000 
 
 
 
Proceeds from private placement of guaranteed senior unsecured notes
 
 
 
 
 
 
 
 
 
100,000,000 
100,000,000 
 
115,000,000 
360,000,000 
125,000,000 
Interest rate (as a percent)
 
 
 
 
 
 
 
 
 
4.87% 
5.02% 
 
6.13% 
6.67% 
6.77% 
Weighted average maturity term on guaranteed senior unsecured notes
 
 
 
 
 
 
 
 
11 years 
 
 
9 years 10 months 2 days 
 
 
 
Guaranteed senior unsecured notes, weighted average yield (as a percent)
 
 
 
 
 
 
 
 
4.95% 
 
 
6.59% 
 
 
 
Interest expense
13,916,000 
14,447,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash interest payments
6,832,000 
4,093,000 
   
1,700,000 
 
 
4,900,000 
   
 
 
 
 
 
 
 
Cash standby fees
 
 
1,200,000 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
Interest expense capitalized to construction property, plant and mine development
$ 1,100,000 
$ 200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL INSTRUMENTS (Details)
3 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 3 Months Ended
Mar. 31, 2013
USD ($)
Mar. 31, 2012
USD ($)
Mar. 31, 2013
Zinc
USD ($)
item
Mar. 31, 2012
Zinc
USD ($)
Mar. 31, 2013
Heating oil
item
Mar. 31, 2012
Heating oil
item
Mar. 31, 2013
Call Options Written
USD ($)
item
Mar. 31, 2012
Call Options Written
USD ($)
item
Mar. 31, 2012
Foreign exchange forward contract
Designated as hedges
2012 expenditures
USD ($)
item
Mar. 31, 2012
Foreign exchange forward contract
Designated as hedges
2012 expenditures
CAD ($)
Jun. 30, 2012
Expected 2012 diesel fuel exposure
Heating oil
gal
Mar. 31, 2013
Expected 2013 diesel fuel exposure
Heating oil
Designated as hedges
USD ($)
Jun. 30, 2012
Expected 2013 diesel fuel exposure
Heating oil
Designated as hedges
gal
Mar. 31, 2013
Foreign exchange derivative
USD ($)
Mar. 31, 2012
Foreign exchange derivative
USD ($)
Mar. 31, 2013
Equity derivative
USD ($)
Mar. 31, 2013
Foreign exchange zero cost collar
Designated as hedges
2013 expenditures
USD ($)
Jun. 30, 2013
Foreign exchange zero cost collar
Designated as hedges
2013 expenditures
item
Mar. 31, 2013
Foreign exchange zero cost collar
Designated as hedges
2013 expenditures
CAD ($)
Mar. 31, 2013
Foreign exchange and other derivative financial instruments
USD ($)
Mar. 31, 2012
Foreign exchange and other derivative financial instruments
USD ($)
Derivative
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of expenditures hedged
 
 
 
 
 
 
 
 
$ 225,000,000 
 
 
 
 
 
 
 
$ 45,000,000 
 
 
 
 
Amount of expenditures hedged, expiring each month
 
 
 
 
 
 
 
 
25,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Exchange rate under foreign exchange forward contract (in CAD per US dollar)
 
 
 
 
 
 
 
 
 
1.01 
 
 
 
 
 
 
 
 
1.03 
 
 
Gain (loss) on derivative financial instruments
2,982,000 
895,000 
 
 
 
 
 
 
500,000 
 
 
 
 
 
 
 
 
 
 
 
Gain recognized in interim consolidated statement of income and comprehensive income
 
 
   
476,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of derivative instruments outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notional amount
 
 
 
 
 
 
 
 
 
 
9,500,000 
 
500,000 
 
 
 
 
 
 
 
 
Average price (in dollars per gallon)
 
 
 
 
 
 
 
 
 
 
2.97 
 
2.45 
 
 
 
 
 
 
 
 
Percentage of Meadowbank's expected exposure
 
 
 
 
 
 
 
 
 
 
55.00% 
 
3.00% 
 
 
 
 
 
 
 
 
Unrealized mark-to-market (gain) loss