AGNICO EAGLE MINES LTD, 6-K filed on 11/12/2010
Report of Foreign Issuer
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands
Sep. 30, 2010
Dec. 31, 2009
Current
 
 
Cash and cash equivalents
$ 141,192 
$ 160,280 
Short-term investments
5,034 
3,313 
Restricted cash
1,890 
 
Trade receivables
83,814 
93,571 
Inventories:
 
 
Ore stockpiles
50,885 
41,286 
Concentrates and dore
45,334 
31,579 
Supplies
134,423 
100,885 
Available-for-sale securities (note 7)
62,960 
111,967 
Other current assets
87,148 
61,159 
Fair value of derivative financial instruments (note 10)
997 
 
Total current assets
613,677 
604,040 
Other assets
71,566 
33,641 
Future income and mining tax assets
29,843 
27,878 
Property, plant and mine development
4,796,886 
3,581,798 
TOTAL ASSETS
5,511,972 
4,247,357 
Current
 
 
Accounts payable and accrued liabilities
197,229 
143,477 
Dividends payable
 
28,199 
Interest payable
19,581 
1,666 
Income taxes payable
4,753 
4,501 
Capital leases
9,487 
11,955 
Fair value of derivative financial instruments (note 10)
1,928 
662 
Total current liabilities
232,978 
190,460 
Long-term debt (note 8)
715,000 
715,000 
Reclamation provision and other liabilities
113,886 
96,255 
Future income and mining tax liabilities (note 9)
835,478 
493,881 
SHAREHOLDERS' EQUITY
 
 
Common shares (note 5)
3,003,536 
2,378,759 
Stock options (note 6)
93,298 
65,771 
Warrants
24,858 
24,858 
Contributed surplus
15,166 
15,166 
Retained earnings
460,311 
216,158 
Accumulated other comprehensive income
17,461 
51,049 
Total shareholders' equity
3,614,630 
2,751,761 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 5,511,972 
$ 4,247,357 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2010
2009
2010
2009
REVENUES
 
 
 
 
Revenues from mining operations
$ 398,478 
$ 149,250 
$ 983,517 
$ 388,165 
COSTS, EXPENSES AND OTHER INCOME
 
 
 
 
Production
196,674 
88,652 
481,474 
199,383 
Exploration and corporate development
19,491 
11,846 
39,950 
28,718 
Amortization of plant and mine development
48,145 
23,200 
122,651 
50,800 
General and administrative
19,925 
14,658 
71,595 
45,823 
Provincial capital tax
(6,934)
1,583 
(6,779)
4,165 
Interest
14,722 
2,648 
34,535 
5,852 
Gain on derivative financial instruments
1,330 
 
(3,826)
 
Interest and sundry income (note 10)
(1,784)
(3,664)
(3,943)
(13,460)
Gain on sale of available-for-sale securities (note 7)
(7,839)
(5,939)
(8,185)
(6,474)
Gain on acquisition of Comaplex (note 13)
(57,526)
 
(57,526)
 
Gain on sale of mining property
(8,888)
 
(8,888)
 
Foreign currency translation loss
17,685 
22,875 
9,159 
32,046 
Income before income, mining and federal capital taxes
163,477 
(6,609)
313,300 
41,312 
Income and mining tax expense (recovery) (note 9)
42,016 
10,357 
69,147 
2,710 
Net income (loss) for the period
121,461 
(16,966)
244,153 
38,602 
Net income (loss) per share - basic (in dollars per share)
0.73 
(0.11)
1.52 
0.25 
Net income (loss) per share - diluted (in dollars per share)
0.71 
(0.11)
1.49 
0.24 
Weighted average number of shares outstanding (in thousands)
 
 
 
 
Basic (in shares)
167,461 
156,164 
160,353 
155,725 
Diluted (in shares)
170,679 
158,907 
163,342 
157,857 
Comprehensive income:
 
 
 
 
Net income (loss) for the period
121,461 
(16,966)
244,153 
38,602 
Other comprehensive income (loss):
 
 
 
 
Unrealized gain on hedging activities
 
6,305 
 
15,563 
Unrealized gain on available-for-sale securities
6,240 
17,658 
39,211 
37,067 
Adjustments for hedging financial instruments maturing during the period
 
(3,986)
 
(2,536)
Adjustments for realized gain on available-for-sale securities due to dispositions and write-downs during the period
(7,840)
(6,474)
(8,186)
(6,474)
Net amount reclassified to income due to acquisition of business (note 13)
(64,508)
 
(64,508)
 
Amortization of unrecognized gain on pension liability
(47)
(337)
(141)
(323)
Tax effect of other comprehensive income (loss) items (note 9)
12 
(628)
36 
(3,523)
Other comprehensive income (loss) for the period
(66,143)
12,538 
(33,588)
39,774 
Comprehensive income (loss) for the period
$ 55,318 
$ (4,428)
$ 210,565 
$ 78,376 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)
In Thousands
Retained earnings
Accumulated other comprehensive income (loss)
Total
Balance at Dec. 31, 2008
157,541 
(20,608)
 
Increase (Decrease) in Shareholders' Equity
 
 
 
Net income for the period
38,602 
 
38,602 
Other comprehensive income for the period
 
39,774 
39,774 
Balance at Sep. 30, 2009
196,143 
19,166 
 
Balance at Jun. 30, 2009
213,109 
6,628 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
Net income for the period
(16,966)
 
(16,966)
Other comprehensive income for the period
 
12,538 
12,538 
Balance at Sep. 30, 2009
196,143 
19,166 
 
Balance at Dec. 31, 2009
216,158 
51,049 
2,751,761 
Increase (Decrease) in Shareholders' Equity
 
 
 
Net income for the period
244,153 
 
244,153 
Other comprehensive income for the period
 
(33,588)
(33,588)
Balance at Sep. 30, 2010
460,311 
17,461 
3,614,630 
Balance at Jun. 30, 2010
338,850 
83,604 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
Net income for the period
121,461 
 
121,461 
Other comprehensive income for the period
 
(66,143)
(66,143)
Balance at Sep. 30, 2010
$ 460,311 
$ 17,461 
$ 3,614,630 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2010
2009
2010
2009
Operating activities
 
 
 
 
Net income for the period
$ 121,461 
$ (16,966)
$ 244,153 
$ 38,602 
Add (deduct) items not affecting cash:
 
 
 
 
Amortization of plant and mine development
48,145 
23,200 
122,651 
50,800 
Future income and mining taxes
33,176 
9,816 
46,702 
1,887 
Gain on sale of available-for-sale securities and derivative financial instruments
(5,407)
(7,804)
(9,582)
(15,130)
Gain on acquisition of Comaplex (note 13)
(57,526)
 
(57,526)
 
Stock-based compensation
9,376 
5,745 
35,711 
23,512 
Foreign currency translation loss
17,685 
22,875 
9,159 
32,046 
Other
3,968 
1,685 
11,040 
1,768 
Changes in non-cash working capital balances
 
 
 
 
Trade receivables
(18,459)
6,504 
9,757 
(26,007)
Income taxes payable
(14,443)
(1,017)
252 
960 
Other taxes recoverable
(12,585)
688 
(22,766)
27,954 
Inventories
(30,303)
(79,994)
(71,912)
(91,999)
Other current assets
7,406 
(16,130)
(3,198)
(21,972)
Interest payable
9,692 
983 
17,915 
1,323 
Accounts payable and accrued liabilities
44,643 
36,628 
60,538 
37,661 
Cash provided by (used in) operating activities
156,829 
(13,787)
392,894 
61,405 
Investing activities
 
 
 
 
Additions to property, plant and mine development
(174,058)
(172,832)
(403,638)
(483,181)
Decrease (increase) in short-term investments
(1,895)
(961)
(1,721)
(5,504)
Net proceeds on sale of available-for-sale securities and other
12,623 
34,684 
14,004 
41,077 
Purchases of available-for-sale securities
(418)
(3,403)
(6,708)
(6,380)
Decrease (increase) in restricted cash
(50)
5,756 
(1,890)
6,080 
Cash used in investing activities
(163,798)
(136,756)
(399,953)
(447,908)
Financing activities
 
 
 
 
Dividends paid
 
 
(26,830)
(27,132)
Repayment of capital lease obligations
(2,664)
(1,231)
(12,776)
(8,113)
Proceeds from long-term debt
70,000 
200,000 
1,271,000 
485,000 
Repayment of long-term debt
(90,000)
 
(1,271,000)
 
Sale-leaseback financing
3,856 
2,640 
6,861 
13,528 
Long-term debt financing costs
(187)
(203)
(12,675)
(4,775)
Proceeds from common shares issued
19,526 
16,384 
33,883 
63,776 
Cash provided by (used in) financing activities
531 
217,590 
(11,537)
522,284 
Effect of exchange rate changes on cash and cash equivalents
(177)
2,875 
(492)
4,446 
Net increase (decrease) in cash and cash equivalents during the period
(6,615)
69,922 
(19,088)
140,227 
Cash and cash equivalents, beginning of period
147,807 
138,687 
160,280 
68,382 
Cash and cash equivalents, end of period
141,192 
208,609 
141,192 
208,609 
Other operating cash flow information:
 
 
 
 
Interest paid during the period
3,534 
6,216 
16,964 
9,725 
Income, mining and capital taxes paid during the period
$ 16,028 
$ 4,884 
$ 17,525 
$ 7,743 
BASIS OF PRESENTATION
BASIS OF PRESENTATION

1.     BASIS OF PRESENTATION

  • The accompanying unaudited interim 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 ("GAAP") in US dollars. They do not include all of the disclosures required by GAAP for annual financial statements. Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the fiscal 2009 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, 2009. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, which consist only of normal and recurring adjustments necessary to present fairly the financial position as at September 30, 2010 and the results of operations and cash flows for the three and nine months ended September 30, 2010 and 2009.

    Operating results for the three months and nine months ended September 30, 2010 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2010.

USE OF ESTIMATES
USE OF ESTIMATES

2.     USE OF ESTIMATES

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

ACCOUNTING POLICIES
ACCOUNTING POLICIES

3.     ACCOUNTING POLICIES

  • These interim consolidated financial statements follow the same accounting policies and methods of their application as the December 31, 2009 audited annual consolidated financial statements except for the changes discussed below.

    Recently Adopted Accounting Pronouncements

    Variable Interest Entities

    In June 2009, the FASB issued an amendment to its guidance for consolidation accounting to require an entity to perform a qualitative analysis to determine whether the enterprise's variable interest gives it a controlling financial interest in a variable interest entity ("VIE"). The updated guidance also requires ongoing reassessments of the primary beneficiary of a VIE. Based on the Company's assessment, these changes do not have an impact on the accounting for our existing VIE (the Company's restricted share unit plan for certain employees).

    Fair Value Accounting

    In January 2010, the FASB guidance for fair value measurements and disclosures was updated to require additional disclosures. The updated guidance was effective for the Company's fiscal year beginning January 1, 2010, with the exception of the level 3 disaggregation which is effective for the Company's fiscal year beginning January 1, 2011. Based on the Company's assessment, these changes do not have an impact on the Company's required disclosures.

FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT

4.     FAIR VALUE MEASUREMENT

  • Accounting Standards Codification ("ASC") 820 — Fair Value Measurement and Disclosure (Prior authoritative literature: FASB Statement No. 157, "Fair Value Measurements") defines fair value, establishes a framework for measuring fair value under GAAP, and requires expanded disclosures about fair value measurements. The three levels of the fair value hierarchy under the Fair Value Measurements and Disclosure Topic of the FASB Accounting Standards Codification are:

    • 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;

      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 sets forth the Company's financial assets and liabilities measured at fair value within the fair value hierarchy.

   
  Total   Level 1   Level 2   Level 3  
 

Financial assets:

                         
 

Cash equivalents and short-term investments(1)

  $ 7,815   $   $ 7,815   $  
 

Available-for-sale securities(2)(3)

    62,960     54,077     8,883      
 

Trade receivables(4)

    83,814         83,814      
 

Derivative assets(3)

    997         997      
                     
 

 

  $ 155,586   $ 54,077   $ 101,509   $  
                     
 

Financial liabilities:

                         
 

Derivative liabilities(3)

  $ 1,928   $   $ 1,928   $  
                     

  • (1)
    Fair value approximates the carrying amounts due to the short-term nature.

    (2)
    Recorded at fair value using quoted market prices.

    (3)
    Recorded at fair value based on broker-dealer quotations.

    (4)
    Trade receivables from provisional invoices for concentrate sales are included within Level 2 as they are valued using quoted forward rates derived from observable market data based on the month of expected settlement.
  • Both the Company's cash equivalents and short-term investments are classified within Level 2 of the fair value hierarchy because they are valued using interest rates observable at commonly quoted intervals. Cash equivalents are market securities with remaining maturities of three months or less at the date of purchase. The short-term investments are market securities with remaining maturities of over three months at the date of purchase.

    The Company's available-for-sale equity securities are recorded at fair value using quoted market prices or broker-dealer quotations. The Company's available-for-sale equity securities that are valued using quoted market prices in active markets are classified as Level 1 of the fair value hierarchy. The Company's available-for-sale securities classified as Level 2 of the fair value hierarchy consist of equity warrants, which are recorded at fair value based broker-dealer quotations.

    In the event that a decline in the fair value of an investment occurs and the decline in value is considered to be other-than-temporary, an impairment charge is recorded in the interim consolidated statement of 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 for which the cost basis exceeds its fair value.

SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY

5.     SHAREHOLDERS' EQUITY

  • During the three months ended March 31, 2009, the Company implemented a restricted share unit plan for certain employees. A deferred compensation balance was recorded for the total grant-date value on the date of the grant. The deferred compensation balance was recorded as a reduction of shareholders' equity and is being amortized as compensation expense (or capitalized to construction in progress) over the applicable vesting period.

    During the three months ended March 31, 2010, the Company funded the plan by transferring $4.0 million (2009 — $3.0 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 were eliminated. The shares purchased and held by the Trust are treated as not being outstanding for the basic earnings per share ("EPS") calculations. They are amortized back into basic EPS over the vesting period. All of the shares held by the Trust were included in the diluted EPS calculations.

    For the three and nine months ended September 30, 2010 and 2009, the Company's warrants were dilutive and were included in the calculation of diluted net income per share.

    The following table presents the maximum number of common shares that would be outstanding if all instruments outstanding at September 30, 2010 were exercised:

 

Common shares outstanding at September 30, 2010

    167,756,805  
 

Employees' stock options

    7,749,122  
 

Warrants

    8,600,000  
         
 

 

    184,105,927  
         
  • During the nine months ended September 30, 2010, 2,911,080 (2009 — 2,276,000) options were granted with an exercise price of C$57.42 (2009 — C$62.65), 673,098 (2009 — 1,128,075) employee stock options were exercised for cash of $26.6 million (2009 — $33.3 million), and 196,800 (2009 — 70,000) options were cancelled with a weighted average exercise price of C$57.84 (2009 — C$56.50).

    During the three months ended September 30, 2010, 116,000 (2009 — 5,000) options were granted with an exercise price of C$66.26 (2009 — C$72.41), 387,725 (2009 — 410,075) employee stock options were exercised for cash of $17.1 million (2009 — $14.4 million), and 143,750 (2009 — nil) options were cancelled with a weighted average exercise price of C$58.63 (2009 — nil).

    The following table illustrates the changes in common shares for the nine months ended September 30, 2010:

   
  Shares   Amount  
 

Common shares, beginning of period

    156,625,174   $ 2,378,759  
 

Shares issued for acquisition of Comaplex Minerals Inc. (note 13)

    10,210,848     578,955  
 

Shares issued under Employee Stock Option Plan

    673,098     34,013  
 

Shares issued under Incentive Share Purchase Plan

    177,560     10,961  
 

Shares issued under Dividend Reinvestment Plan

    25,243     1,408  
 

Shares issued for acquisition of mining property

    15,000     846  
 

Restricted share unit plan

    (17,463 )   (1,406 )
             
 

Common shares, end of period

    167,709,460   $ 3,003,536  
             
  • The following table provides the reconciliation for the weighted average number of common shares in the calculation of basic and diluted income per share:

   
  Three months ended
September 30,
  Nine months ended
September 30,
 
   
  2010   2009   2010   2009  
 

Net income

  $ 121,461   $ (16,966 ) $ 244,153   $ 38,602  
 

Weighted average number of common shares outstanding — basic

    167,461     156,164     160,353     155,725  
   

Add: Dilutive impact of employee stock options

    1,131     965     1,131     965  
     

Dilutive impact of warrants

    2,040     1,740     1,811     1,129  
     

Dilutive impact of treasury shares related to restricted share unit plan

    47     38     47     38  
                     
 

Weighted average number of common shares outstanding — diluted

    170,679     158,907     163,342     157,857  
                     
 

Net income per share basic

  $ 0.73   $ (0.11 ) $ 1.52   $ 0.25  
                     
 

Net income per share diluted

  $ 0.71   $ (0.11 ) $ 1.49   $ 0.24  
                     
  • The calculation of diluted income per share has been computed using the treasury stock method.

STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

6.     STOCK-BASED COMPENSATION

  • The following summary sets out the activity with respect to the Company's outstanding stock options:

   
  Nine months ended
September 30, 2010
 
   
  # of Options   Weighted average
exercise price
(C$)
 
 

Outstanding, beginning of period

    5,707,940   $ 53.85  
 

Granted

    2,911,080   $ 57.42  
 

Exercised

    (673,098 ) $ 41.00  
 

Cancelled

    (196,800 ) $ 57.84  
               
 

Outstanding, end of period

    7,749,122   $ 56.20  
               
 

Options exercisable at end of period

    3,931,237   $ 54.00  
               
  • For the nine months ended September 30, 2010 and 2009, the Company estimated the fair value of options under the Black-Scholes option pricing model using the following weighted average assumptions:

   
  2010   2009  
 

Risk-free interest rate

    1.86%     1.27%  
 

Expected life of options (in years)

    2.5     2.5  
 

Expected volatility of the Company's share price

    43.85%     64.0%  
 

Expected dividend yield

    0.42%     0.42%  
AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES

7.     AVAILABLE-FOR-SALE SECURITIES

  • During the three months ended September 30, 2010, the Company received proceeds of $11.1 million (2009 — $33.6 million) from the sale of certain available-for-sale securities and recognized a gain before taxes of $7.8 million (2009 — $5.9 million).

    During the nine months ended September 30, 2010, the Company received proceeds of $11.6 million (2009 — $34.9 million) from the sale of certain available-for-sale securities and recognized a gain before taxes of $8.2 million (2009 — $6.5 million).

    The cost of an available-for-sale security was determined based on the average cost. Available-for-sale securities are carried at fair value and comprise the following:

   
  As at
September 30, 2010
  As at
December 31, 2009
 
 

Available-for-sale securities in an unrealized gain position

             
 

Cost

  $ 19,075   $ 34,599  
 

Unrealized gains in other comprehensive income

    35,001     67,508  
             
 

Estimated fair value

  $ 54,076   $ 102,107  
             
 

Available-for-sale securities in an unrealized loss position

             
 

Cost

  $ 9,871   $ 9,871  
 

Unrealized losses in other comprehensive income

    (987 )   (11 )
             
 

Estimated fair value

  $ 8,884   $ 9,860  
             
 

Total estimated fair value of available-for-sale securities

  $ 62,960   $ 111,967  
             
LONG-TERM DEBT
LONG-TERM DEBT

8.     LONG-TERM DEBT

  • On April 7, 2010, the Company closed a private placement of an aggregate of $600 million of guaranteed senior unsecured notes due 2017, 2020 and 2022 (the "Notes") with a weighted average maturity of 9.84 years and weighted average yield of 6.59%. Net proceeds from the offering of the Notes were used to repay amounts owed under the Company's credit facilities.

    In addition, on June 22, 2010, the Company amended and restated its credit facilities. The Company's $300 million and $600 million credit facilities were amended to become a single credit facility. The total amount available was increased from $900 million to $1.2 billion and the maturity date was extended to June 22, 2014.

    During the three months ended September 30, 2010, the Company repaid $20 million, net, to the credit facilities (2009 — $200 million). At September 30, 2010, the credit facilities were drawn down by a total of $115.0 million (December 31, 2009 — $715.0 million).

    Total long-term debt interest costs incurred during the three and nine months periods ended September 30, 2010 was $9.7 million (2009 — $6.1 million) and $29.5 million (2009 — $8.9 million) respectively. Total interest costs capitalized to property, plant and mine development for the three and nine months periods ended September 30, 2010 was nil (2009 — $6.1 million) and $4.6 million (2009 — $8.9 million) respectively.

INCOME TAXES
INCOME TAXES

9.     INCOME TAXES

  • On December 31, 2008, the Company executed a Canadian federal tax election to commence using the US dollar as its functional currency for federal Canadian income tax purposes. As the equivalent tax legislation for the Province of Quebec was enacted in the second quarter of 2010, the Company recognized the future tax benefit of $21.8 million relating to income taxes within the Province of Quebec.

    As a result of the accounting for the acquisition of Comaplex, the Company recorded a $274.8 million future tax liability.

FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS

10.   FINANCIAL INSTRUMENTS

  • In the first quarter of 2010, to mitigate the risks associated with fluctuating zinc prices, the Company entered into a zero-cost collar to hedge the price of zinc associated with the LaRonde Mine's 2010 production. The purchase of zinc put options has been financed through selling zinc call options at a higher level such that the net premium payable to the counterparty by the Company is nil.

    A total of 15,000 metric tonnes of zinc call options were written at a strike price of $2,500 per metric tonne with 1,500 metric tonnes expiring each month beginning March 31, 2010. A total of 15,000 metric tonnes of zinc put options were purchased at a strike price of $2,200 per metric tonne with 1,500 metric tonnes expiring each month beginning March 31, 2010. While setting a minimum price, the zero-cost collar strategy also limits participation to zinc prices above $2,500 per metric tonne. These contracts did not qualify for hedge accounting under ASC 815 — Derivatives and Hedging. Gains or losses, along with mark-to-market adjustments are recognized in the gain on derivative financial instruments component of the consolidated statements of income. During the three and nine months ended September 30, 2010, the Company recognized a realized gain of $0.8 million and $2.1 million respectively. As at September 30, 2010, the Company had an unrealized mark-to-market gain of $0.4 million.

    During the three months ended September 30, 2010, the Company wrote covered call options on the warrants of Goldcorp Inc. ("Goldcorp"). The Company sold these call options to reduce its price exposure to the Goldcorp warrants it acquired in connection with Goldcorp's acquisition of Gold Eagle Mines Ltd. As at September 30, 2010, these options were unmatured with a premium of $1.5 million and a Black-Scholes calculated mark-to-market loss of $0.4 million.

    Premiums received on the sale of covered call options are recorded as a liability in the fair value of derivative financial instruments component of the consolidated balance sheets until they mature or the position is closed. The premiums received during the third quarter are expected to be recognized through the interest and sundry income component of the consolidated statements of income in the fourth quarter of 2010. Gains or losses as a result of mark-to-market valuations are taken into income in the period incurred. Cash provided by operating activities in the consolidated statements of cash flows are adjusted for gains realized on the consolidated statements of income through the gain on sale of securities component. Premiums received are a component of proceeds on sale of available-for-sale securities and other within the cash used in investing activities section of the consolidated statements of cash flows.

    There were no metal derivative positions during the three or nine months ended September 30, 2009.

    During the third quarter of 2010, the Company entered into an extendible foreign exchange flat forward transaction. At the end of each month beginning in August 2010 and ending in December 2010, the Company must exchange $5 million for Canadian dollars at a rate of US$1.0 = C$1.1. On December 31, 2010, at the option of the counterparty, the monthly exchange can be extended for another 12 months. During the third quarter, the Company had a realized gain on these transactions of $0.5 million and an unrealized mark-to-market gain of $0.3 million that was recorded through the gain on derivative financial instruments line item within the Consolidated Statements of Income and Comprehensive Income.

COMMITMENTS, CONTINGENCIES, AND GUARANTEES
COMMITMENTS, CONTINGENCIES, AND GUARANTEES

11.   COMMITMENTS, CONTINGENCIES, AND GUARANTEES

  • 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 September 30, 2010, the total amount of these guarantees was $106.7 million.

SEGMENTED INFORMATION
SEGMENTED INFORMATION

12.   SEGMENTED INFORMATION

  • Agnico-Eagle predominantly operates in a single industry, namely exploration for and production of gold. Based on the internal reporting structure and the nature of the Company's activities, the Company identifies its reportable segments as those consolidated mining operations or functional groups that represent more than 10% of the combined revenue, profit or loss or total assets of all reported operating segments. Consolidated mining operations or functional groups not meeting this threshold are aggregated at the applicable geographic region for segment reporting purposes. This structure reflects 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, and the Regional Office
 

Europe:

  Kittila Mine
 

Latin America:

  Pinos Altos Mine
 

Exploration:

  USA Exploration office, Europe Exploration office, Canada Exploration office, and the Latin America Exploration office
  • Specific Corporate Head Office income and expense items are noted separately below.

    On May 1, 2009, both the Lapa Mine and Kittila Mine achieved commercial production. The Pinos Altos Mine achieved commercial production on November 1, 2009. The Meadowbank Mine achieved commercial production March 1, 2010.

 
Three Months Ended
September 30, 2010
  Revenues from
Mining
Operations
  Production
Costs
  Amortization   Exploration &
Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 303,463   $ 144,084   $ 36,731   $   $ 12,186   $ 110,462  
 

Europe

    51,225     24,155     6,241         4,793     16,036  
 

Latin America

    43,790     28,435     5,173         706     9,476  
 

Exploration

                19,491         (19,491 )
                             
 

 

  $ 398,478   $ 196,674   $ 48,145   $ 19,491   $ 17,685   $ 116,483  
                             
 

Segment income

                                $ 116,483  
 

Corporate and Other

                                     
   

Interest and sundry income

                                  1,784  
   

Gain on sale of available-for-sale securities

    7,839  
   

Gain on derivative financial instruments

    (1,330 )
   

Net gain on acquisition of assets

    57,526  
   

Gain on sale of mining property

    8,888  
   

General and administrative

    (19,925 )
   

Provincial capital tax

    6,934  
   

Interest expense

    (14,722 )
                                       
 

Income before income, mining and federal capital taxes

  $ 163,477  
                                       

 
Three Months Ended
September 30, 2009
  Revenues from
Mining
Operations
  Production
Costs
  Amortization   Exploration &
Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 128,379   $ 68,625   $ 17,469   $   $ 19,805   $ 22,480  
 

Europe

    20,871     20,027     5,731         4,860     (9,747 )
 

Latin America

                    (229 )   229  
 

Exploration

                11,846     (1,561 )   (10,285 )
                             
 

 

  $ 149,250   $ 88,652   $ 23,200   $ 11,846   $ 22,875   $ 2,677  
                             
 

Segment income

  $ 2,677  
 

Corporate and Other

                                     
   

Interest and sundry income

                                  3,664  
   

General and administrative

    (14,658 )
   

Gain on sale of available-for-sale securities

    5,939  
   

Provincial capital tax

    (1,583 )
   

Interest expense

    (2,648 )
                                       
 

Income before income, mining and federal capital taxes

  $ (6,609 )
                                       

 
Nine Months Ended
September 30, 2010
  Revenues from
Mining
Operations
  Production
Costs
  Amortization   Exploration &
Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 751,646   $ 355,672   $ 90,180   $   $ 8,509   $ 297,285  
 

Europe

    120,438     65,110     19,531         106     35,691  
 

Latin America

    111,433     60,692     12,940         544     37,257  
 

Exploration

                39,950         (39,950 )
                             
 

 

  $ 983,517   $ 481,474   $ 122,651   $ 39,950   $ 9,159   $ 330,283  
                             
 

Segment income

  $ 330,283  
 

Corporate and Other

                                     
   

Interest and sundry income

                                  3,943  
   

Gain on sale of available-for-sale securities

    8,185  
   

Gain on derivative financial instruments

    3,826  
   

Net gain on acquisition of assets

    57,526  
   

Gain on sale of mining property

    8,888  
   

General and administrative

    (71,595 )
   

Provincial capital tax

    6,779  
   

Interest expense

    (34,535 )
                                       
 

Income before income, mining and federal capital taxes

  $ 313,300  
                                       

 
Nine Months Ended
September 30, 2009
  Revenues from
Mining
Operations
  Production
Costs
  Amortization   Exploration &
Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 360,959   $ 176,166   $ 43,023   $   $ 29,186   $ 112,584  
 

Europe

    27,206     23,217     7,777         5,162     (8,950 )
 

Latin America

                    (263 )   263  
 

Exploration

                28,718     (2,039 )   (26,679 )
                             
 

 

  $ 388,165   $ 199,383   $ 50,800   $ 28,718   $ 32,046   $ 77,218  
                             
 

Segment income

  $ 77,218  
 

Corporate and Other

                                     
   

Interest and sundry income

                                  13,460  
   

Gain on sale of available-for-sale securities

    6,474  
   

General and administrative

    (45,823 )
   

Provincial capital tax

    (4,165 )
   

Interest expense

    (5,852 )
                                       
 

Income before income, mining and federal capital taxes

  $ 41,312  
                                       
ACQUISITION
ACQUISITION

13.   ACQUISITION

  • Comaplex Minerals Corp.

    On April 1st, 2010 Agnico-Eagle and Comaplex Minerals Corp. ("Comaplex") jointly announced that they reached an agreement in principle whereby Agnico-Eagle would acquire all of the shares of Comaplex that it did not already own. Under the terms of the transaction, each shareholder of Comaplex would receive 0.1576 of an Agnico-Eagle share per Comaplex share. Additionally, at closing, each Comaplex shareholder other than Agnico-Eagle and Perfora Investments S.a.r.l. ("Perfora") would receive one common share of a newly formed, wholly-owned, subsidiary of Comaplex ("Geomark") in respect of each Comaplex share.

    Perfora and Agnico-Eagle entered into a support agreement pursuant to which Perfora agreed to, among other things, support the transaction and vote all of the shares it held in Comaplex in favour of the plan of arrangement. Perfora held approximately 17.3% of the outstanding shares (fully diluted) of Comaplex. Agnico-Eagle held approximately 12.3% of the outstanding shares (fully diluted) of Comaplex prior to the announcement of the acquisition.

    On July 6, 2010, the Company and Meliadine Holdings Inc. (formerly Comaplex Minerals Corp.) ("Meliadine") jointly announced the completion of the acquisition of Meliadine by Agnico-Eagle. Agnico-Eagle acquired all of the shares of Meliadine (the "Meliadine Shares") that it did not already own pursuant to a plan of arrangement under the Business Corporations Act (Alberta). Pursuant to the terms of the arrangement, Agnico-Eagle issued a total of 10,210,848 million shares to the shareholders of Meliadine other than Agnico-Eagle for a total value of $579.0 million. The related transaction costs associated with the acquisition totalling $7.0 million were expensed through the Consolidated Statements of Income during the third quarter of 2010. The Company has accounted for the purchase of Meliadine as a business combination.

    Additionally, each Meliadine shareholder other than Agnico-Eagle and Perfora Investments S.a.r.l. ("Perfora") received one common share of Geomark Exploration Ltd. ("Geomark") for each Meliadine Share held prior to the acquisition of Meliadine by Agnico-Eagle. Pursuant to the arrangement, Meliadine transferred to Geomark all assets and related liabilities other than those relating to the Meliadine gold exploration properties and related assets in Nunavut, Canada. The Geomark assets include all of Meliadine's net working capital, the non-Meliadine mineral properties, all oil and gas properties and investments.

    The following table sets forth a preliminary allocation of the purchase price to assets and liabilities acquired, based on management's preliminary estimates of fair value. Final valuations of are not yet complete due to the inherent complexity associated with the valuations. This is a preliminary purchase price allocation and therefore subject to adjustment on completion of the valuation process and analysis of resulting tax effects.

 

Total Purchase Price:

       
 

Comaplex shares previously purchased

  $ 88,683  
 

Agnico-Eagle shares issued for acquisition

    578,955  
         
 

Total purchase price to allocate

    667,638  
         
 

Fair Value of Assets Acquired:

       
 

Property

  $ 939,517  
 

Supplies

    542  
 

Equipment

    2,381  
 

Deferred tax liability

    (274,802 )
         
 

Net assets acquired

    667,638  
         
  • The Comaplex shares purchased prior to the announcement of the 100% acquisition had a cost of $24.1 million and a fair value at July 6, 2010 of $88.6 million. Upon the acquisition of Comaplex, the non-cash gain of $64.5 million on those shares within accumulated comprehensive income was reversed into the Consolidated Statements of Income as a gain during the third quarter of 2010.

ACCOUNTING POLICIES (Policies)

Variable Interest Entities

In June 2009, the FASB issued an amendment to its guidance for consolidation accounting to require an entity to perform a qualitative analysis to determine whether the enterprise's variable interest gives it a controlling financial interest in a variable interest entity ("VIE"). The updated guidance also requires ongoing reassessments of the primary beneficiary of a VIE. Based on the Company's assessment, these changes do not have an impact on the accounting for our existing VIE (the Company's restricted share unit plan for certain employees).

Fair Value Accounting

In January 2010, the FASB guidance for fair value measurements and disclosures was updated to require additional disclosures. The updated guidance was effective for the Company's fiscal year beginning January 1, 2010, with the exception of the level 3 disaggregation which is effective for the Company's fiscal year beginning January 1, 2011. Based on the Company's assessment, these changes do not have an impact on the Company's required disclosures.

FAIR VALUE MEASUREMENT (Tables)
Schedule of assets and liabilities that are measured at fair value on a recurring basis
   
  Total   Level 1   Level 2   Level 3  
 

Financial assets:

                         
 

Cash equivalents and short-term investments(1)

  $ 7,815   $   $ 7,815   $  
 

Available-for-sale securities(2)(3)

    62,960     54,077     8,883      
 

Trade receivables(4)

    83,814         83,814      
 

Derivative assets(3)

    997         997      
                     
 

 

  $ 155,586   $ 54,077   $ 101,509   $  
                     
 

Financial liabilities:

                         
 

Derivative liabilities(3)

  $ 1,928   $   $ 1,928   $  
                     

  • (1)
    Fair value approximates the carrying amounts due to the short-term nature.

    (2)
    Recorded at fair value using quoted market prices.

    (3)
    Recorded at fair value based on broker-dealer quotations.

    (4)
    Trade receivables from provisional invoices for concentrate sales are included within Level 2 as they are valued using quoted forward rates derived from observable market data based on the month of expected settlement.
SHAREHOLDERS' EQUITY (Tables)
  •  

 

Common shares outstanding at September 30, 2010

    167,756,805  
 

Employees' stock options

    7,749,122  
 

Warrants

    8,600,000  
         
 

 

    184,105,927  
         
  • The following table illustrates the changes in common shares for the nine months ended September 30, 2010:

   
  Shares   Amount  
 

Common shares, beginning of period

    156,625,174   $ 2,378,759  
 

Shares issued for acquisition of Comaplex Minerals Inc. (note 13)

    10,210,848     578,955  
 

Shares issued under Employee Stock Option Plan

    673,098     34,013  
 

Shares issued under Incentive Share Purchase Plan

    177,560     10,961  
 

Shares issued under Dividend Reinvestment Plan

    25,243     1,408  
 

Shares issued for acquisition of mining property

    15,000     846  
 

Restricted share unit plan

    (17,463 )   (1,406 )
             
 

Common shares, end of period

    167,709,460   $ 3,003,536  
             
   
  Three months ended
September 30,
  Nine months ended
September 30,
 
   
  2010   2009   2010   2009  
 

Net income

  $ 121,461   $ (16,966 ) $ 244,153   $ 38,602  
 

Weighted average number of common shares outstanding — basic

    167,461     156,164     160,353     155,725  
   

Add: Dilutive impact of employee stock options

    1,131     965     1,131     965  
     

Dilutive impact of warrants

    2,040     1,740     1,811     1,129  
     

Dilutive impact of treasury shares related to restricted share unit plan

    47     38     47     38  
                     
 

Weighted average number of common shares outstanding — diluted

    170,679     158,907     163,342     157,857  
                     
 

Net income per share basic

  $ 0.73   $ (0.11 ) $ 1.52   $ 0.25  
                     
 

Net income per share diluted

  $ 0.71   $ (0.11 ) $ 1.49   $ 0.24  
                     
STOCK-BASED COMPENSATION (Tables)
  •  

   
  Nine months ended
September 30, 2010
 
   
  # of Options   Weighted average
exercise price
(C$)
 
 

Outstanding, beginning of period

    5,707,940   $ 53.85  
 

Granted

    2,911,080   $ 57.42  
 

Exercised

    (673,098 ) $ 41.00  
 

Cancelled

    (196,800 ) $ 57.84  
               
 

Outstanding, end of period

    7,749,122   $ 56.20  
               
 

Options exercisable at end of period

    3,931,237   $ 54.00  
               
  •  

   
  2010   2009  
 

Risk-free interest rate

    1.86%     1.27%  
 

Expected life of options (in years)

    2.5     2.5  
 

Expected volatility of the Company's share price

    43.85%     64.0%  
 

Expected dividend yield

    0.42%     0.42%  
AVAILABLE-FOR-SALE SECURITIES (Tables)
Available-for-sale securities rollforward from cost to fair value
   
  As at
September 30, 2010
  As at
December 31, 2009
 
 

Available-for-sale securities in an unrealized gain position

             
 

Cost

  $ 19,075   $ 34,599  
 

Unrealized gains in other comprehensive income

    35,001     67,508  
             
 

Estimated fair value

  $ 54,076   $ 102,107  
             
 

Available-for-sale securities in an unrealized loss position

             
 

Cost

  $ 9,871   $ 9,871  
 

Unrealized losses in other comprehensive income

    (987 )   (11 )
             
 

Estimated fair value

  $ 8,884   $ 9,860  
             
 

Total estimated fair value of available-for-sale securities

  $ 62,960   $ 111,967  
             
SEGMENTED INFORMATION (Tables)
Segment reporting information
  •  

 
Three Months Ended
September 30, 2010
  Revenues from
Mining
Operations
  Production
Costs
  Amortization   Exploration &
Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 303,463   $ 144,084   $ 36,731   $   $ 12,186   $ 110,462  
 

Europe

    51,225     24,155     6,241         4,793     16,036  
 

Latin America

    43,790     28,435     5,173         706     9,476  
 

Exploration

                19,491         (19,491 )
                             
 

 

  $ 398,478   $ 196,674   $ 48,145   $ 19,491   $ 17,685   $ 116,483  
                             
 

Segment income

                                $ 116,483  
 

Corporate and Other

                                     
   

Interest and sundry income

                                  1,784  
   

Gain on sale of available-for-sale securities

    7,839  
   

Gain on derivative financial instruments

    (1,330 )
   

Net gain on acquisition of assets

    57,526  
   

Gain on sale of mining property

    8,888  
   

General and administrative

    (19,925 )
   

Provincial capital tax

    6,934  
   

Interest expense

    (14,722 )
                                       
 

Income before income, mining and federal capital taxes

  $ 163,477  
                                       

 
Three Months Ended
September 30, 2009
  Revenues from
Mining
Operations
  Production
Costs
  Amortization   Exploration &
Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 128,379   $ 68,625   $ 17,469   $   $ 19,805   $ 22,480  
 

Europe

    20,871     20,027     5,731         4,860     (9,747 )
 

Latin America

                    (229 )   229  
 

Exploration

                11,846     (1,561 )   (10,285 )
                             
 

 

  $ 149,250   $ 88,652   $ 23,200   $ 11,846   $ 22,875   $ 2,677  
                             
 

Segment income

  $ 2,677  
 

Corporate and Other

                                     
   

Interest and sundry income

                                  3,664  
   

General and administrative

    (14,658 )
   

Gain on sale of available-for-sale securities

    5,939  
   

Provincial capital tax

    (1,583 )
   

Interest expense

    (2,648 )
                                       
 

Income before income, mining and federal capital taxes

  $ (6,609 )
                                       

 
Nine Months Ended
September 30, 2010
  Revenues from
Mining
Operations
  Production
Costs
  Amortization   Exploration &
Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 751,646   $ 355,672   $ 90,180   $   $ 8,509   $ 297,285  
 

Europe

    120,438     65,110     19,531         106     35,691  
 

Latin America

    111,433     60,692     12,940         544     37,257  
 

Exploration

                39,950         (39,950 )
                             
 

 

  $ 983,517   $ 481,474   $ 122,651   $ 39,950   $ 9,159   $ 330,283  
                             
 

Segment income

  $ 330,283  
 

Corporate and Other

                                     
   

Interest and sundry income

                                  3,943  
   

Gain on sale of available-for-sale securities

    8,185  
   

Gain on derivative financial instruments

    3,826  
   

Net gain on acquisition of assets

    57,526  
   

Gain on sale of mining property

    8,888  
   

General and administrative

    (71,595 )
   

Provincial capital tax

    6,779  
   

Interest expense

    (34,535 )
                                       
 

Income before income, mining and federal capital taxes

  $ 313,300  
                                       

 
Nine Months Ended
September 30, 2009
  Revenues from
Mining
Operations
  Production
Costs
  Amortization   Exploration &
Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 360,959   $ 176,166   $ 43,023   $   $ 29,186   $ 112,584  
 

Europe

    27,206     23,217     7,777         5,162     (8,950 )
 

Latin America

                    (263 )   263  
 

Exploration

                28,718     (2,039 )   (26,679 )
                             
 

 

  $ 388,165   $ 199,383   $ 50,800   $ 28,718   $ 32,046   $ 77,218  
                             
 

Segment income

  $ 77,218  
 

Corporate and Other

                                     
   

Interest and sundry income

                                  13,460  
   

Gain on sale of available-for-sale securities

    6,474  
   

General and administrative

    (45,823 )
   

Provincial capital tax

    (4,165 )
   

Interest expense

    (5,852 )
                                       
 

Income before income, mining and federal capital taxes

  $ 41,312  
                                       
ACQUISITION (Tables)
Allocation of the purchase price to the fair values of assets acquired

 

Total Purchase Price:

       
 

Comaplex shares previously purchased

  $ 88,683  
 

Agnico-Eagle shares issued for acquisition

    578,955  
         
 

Total purchase price to allocate

    667,638  
         
 

Fair Value of Assets Acquired:

       
 

Property

  $ 939,517  
 

Supplies

    542  
 

Equipment

    2,381  
 

Deferred tax liability

    (274,802 )
         
 

Net assets acquired

    667,638  
         
FAIR VALUE MEASUREMENT (Details) (USD $)
In Thousands
Sep. 30, 2010
Financial assets:
 
Available-for-sale securities
$ 62,960 
Total
 
Financial assets:
 
Cash equivalents and short-term investments
7,815 
Available-for-sale securities
62,960 
Trade receivables
83,814 
Derivative assets
997 
Total financial assets
155,586 
Financial liabilities:
 
Derivative liabilities
1,928 
Level 1
 
Financial assets:
 
Available-for-sale securities
54,077 
Total financial assets
54,077 
Level 2
 
Financial assets:
 
Cash equivalents and short-term investments
7,815 
Available-for-sale securities
8,883 
Trade receivables
83,814 
Derivative assets
997 
Total financial assets
101,509 
Financial liabilities:
 
Derivative liabilities
$ 1,928 
SHAREHOLDERS' EQUITY (Details)
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2010
2010
2009
2009
2010
2010
2009
2009
Mar. 31, 2010
Mar. 31, 2009
SHAREHOLDERS' EQUITY.
 
 
 
 
 
 
 
 
 
 
Amount transferred to an employee benefit trust to fund restricted share unit plan
 
 
 
 
 
 
 
 
4,000,000 
3,000,000 
Common shares outstanding at September 30, 2010 (in shares)
 
167,756,805 
 
 
 
167,756,805 
 
 
 
 
Employees' stock options (in shares)
 
7,749,122 
 
 
 
7,749,122 
 
 
 
 
Warrants (in shares)
 
8,600,000 
 
 
 
8,600,000 
 
 
 
 
Maximum number of shares common shares (in shares)
 
184,105,927 
 
 
 
184,105,927 
 
 
 
 
Stock options granted (in shares)
 
116,000 
 
5,000 
 
2,911,080 
 
2,276,000 
 
 
Stock options granted - exercise price (in Canadian dollars per share)
66.26 
 
72.41 
 
57.42 
 
62.65 
 
 
 
Cash received from exercise of stock options
 
17,100,000 
 
14,400,000 
 
26,600,000 
 
33,300,000 
 
 
Stock options cancelled (in shares)
 
143,750 
 
 
 
196,800 
 
70,000 
 
 
Stock options cancelled - weighted-average exercise price (in Canadian dollars per share)
58.63 
 
 
 
57.84 
 
56.50 
 
 
 
Common Stock Shares Outstanding
 
 
 
 
 
 
 
 
 
 
Common shares, beginning of period, amount (in U.S. dollars)
 
 
 
 
 
2,378,759,000 
 
 
 
 
Common shares, beginning of period (in shares)
 
 
 
 
 
156,625,174 
 
 
 
 
Shares issued for acquisition of Comaplex Minerals Inc. (note 13), amount (in U.S. dollars)
 
 
 
 
 
578,955,000 
 
 
 
 
Shares issued for acquisition of Comaplex Minerals Inc. (in shares)
 
 
 
 
 
10,210,848 
 
 
 
 
Shares issued under Employee Stock Option Plan, amount (in U.S. dollars)
 
 
 
 
 
34,013,000 
 
 
 
 
Shares issued under Employee Stock Option Plan (in shares)
 
387,725 
 
410,075 
 
673,098 
 
1,128,075 
 
 
Shares issued under Incentive Share Purchase Plan, amount (in U.S. dollars)
 
 
 
 
 
10,961,000 
 
 
 
 
Shares issued under Incentive Share Purchase Plan (in shares)
 
 
 
 
 
177,560 
 
 
 
 
Shares issued under Dividend Reinvestment Plan, amount (in U.S. dollars)
 
 
 
 
 
1,408,000 
 
 
 
 
Shares issued under Dividend Reinvestment Plan (in shares)
 
 
 
 
 
25,243 
 
 
 
 
Shares issued for acquisition of mining property, amount (in U.S. dollars)
 
 
 
 
 
846,000 
 
 
 
 
Shares issued for acquisition of mining property (in shares)
 
 
 
 
 
15,000 
 
 
 
 
Restricted share unit plan, amount (in U.S. dollars)
 
(1,406,000)
 
 
 
(1,406,000)
 
 
 
 
Restricted share unit plan (in shares)
 
(17,463)
 
 
 
(17,463)
 
 
 
 
Common shares, end of period, amount (in U.S. dollars)
 
3,003,536,000 
 
 
 
3,003,536,000 
 
 
 
 
Common shares, end of period (in shares)
 
167,709,460 
 
 
 
167,709,460 
 
 
 
 
Earnings Per Share, Diluted:
 
 
 
 
 
 
 
 
 
 
Net income
 
121,461,000 
 
(16,966,000)
 
244,153,000 
 
38,602,000 
 
 
Weighted Average number of common shares outstanding - basic (in shares)
 
167,461,000 
 
156,164,000 
 
160,353,000 
 
155,725,000 
 
 
Add : Dilutive impact of employee stock options (in shares)
 
1,131,000 
 
965,000 
 
1,131,000 
 
965,000 
 
 
Dilutive impact of warrants (in shares)
 
2,040,000 
 
1,740,000 
 
1,811,000 
 
1,129,000 
 
 
Dilutive impact of treasury shares related to restricted shares unit plan (in shares)
 
47,000 
 
38,000 
 
47,000 
 
38,000 
 
 
Weighted Average number of common shares outstanding - Diluted (in shares)
 
170,679,000 
 
158,907,000 
 
163,342,000 
 
157,857,000 
 
 
Net income (loss) per share - basic (in dollars per share)
 
0.73 
 
(0.11)
 
1.52 
 
0.25 
 
 
Net income (loss) per share - diluted (in dollars per share)
 
0.71 
 
(0.11)
 
1.49 
 
0.24 
 
 
STOCK-BASED COMPENSATION (Details)( Stock options)
9 Months Ended
Sep. 30,
2010
2009
Number of Options
 
 
Outstanding, beginning of period (in shares)
5,707,940 
 
Granted (in shares)
2,911,080 
 
Exercised (in shares)
(673,098)
 
Cancelled (in shares)
(196,800)
 
Outstanding, end of period (in shares)
7,749,122 
 
Options exercisable at end of period (In shares)
3,931,237 
 
Weighted average exercise price
 
 
Outstanding, beginning of period (in Canadian dollars per share)
53.85 
 
Granted (in Canadian dollars per share)
57.42 
 
Exercised (in Canadian dollars per share)
41 
 
Cancelled (in Canadian dollars per share)
57.84 
 
Outstanding, end of period (in Canadian dollars per share)
56.20 
 
Options exercisable at end of period (in Canadian dollars per share)
54 
 
Fair value of options weighted average assumptions:
 
 
Pricing model used for valuation of options
Black-Scholes 
Black-Scholes 
Risk-free interest rate (percent in hundredths)
0.0186 
0.0127 
Expected life of options (in years)
2.5 
2.5 
Expected volatility of the Company's share price (percent in hundredths)
0.4385 
0.64 
Expected dividend yield (percent in hundredths)
0.0042 
0.0042 
AVAILABLE-FOR-SALE SECURITIES (Details)
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2010
2009
2010
2009
Dec. 31, 2009
Schedule of Available-for-sale Securities
 
 
 
 
 
Proceeds from sale of available-for-sale securities
11,100,000 
33,600,000 
11,600,000 
34,900,000 
 
Gain on sale of available-for-sale securities
7,839,000 
5,939,000 
8,185,000 
6,474,000 
 
Cost
 
 
 
 
 
Unrealized gains (losses) in other comprehensive income
 
 
 
 
 
Estimated fair value
62,960,000 
 
62,960,000 
 
111,967,000 
Available-for-Sale Securities Unrealized Gain Position
 
 
 
 
 
Schedule of Available-for-sale Securities
 
 
 
 
 
Cost
19,075,000 
 
 
 
34,599,000 
Unrealized gains (losses) in other comprehensive income
35,001,000 
 
 
 
67,508,000 
Estimated fair value
54,076,000 
 
 
 
102,107,000 
Available-for-Sale Securities Unrealized Loss Position
 
 
 
 
 
Schedule of Available-for-sale Securities
 
 
 
 
 
Cost
9,871,000 
 
 
 
9,871,000 
Unrealized gains (losses) in other comprehensive income
(987,000)
 
 
 
(11,000)
Estimated fair value
8,884,000 
 
 
 
9,860,000 
LONG-TERM DEBT (Details)
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
Apr. 30, 2010
2010
2009
2010
2009
Jun. 22, 2010
Apr. 07, 2010
Dec. 31, 2009
LONG-TERM DEBT
 
 
 
 
 
 
 
 
Proceeds from private placement of guaranteed senior unsecured notes
600,000,000 
 
 
 
 
 
 
 
Weighted average maturity term on guaranteed senior unsecured notes (in years)
 
 
 
 
 
 
9.84 
 
Guaranteed senior unsecured notes, weighted average yield (percent in hundredths)
0.0659 
 
 
 
 
 
 
 
Maximum borrowing capacity on one credit facility prior to amendment
 
 
 
 
 
300,000,000 
 
 
Maximum borrowing capacity on second credit facility prior to amendment
 
 
 
 
 
600,000,000 
 
 
Total amount available under credit facilities prior to amendment
 
 
 
 
 
900,000,000 
 
 
Total amount available under credit facilities after amendment
 
 
 
 
 
1,200,000,000 
 
 
Repayment of credit facility
 
20,000,000 
200,000,000 
 
 
 
 
 
Credit facility drawn down
 
115,000,000 
 
115,000,000 
 
 
 
715,000,000 
Long-term debt interest costs
 
9,700,000 
6,100,000 
29,500,000 
8,900,000 
 
 
 
Interest costs capitalized for property, plant and mine development
 
 
6,100,000 
4,600,000 
8,900,000 
 
 
 
INCOME TAXES (Details)
In Millions
3 Months Ended
Jun. 30, 2010
Sep. 30, 2010
INCOME TAXES
 
 
Cumulative deferred tax benefit resulting from use of US dollar as functional currency
22 
 
Business acquisition, future tax liability
 
275 
FINANCIAL INSTRUMENTS (Details)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30,
3 Months Ended
Sep. 30, 2010
2010
2010
2010
3 Months Ended
Sep. 30, 2010
Sep. 30, 2010
Investment Holdings
 
 
 
 
 
 
Zinc options (in Metric Tonnes)
 
 
15,000 
15,000 
 
 
Strike Price for Option (Per Metric Tonne)
 
 
2,500 
2,200 
 
 
Options expiring monthly beginning March 31, 2010 (in metric tonnes)
 
 
1,500 
1,500 
 
 
Maximum limit for participation to Zinc Prices set by zero-cost collar strategy (Per Metric Tonne)
2,500 
2,500 
 
 
 
 
Realized Gain recognized in Consolidated Statement of Income
 
 
 
Unrealized mark-to-market gain on derivatives
 
 
 
Premium received on unmatured derivative instruments
 
 
 
 
Unrealized mark-to-market loss on derivatives
 
 
 
 
Amount of foreign exchange flat forward transaction
 
 
 
 
 
Exchange rate
 
 
 
 
1.1 
COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Details) (USD $)
In Millions
Sep. 30, 2010
COMMITMENTS, CONTINGENCIES, AND GUARANTEES
 
Guarantees provided in the form of letters of credit
$ 107 
SEGMENTED INFORMATION (Details) (USD $)
In Thousands
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2010
2009
2010
2009
SEGMENTED INFORMATION
 
 
 
 
Minimum required percentage of combined revenue, profit or loss or total assets of reported operating segments (percent in hundredths)
0.10 
 
0.10 
 
Segment reporting Information
 
 
 
 
Revenues from mining operations
$ 398,478 
$ 149,250 
$ 983,517 
$ 388,165 
Production Costs
196,674 
88,652 
481,474 
199,383 
Amortization
48,145 
23,200 
122,651 
50,800 
Exploration and corporate development
19,491 
11,846 
39,950 
28,718 
Foreign currency translation loss
17,685 
22,875 
9,159 
32,046 
Segment Income (Loss)
116,483 
2,677 
330,283 
77,218 
Interest and sundry income
1,784 
3,664 
3,943 
13,460 
Gain on sale of available-for-sale securities
7,839 
5,939 
8,185 
6,474 
Gain on derivative financial instruments
(1,330)
 
3,826 
 
Net gain on acquisition of assets
57,526 
 
57,526 
 
Gain on sale of mining property
8,888 
 
8,888 
 
General and administrative
(19,925)
(14,658)
(71,595)
(45,823)
Provincial capital tax
6,934 
(1,583)
6,779 
(4,165)
Interest expense
(14,722)
(2,648)
(34,535)
(5,852)
Income before income, mining and federal capital taxes
163,477 
(6,609)
313,300 
41,312 
Canada
 
 
 
 
Segment reporting Information
 
 
 
 
Revenues from mining operations
303,463 
128,379 
751,646 
360,959 
Production Costs
144,084 
68,625 
355,672 
176,166 
Amortization
36,731 
17,469 
90,180 
43,023 
Foreign currency translation loss
12,186 
19,805 
8,509 
29,186 
Segment Income (Loss)
110,462 
22,480 
297,285 
112,584 
Europe
 
 
 
 
Segment reporting Information
 
 
 
 
Revenues from mining operations
51,225 
20,871 
120,438 
27,206 
Production Costs
24,155 
20,027 
65,110 
23,217 
Amortization
6,241 
5,731 
19,531 
7,777 
Foreign currency translation loss
4,793 
4,860 
106 
5,162 
Segment Income (Loss)
16,036 
(9,747)
35,691 
(8,950)
Latin America
 
 
 
 
Segment reporting Information
 
 
 
 
Revenues from mining operations
43,790 
 
111,433 
 
Production Costs
28,435 
 
60,692 
 
Amortization
5,173 
 
12,940 
 
Foreign currency translation loss
706 
(229)
544 
(263)
Segment Income (Loss)
9,476 
229 
37,257 
263 
Exploration
 
 
 
 
Segment reporting Information
 
 
 
 
Exploration and corporate development
19,491 
11,846 
39,950 
28,718 
Foreign currency translation loss
 
(1,561)
 
(2,039)
Segment Income (Loss)
(19,491)
(10,285)
(39,950)
(26,679)
Corporate and Other
 
 
 
 
Segment reporting Information
 
 
 
 
Interest and sundry income
1,784 
3,664 
3,943 
13,460 
Gain on sale of available-for-sale securities
7,839 
5,939 
8,185 
6,474 
Gain on derivative financial instruments
(1,330)
 
3,826 
 
Net gain on acquisition of assets
57,526 
 
57,526 
 
Gain on sale of mining property
8,888 
 
8,888 
 
General and administrative
(19,925)
(14,658)
(71,595)
(45,823)
Provincial capital tax
6,934 
(1,583)
6,779 
(4,165)
Interest expense
$ (14,722)
$ (2,648)
$ (34,535)
$ (5,852)
ACQUISITION (Details)
3 Months Ended
Sep. 30, 2010
Jul. 06, 2010
Apr. 01, 2010
Jul. 31, 2010
Jul. 06, 2010
Business acquisition details
 
 
 
 
 
Receipt of Agnico-Eagle share per Comaplex share by each shareholder of Comaplex (in shares)
 
 
0.1576 
 
 
Outstanding shares (fully diluted) of Comaplex held by Perfora prior to the acquisition (Percent in hundredths)
 
 
0.173 
 
 
Outstanding shares (fully diluted) of Comaplex held prior to the acquisition (Percent in hundredths)
 
 
0.123 
 
 
Number of shares issued by Agnico-Eagle to acquire Comaplex (in shares)
 
 
 
10,210,848 
 
Acquisition costs
 
 
 
 
7,000,000 
Geomark common share received per Meliadine shareholder
 
 
 
 
Meliadine interest owned by the Company (percent in hundredths)
 
 
 
 
Total Purchase Price:
 
 
 
 
 
Comaplex shares previously purchased
 
 
 
 
88,683,000 
Agnico-Eagle shares issued for acquisition
 
 
 
 
578,955,000 
Total purchase price to allocate
 
 
 
 
667,638,000 
Fair Value of Assets Acquired:
 
 
 
 
 
Property
 
 
 
 
939,517,000 
Supplies
 
 
 
 
542,000 
Equipment
 
 
 
 
2,381,000 
Deferred tax liability
 
 
 
 
(274,802,000)
Net assets aquired
 
 
 
 
667,638,000 
Cost basis of Comaplex shares previously purchased
 
24,100,000 
 
 
 
Gain on acquisition of Comaplex
64,500,000 
 
 
 
 
Document and Entity Information
9 Months Ended
Sep. 30, 2010
Document and Entity Information
 
Entity Registrant Name
AGNICO EAGLE MINES LTD 
Entity Central Index Key
0000002809 
Document Type
6-K 
Document Period End Date
2010-09-30 
Amendment Flag
FALSE 
Current Fiscal Year End Date
12/31 
Document Fiscal Year Focus
2010 
Document Fiscal Period Focus
Q3