AGNICO EAGLE MINES LTD, 6-K filed on 5/12/2014
Report of Foreign Issuer
Document and Entity Information
3 Months Ended
Mar. 31, 2014
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, 2014 
Amendment Flag
false 
Current Fiscal Year End Date
--12-31 
Entity Current Reporting Status
Yes 
Document Fiscal Year Focus
2014 
Document Fiscal Period Focus
Q1 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Dec. 31, 2013
Current
 
 
Cash and cash equivalents
$ 181,775 
$ 139,101 
Short-term investments
2,217 
2,217 
Restricted cash
22,779 
28,723 
Trade receivables (note 4)
74,411 
67,300 
Inventories:
 
 
Ore in stockpiles and on leach pads
56,850 
51,826 
Concentrates and dore bars
50,364 
46,658 
Supplies
227,542 
253,160 
Income taxes recoverable
 
18,682 
Available-for-sale securities (notes 4 and 8)
105,818 
74,581 
Fair value of derivative financial instruments (notes 4 and 10)
11,677 
5,590 
Other current assets
101,779 
116,993 
Total current assets
835,212 
804,831 
Other assets
63,270 
66,394 
Goodwill (note 14)
39,017 
39,017 
Property, plant and mine development (note 5)
4,057,627 
4,049,117 
TOTAL ASSETS
4,995,126 
4,959,359 
Current
 
 
Accounts payable and accrued liabilities
145,501 
173,374 
Reclamation provision (note 13)
1,855 
3,452 
Interest payable (note 9)
20,981 
13,803 
Income taxes payable
19,300 
7,523 
Capital lease obligations
10,004 
12,035 
Fair value of derivative financial instruments (notes 4 and 10)
1,878 
467 
Total current liabilities
199,519 
210,654 
Long-term debt (note 9)
920,000 
1,000,000 
Reclamation provision and other liabilities
172,657 
178,236 
Deferred income and mining tax liabilities
597,345 
593,320 
SHAREHOLDERS' EQUITY
 
 
Common shares (note 6): Outstanding - 174,449,937 common shares issued, less 397,996 shares held in trust
3,298,010 
3,294,007 
Stock options (notes 6 and 7)
183,178 
174,470 
Contributed surplus
37,254 
37,254 
Deficit
(418,532)
(513,441)
Accumulated other comprehensive income (loss) (note 6)
5,695 
(15,141)
Total shareholders' equity
3,105,605 
2,977,149 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 4,995,126 
$ 4,959,359 
CONSOLIDATED BALANCE SHEETS (Parenthetical)
Mar. 31, 2014
CONSOLIDATED BALANCE SHEETS
 
Common shares, issued
174,449,937 
Number of shares of common stock held in trust
397,996 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
REVENUES
 
 
Revenues from mining operations
$ 491,767 
$ 420,422 
COSTS, EXPENSES AND OTHER INCOME
 
 
Production
224,091 1
230,053 1
Exploration and corporate development
9,418 
8,571 
Amortization of property, plant and mine development (note 5)
73,537 
70,071 
General and administrative (note 15)
27,239 
37,320 
Impairment loss on available-for-sale securities (note 8)
 
10,995 
Interest expense (note 9)
15,935 
13,916 
Interest and sundry (income) expense
(417)
212 
Gain on derivative financial instruments (note 10)
(3,328)
(2,982)
Gain on sale of available-for-sale securities (note 8)
(273)
 
Foreign currency translation (gain) loss
(8,340)
3,658 
Income before income and mining taxes
153,905 
48,608 
Income and mining taxes expense
45,053 
24,749 
Net income for the period
108,852 
23,859 
Net income per share - basic (note 6)
$ 0.63 
$ 0.14 
Net income per share - diluted (note 6)
$ 0.62 
$ 0.14 
Cash dividends declared per common share
$ 0.08 
   
COMPREHENSIVE INCOME
 
 
Net income for the period
108,852 
23,859 
Available-for-sale securities and other investments:
 
 
Unrealized gain (loss)
21,018 
(173)
Reclassification to impairment loss on available-for-sale securities (note 8)
 
10,995 
Reclassification to realized gain on sale of available-for-sale securities (note 8)
(273)
 
Derivative financial instruments:
 
 
Unrealized (loss) gain
(586)
81 
Reclassification to production costs
545 
10 
Pension benefits:
 
 
Reclassification to general and administrative expense
165 
131 
Income tax recovery impact of reclassification items
(187)
(37)
Income tax expense (recovery) impact of other comprehensive income (loss) items
154 
(19)
Other comprehensive income for the period
20,836 
10,988 
Comprehensive income for the period
$ 129,688 
$ 34,847 
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 Income (Loss)
Balance at Dec. 31, 2012
 
$ 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
 
 
 
 
 
 
 
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) (in shares)
 
212,500 
 
 
 
 
 
Stock options (notes 6 and 7)
 
 
13,688 
 
 
 
 
Shares issued under incentive share purchase plan
 
5,937 
 
 
 
 
 
Shares issued under incentive share purchase (in shares)
 
146,583 
 
 
 
 
 
Shares issued under dividend reinvestment plan
 
8,088 
 
 
 
 
 
Shares issued under dividend reinvestment plan (in shares)
 
211,831 
 
 
 
 
 
Net income for the period
23,859 
 
 
 
 
23,859 
 
Dividends declared (nil, and $ 0.08 per share for the Three months ended March 31, 2013, and 2014, respectively)
 
 
 
 
 
(62)
 
Other comprehensive income 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
 
3,249,744 
158,437 
24,858 
15,665 
31,000 
(16,323)
Balance (in shares) at Mar. 31, 2013
 
172,376,107 
 
 
 
 
 
Balance at Dec. 31, 2013
2,977,149 
3,294,007 
174,470 
 
37,254 
(513,441)
(15,141)
Balance (in shares) at Dec. 31, 2013
 
173,953,975 
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
Shares issued under employee stock option plan (notes 6 and 7)
 
2,478 
(665)
 
 
 
 
Shares issued under employee stock option plan (notes 6 and 7) (in shares)
 
78,475 
 
 
 
 
 
Stock options (notes 6 and 7)
 
 
9,373 
 
 
 
 
Shares issued under incentive share purchase plan
 
3,936 
 
 
 
 
 
Shares issued under incentive share purchase (in shares)
 
127,473 
 
 
 
 
 
Shares issued under dividend reinvestment plan
 
1,989 
 
 
 
 
 
Shares issued under dividend reinvestment plan (in shares)
 
62,826 
 
 
 
 
 
Net income for the period
108,852 
 
 
 
 
108,852 
 
Dividends declared (nil, and $ 0.08 per share for the Three months ended March 31, 2013, and 2014, respectively)
 
 
 
 
 
(13,943)
 
Other comprehensive income for the period
20,836 
 
 
 
 
 
20,836 
Restricted share unit plan (note 6)
 
(4,400)
 
 
 
 
 
Restricted share unit plan (note 6) (in shares)
 
(170,808)
 
 
 
 
 
Balance at Mar. 31, 2014
$ 3,105,605 
$ 3,298,010 
$ 183,178 
 
$ 37,254 
$ (418,532)
$ 5,695 
Balance (in shares) at Mar. 31, 2014
 
174,051,941 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 
 
Dividends declared (in dollars per share)
$ 0.08 
    
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
OPERATING ACTIVITIES
 
 
Net income for the period
$ 108,852 
$ 23,859 
Add (deduct) items not affecting cash:
 
 
Amortization of property, plant and mine development (note 5)
73,537 
70,071 
Deferred income and mining taxes
6,732 
7,026 
Gain on sale of available-for-sale securities (note 8)
(273)
 
Stock-based compensation (note 7)
13,903 
16,277 
Impairment loss on available-for-sale securities (note 8)
 
10,995 
Foreign currency translation (gain) loss
(8,340)
3,658 
Other
260 
5,131 
Adjustment for settlement of environmental remediation
(934)
(2,552)
Changes in non-cash working capital balances:
 
 
Trade receivables
(7,111)
(2,776)
Income taxes
30,459 
(3,908)
Inventories
25,512 
27,992 
Other current assets
15,520 
(5,765)
Accounts payable and accrued liabilities
(17,405)
(10,102)
Interest payable
7,017 
6,166 
Cash provided by operating activities
247,729 
146,072 
INVESTING ACTIVITIES
 
 
Additions to property, plant and mine development (note 5)
(98,793)
(130,634)
Decrease in short-term investments
 
1,304 
Net proceeds from sale of available-for-sale securities (note 8)
613 
 
Purchase of available-for-sale securities and warrants (note 8)
(13,385)
(12,675)
Decrease in restricted cash
5,944 
526 
Cash used in investing activities
(105,621)
(141,479)
FINANCING ACTIVITIES
 
 
Dividends paid
(11,973)
(29,890)
Repayment of capital lease obligations
(4,252)
(2,553)
Sale-leaseback financing
1,027 
 
Proceeds from long-term debt (note 9)
 
40,000 
Repayment of long-term debt (note 9)
(80,000)
(70,000)
Repurchase of common shares for restricted share unit plan (note 6)
(7,518)
(19,000)
Common shares issued (note 6)
4,629 
11,939 
Cash used in financing activities
(98,087)
(69,504)
Effect of exchange rate changes on cash and cash equivalents
(1,347)
(872)
Net increase (decrease) in cash and cash equivalents during the period
42,674 
(65,783)
Cash and cash equivalents, beginning of period
139,101 
298,068 
Cash and cash equivalents, end of period
181,775 
232,285 
SUPPLEMENTAL CASH FLOW INFORMATION
 
 
Interest paid (note 9)
8,151 
6,832 
Income and mining taxes paid
$ 8,149 
$ 21,633 
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 2013 audited annual consolidated financial statements, including the accounting policies and notes thereto, included in the Annual Report and Annual Information Form/Form 40-F for the year ended December 31, 2013. 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, 2014 and the results of operations and cash flows for the three months ended March 31, 2014 and March 31, 2013.

    Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2014.

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, 2013 audited annual consolidated financial statements.

    Under Securities and Exchange Commission ("SEC") Staff Accounting Bulletin 74, the Company is required to disclose information related to new accounting standards that have not yet been adopted. Agnico Eagle has evaluated newly issued accounting standards that have not yet been adopted and does not expect them to significantly impact the Company's consolidated financial statements.

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 sets out the Company's financial assets and liabilities measured at fair value as at March 31, 2014 using the fair value hierarchy:

   
  Level 1   Level 2   Level 3   Total  
 

Financial assets:

                         
 

Trade receivables(i)

  $   $ 74,411   $   $ 74,411  
 

Available-for-sale securities(ii)

    100,572     5,246         105,818  
 

Fair value of derivative financial instruments(iii)

        11,677         11,677  
                     
 

 

  $ 100,572   $ 91,334   $   $ 191,906  
                     
 

Financial liabilities:

                         
 

Fair value of derivative financial instruments(iii)

  $   $ 1,878   $   $ 1,878  
                     
  • The following table sets out the Company's financial assets and liabilities measured at fair value as at December 31, 2013 using the fair value hierarchy:

   
  Level 1   Level 2   Level 3   Total  
 

Financial assets:

                         
 

Trade receivables(i)

  $   $ 67,300   $   $ 67,300  
 

Available-for-sale securities(ii)

    74,581             74,581  
 

Fair value of derivative financial instruments(iii)

        5,590         5,590  
                     
 

 

  $ 74,581   $ 72,890   $   $ 147,471  
                     
 

Financial liabilities:

                         
 

Fair value of derivative financial instruments(iii)

  $   $ 467   $   $ 467  
                     

  • Notes:

    (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 representing shares of publicly traded entities are recorded at fair value using quoted market prices (classified within Level 1 of the fair value hierarchy). Available-for-sale securities representing shares of non-publicly traded entities are recorded at fair value using quoted market prices (classified within Level 2 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 investee data, the length of time and the extent to which the fair value has been less than cost, the financial condition of the investee 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, 2014   As at December 31, 2013  
   
  Cost   Accumulated
Amortization
  Net Book
Value
  Cost   Accumulated
Amortization
  Net Book
Value
 
 

Mining properties

  $ 1,371,625   $ 103,268   $ 1,268,357   $ 1,361,867   $ 89,700   $ 1,272,167  
 

Plant and equipment

    2,486,339     718,617     1,767,722     2,286,887     662,394     1,624,493  
 

Mine development costs

    1,070,207     249,645     820,562     1,038,564     239,898     798,666  
 

Construction in Progress:

                                     
 

Meliadine project

    200,986         200,986     192,413         192,413  
 

La India mine(i)

                161,378         161,378  
                             
 

 

  $ 5,129,157   $ 1,071,530   $ 4,057,627   $ 5,041,109   $ 991,992   $ 4,049,117  
                             

  • Note:

    (i)
    Upon achieving commercial production at the La India mine in February 2014, related costs accumulated in construction in progress were reclassified to mine development costs within property, plant and mine development.
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY

6.     SHAREHOLDERS' EQUITY

  • In 2009, the Company implemented the restricted share unit ("RSU") plan for certain employees. Effective January 1, 2012, the RSU plan was amended to include directors and senior executives of the Company.

    A deferred compensation balance is recorded for the total grant date value on the date of each RSU plan grant. The deferred compensation balance is recorded as a reduction of shareholders' equity and is amortized as compensation expense over the applicable vesting period.

    During the first quarter of 2014, the Company funded the RSU plan by transferring $7.5 million (first quarter of 2013 — $19.0 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. The common shares purchased and held by the Trust are treated as not outstanding for the basic earnings per share ("EPS") calculations but are included in the basic EPS calculations once they have vested. All of the non-vested common shares held by the Trust are included in the diluted EPS calculations, unless the impact is anti-dilutive.

    The following table sets out the maximum number of common shares that would be outstanding if all instruments outstanding at March 31, 2014 were exercised:

 

Common shares outstanding at March 31, 2014

    174,051,941  
 

Employee stock options

    12,535,910  
 

RSU plan

    397,996  
         
 

 

    186,985,847  
         
  • The following table sets out the weighted average number of common shares used in the calculation of basic and diluted net income per share:

   
  Three Months Ended
March 31,
 
   
  2014   2013  
 

Net income for the period

  $ 108,852   $ 23,859  
             
 

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

    173,972     172,280  
 

Add: Dilutive impact of shares related to RSU plan

    313     343  
             
 

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

    174,285     172,623  
             
 

Net income per share — basic

  $ 0.63   $ 0.14  
             
 

Net income per share — diluted

  $ 0.62   $ 0.14  
             
  • Diluted net income per share has been calculated using the treasury stock method. In applying the treasury stock method, outstanding 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 would be anti-dilutive.

    For the three months ended March 31, 2014, all employee stock options were excluded from the calculation of diluted net income per share as their effect would have been anti-dilutive.

    For the three months ended March 31, 2013, all employee stock options and warrants were excluded from the calculation of diluted net income per share as their effect would have been anti-dilutive. The warrants expired unexercised on December 3, 2013.

    Accumulated other comprehensive income (loss)

    The following table sets out the changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2014:

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

Accumulated other comprehensive (loss) income, December 31, 2013

  $ (16,206 ) $ 3,965   $ (148 ) $ (2,752 ) $ (15,141 )
                         
 

Unrealized other comprehensive gain (loss)

        21,018     (586 )       20,432  
 

Income tax expense impact

            154         154  
 

Reclassifications from accumulated other comprehensive (loss) income to the Consolidated Statements of Income

        (273 )   545     165     437  
 

Income tax recovery impact

            (144 )   (43 )   (187 )
                         
 

Other comprehensive income (loss) for the period

        20,745     (31 )   122     20,836  
                         
 

Accumulated other comprehensive (loss) income, March 31, 2014

  $ (16,206 ) $ 24,710   $ (179 ) $ (2,630 ) $ 5,695  
                         
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

7.     STOCK-BASED COMPENSATION

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

   
  Three Months Ended
March 31, 2014
  Three Months Ended
March 31, 2013
 
   
  Number of
Stock
Options
  Weighted
Average
Exercise Price
  Number of
Stock
Options
  Weighted
Average
Exercise Price
 
 

Outstanding, beginning of period

    11,283,535   C$ 56.02     10,587,126   C$ 56.60  
 

Granted

    3,180,000     28.04     2,803,000     52.13  
 

Exercised

    (78,475 )   28.03     (212,500 )   37.06  
 

Forfeited

    (146,500 )   50.80     (156,500 )   61.88  
 

Expired

    (1,702,650 )   62.77     (1,294,635 )   54.44  
                     
 

Outstanding, end of period

    12,535,910   C$ 48.24     11,726,491   C$ 56.05  
                     
 

Options exercisable, end of period

    8,102,660   C$ 54.52     7,505,295   C$ 59.41  
                     
  • Agnico Eagle estimated the fair value of stock options under the Black-Scholes option pricing model using the following weighted average assumptions:

   
  Three Months Ended
March 31,
 
   
  2014   2013  
 

Risk-free interest rate

    1.56%     1.49%  
 

Expected life of stock options (in years)

    2.6     2.7  
 

Expected volatility of Agnico Eagle's share price

    42.5%     35.0%  
 

Expected dividend yield

    3.83%     1.73%  
AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES

8.     AVAILABLE-FOR-SALE SECURITIES

  • The Company's investments in available-for-sale securities consist primarily of investments in common shares of entities in the mining industry. The cost basis of available-for-sale securities is determined using the average cost method and they are carried at fair value. Detail on the Company's available-for-sale securities holdings is set out below:

   
  As at
March 31,
2014
  As at
December 31,
2013
 
 

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

             
 

Cost (net of impairments)

  $ 41,028   $ 30,583  
 

Unrealized gains in accumulated other comprehensive income (loss)

    31,123     11,530  
             
 

Estimated fair value

    72,151     42,113  
             
 

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

             
 

Cost (net of impairments)

    39,987     39,933  
 

Unrealized losses in accumulated other comprehensive income (loss)

    (6,320 )   (7,465 )
             
 

Estimated fair value

    33,667     32,468  
             
 

Total estimated fair value of available-for-sale securities

  $ 105,818   $ 74,581  
             
  • During the first quarter of 2014, the Company received proceeds of $0.6 million (first quarter of 2013 — nil) and recognized a gain before income taxes of $0.3 million (first quarter of 2013 — nil) on the sale of certain available-for-sale securities.

    During the first quarter of 2014, 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 2014, the Company recorded an impairment loss of nil (first quarter of 2013 — $11.0 million) on certain available-for-sale securities that were determined to be other-than-temporarily impaired.

    At March 31, 2014, the fair value of available-for-sale securities in an unrealized loss position was $33.7 million (December 31, 2013 — $32.5 million) with total unrealized losses in accumulated other comprehensive loss of $6.3 million (December 31, 2013 — $7.5 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, 2014.

LONG-TERM DEBT
LONG-TERM DEBT

9.     LONG-TERM DEBT

  • Credit Facility

    On June 22, 2010, the Company amended and restated one of its two unsecured revolving bank credit facilities (the "Credit Facility") and terminated its other unsecured revolving bank credit facility, increasing the amount available from an aggregate $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 amending pricing terms.

    At March 31, 2014, the Credit Facility was drawn down by $120.0 million (December 31, 2013 — $200.0 million). Amounts drawn down, together with outstanding letters of credit under the Credit Facility, resulted in Credit Facility availability of $1,078.9 million at March 31, 2014.

    2012 Notes

    On July 24, 2012, the Company closed a $200.0 million private placement of guaranteed senior unsecured notes (the "2012 Notes") which, on issuance, had a weighted average maturity of 11.0 years and weighted average yield of 4.95%.

    The following table sets out details of 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 $600.0 million private placement of guaranteed senior unsecured notes (the "2010 Notes") which, on issuance, had a weighted average maturity of 9.84 years and weighted average yield of 6.59%.

    The following table sets out details of the individual series of the 2010 Notes:

   
  Principal   Interest Rate   Maturity Date  
 

Series A

  $ 115,000     6.13%     4/7/2017  
 

Series B

    360,000     6.67%     4/7/2020  
 

Series C

    125,000     6.77%     4/7/2022  
                     
 

 

  $ 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 and sell material assets.

    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 in the Credit Facility, 2012 Notes and 2010 Notes as at March 31, 2014.

    Interest on long-term debt

    Total long-term debt interest costs incurred during the first quarter of 2014 were $13.2 million (first quarter of 2013 — $12.3 million).

    Total interest costs capitalized to property, plant and mine development for the first quarter of 2014 were $0.2 million (first quarter of 2013 — $1.1 million).

    During the first quarter of 2014, cash interest paid on the Credit Facility was $1.1 million (first quarter of 2013 — nil), cash standby fees paid on the Credit Facility were $1.4 million (first quarter of 2013 — $1.2 million) and cash interest paid on the 2010 Notes and 2012 Notes was $4.9 million (first quarter of 2013 — $4.9 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 rates. The hedged items represent a portion of the Canadian dollar denominated cash outflows arising from Canadian dollar denominated expenditures.

    As at March 31, 2014, the Company had outstanding foreign exchange zero cost collars 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. At March 31, 2014, the zero cost collars hedged $180.0 million of 2014 expenditures and the Company recognized mark-to-market adjustments in accumulated other comprehensive income (loss).

    Amounts deferred in accumulated other comprehensive income (loss) are reclassified to the production costs line item on the interim unaudited consolidated statements of income and comprehensive income, as applicable, when the hedged transaction has occurred. Mark-to-market gains (losses) related to foreign exchange derivative financial instruments are recorded at fair value 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 the first quarter of 2014 and 2013 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, 2014 or March 31, 2013. The call option premiums 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

    To mitigate the risks associated with fluctuating diesel fuel prices, the Company uses derivative financial instrument 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 that expired in 2013 and totaled 10.5 million gallons of heating oil were entered into at an average price of $2.99 per gallon, which was approximately 55.0% of the Meadowbank mine's expected 2013 diesel fuel operating costs. These contracts did qualify for hedge accounting and the related market-to-market adjustments prior to settlement were recognized in accumulated other comprehensive loss. All heating oil derivative financial instrument contracts settled in 2013. No heating oil derivative financial instrument contracts were outstanding at March 31, 2014 or December 31, 2013.

    Amounts deferred in accumulated other comprehensive income (loss) are reclassified to the production costs line item on the 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.

    As at March 31, 2014 and December 31, 2013, there were no metal derivative positions. The Company may from time to time utilize short-term (including intra-quarter) financial instruments as part of its strategy to minimize risks and optimize returns on its byproduct metal sales.

    Other required derivative financial instrument disclosures can be found in the shareholder's equity note to the interim unaudited consolidated financial statements.

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

    The following table sets out a summary of the amounts recognized in the gain on derivative financial instruments line item of the interim unaudited consolidated statements of income and comprehensive income:

   
  Three Months Ended
March 31,
 
   
  2014   2013  
 

Premiums realized on written foreign exchange call options

  $ 832   $ 684  
 

Realized loss on warrants

    (185 )    
 

Mark-to-market (loss) gain on derivative equity contracts(i)

    (448 )   833  
 

Mark-to-market gain on warrants(i)

    3,129     1,465  
             
 

Gain on derivative financial instruments

  $ 3,328   $ 2,982  
             

  • Note:

    (i)
    Mark-to-market gains and losses on financial instruments that did not qualify for hedge accounting are recognized through the gain on derivative financial instruments line item of the interim unaudited consolidated statements of income and comprehensive income and through the other line item of the interim unaudited consolidated statements of cash flows.
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, 2014, the total amount of these guarantees was $176.6 million.

SEGMENTED INFORMATION
SEGMENTED INFORMATION

12.   SEGMENTED INFORMATION

  • Agnico Eagle operates in a single industry, namely 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. Each of the Company's significant operating mines and projects are considered to be separate segments. Certain operating segments that do not meet the quantitative thresholds are still disclosed when the Company believes that the information is useful. Segment results for the first quarter of 2013 have been retrospectively revised to reflect organizational changes in 2013 that created three business units consisting of the Northern Business unit, the Southern Business unit, and the Exploration business unit. However, under this revised organizational structure the Chief Executive Officer also reviews segment income (defined as revenues from mining operations less production costs, exploration and corporate development and impairment losses) on a mine-by-mine basis. The following are the Company's reportable segments organized according to their relationship with the Company's three business units and reflect how the Company manages its business and how it classifies its operations for planning and measuring performance:

 

Northern Business:

  LaRonde mine, Lapa mine, Goldex mine, Meadowbank mine, Meliadine project and Kittila mine
 

Southern Business:

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

Exploration:

  United States Exploration office, Europe Exploration office, Canada Exploration offices and Latin America Exploration office
  • The accounting policies of the reportable segments are the same as those described in the December 31, 2013 audited annual consolidated financial statements. There are no transactions between the reportable segments affecting revenue. Production costs for the reportable segments are net of intercompany transactions.

    Corporate and other (including the Urastar property) assets and specific income and expense items are set out separately below.

    The Goldex mine's M and E Zones achieved commercial production on October 1, 2013. The La India mine achieved commercial production on February 1, 2014.

 
Three Months Ended
March 31, 2014
  Revenues from
Mining
Operations
  Production
Costs
  Exploration and
Corporate
Development
  Segment
Income
(Loss)
 
 

Northern Business:

                         
 

LaRonde mine

  $ 92,704   $ (49,587 ) $   $ 43,117  
 

Lapa mine

    30,690     (15,453 )       15,237  
 

Goldex mine

    25,370     (14,791 )       10,579  
 

Meadowbank mine

    191,040     (71,069 )       119,971  
 

Kittila mine

    48,462     (29,425 )       19,037  
                     
 

Total Northern Business

  $ 388,266   $ (180,325 ) $   $ 207,941  
                     
 

Southern Business:

                         
 

Pinos Altos mine

  $ 70,483   $ (31,886 ) $   $ 38,597  
 

Creston Mascota deposit at Pinos Altos

    13,539     (6,028 )       7,511  
 

La India mine

    19,479     (5,852 )       13,627  
                     
 

Total Southern Business

  $ 103,501   $ (43,766 ) $   $ 59,735  
                     
 

Exploration

  $   $   $ (9,418 ) $ (9,418 )
                     
 

Segments totals

  $ 491,767   $ (224,091 ) $ (9,418 ) $ 258,258  
                     
 

Total segments income

  $ 258,258  
 

Corporate and other:

       
 

Amortization of property, plant and mine development

    (73,537 )
 

General and administrative

    (27,239 )
 

Interest expense

    (15,935 )
 

Interest and sundry income

    417  
 

Gain on derivative financial instruments

    3,328  
 

Gain on sale of available-for-sale securities

    273  
 

Foreign currency translation gain

    8,340  
                           
 

Income before income and mining taxes

  $ 153,905  
                           


 

 
Three Months Ended
March 31, 2013
  Revenues from
Mining
Operations
  Production
Costs
  Exploration and
Corporate
Development
  Segment
Income
(Loss)
 
 

Northern Business:

                         
 

LaRonde mine

  $ 91,198   $ (57,903 ) $   $ 33,295  
 

Lapa mine

    38,398     (16,610 )       21,788  
 

Meadowbank mine

    130,092     (93,589 )       36,503  
 

Kittila mine

    72,138     (27,182 )       44,956  
                     
 

Total Northern Business

  $ 331,826   $ (195,284 ) $   $ 136,542  
                     
 

Southern Business:

                         
 

Pinos Altos mine

  $ 87,690   $ (31,652 ) $   $ 56,038  
 

Creston Mascota deposit at Pinos Altos

    906     (3,117 )       (2,211 )
                     
 

Total Southern Business

  $ 88,596   $ (34,769 ) $   $ 53,827  
                     
 

Exploration

  $   $   $ (8,571 ) $ (8,571 )
                     
 

Segments totals

  $ 420,422   $ (230,053 ) $ (8,571 ) $ 181,798  
                     
 

Total segments income

  $ 181,798  
 

Corporate and other:

       
 

Amortization of property, plant and mine development

    (70,071 )
 

General and administrative

    (37,320 )
 

Impairment loss on available-for-sale securities

    (10,995 )
 

Interest expense

    (13,916 )
 

Interest and sundry expense

    (212 )
 

Gain on derivative financial instruments

    2,982  
 

Foreign currency translation loss

    (3,658 )
                           
 

Income before income and mining taxes

  $ 48,608  
                           


 

   
  Total Assets as at  
   
  March 31,
2014
  December 31,
2013
 
 

Northern Business:

             
 

LaRonde mine

  $ 883,495   $ 878,719  
 

Lapa mine

    77,766     78,293  
 

Goldex mine

    127,215     120,601  
 

Meadowbank mine

    658,330     711,387  
 

Meliadine project

    884,979     877,923  
 

Kittila mine

    885,589     870,332  
             
 

Total Northern Business

  $ 3,517,374   $ 3,537,255  
             
 

Southern Business:

             
 

Pinos Altos mine

  $ 546,153   $ 537,560  
 

Creston Mascota deposit at Pinos Altos

    88,281     86,185  
 

La India mine

    536,618     512,450  
             
 

Total Southern Business

  $ 1,171,052   $ 1,136,195  
             
 

Exploration

  $ 22,750   $ 19,838  
             
 

Corporate and other

  $ 283,950   $ 266,071  
             
 

Total

  $ 4,995,126   $ 4,959,359  
             
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's GEZ on October 19, 2011, Agnico Eagle recognized an environmental remediation liability. During the first quarter of 2014, the Company incurred $1.9 million in remediation costs that were applied against the environmental remediation liability recognized in 2011. As at March 31, 2014, the remaining Goldex mine environmental remediation liability was $12.4 million, $0.8 million of which was classified as a current liability.

ACQUISITIONS
ACQUISITIONS

14.   ACQUISITIONS

  • Urastar Gold Corporation

    On May 16, 2013, the Company completed the acquisition of all of the issued and outstanding common shares of Urastar Gold Corporation ("Urastar") pursuant to a court-approved plan of arrangement under the Business Corporations Act (British Columbia) for cash consideration of $10.1 million. The Urastar acquisition was accounted for as a business combination and goodwill of $9.8 million was recognized on the Company's consolidated balance sheets.

    The transaction costs associated with the acquisition totaling $0.7 million were expensed through the general and administrative line item of the consolidated statements of income (loss) and comprehensive income (loss) during the year ended December 31, 2013.

    The following table sets out the allocation of the purchase price to assets acquired and liabilities assumed, based on management's estimates of fair value:

 

Total purchase price:

       
 

Cash paid for acquisition

  $ 10,127  
 

Fair value of assets acquired and liabilities assumed:

       
 

Mining properties

  $ 1,994  
 

Goodwill

    9,802  
 

Cash and cash equivalents

    76  
 

Trade receivables

    731  
 

Other current assets

    12  
 

Plant and equipment

    2  
 

Accounts payable and accrued liabilities

    (791 )
 

Other liabilities

    (1,573 )
 

Deferred tax liability

    (126 )
         
 

Net assets acquired

  $ 10,127  
         
  • The Company believes that goodwill for the Urastar acquisition arose principally because of the following factors: (1) the going concern value implicit in the Company's ability to sustain and/or grow its business by increasing mineral reserves and mineral resources through new discoveries; and (2) the requirement to record a deferred tax liability for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed in a business combination at amounts that do not reflect fair value.

    Pro forma results of operations for the Company assuming the acquisition of Urastar described above had occurred as of January 1, 2013 are detailed below. On a pro forma basis, there would have been no effect on the Company's consolidated revenues.

   
  Year Ended
December 31,
2013
 
   
  Unaudited
 
 

Pro forma net loss for the year

  $ (409,020 )
 

Pro forma net loss per share — basic

  $ (2.37 )
GENERAL AND ADMINISTRATIVE
GENERAL AND ADMINISTRATIVE

15.   GENERAL AND ADMINISTRATIVE

  • As a result of 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 in the first quarter of 2011.

    During the subsequent period ended December 31, 2013, the Company received $9.8 million of insurance proceeds and had a remaining insurance receivable of $0.7 million recorded in the other current assets line item of the consolidated balance sheets as at December 31, 2013. During the first quarter of 2014, the Company received $0.7 million of insurance proceeds and had a remaining insurance receivable of nil as at March 31, 2014.

SUBSEQUENT EVENTS
SUBSEQUENT EVENTS

16.   SUBSEQUENT EVENTS

  • On May 1, 2014, Agnico Eagle announced that the Board approved the payment of a quarterly cash dividend of $0.08 per common share, payable on June 16, 2014 to holders of record of the common shares of the Company on June 2, 2014.

    Acquisition Agreement with Osisko Mining Corporation

    On April 16, 2014, Agnico Eagle, Yamana Gold Inc. ("Yamana") and Osisko Mining Corporation ("Osisko") announced they had entered into an agreement ("the Agreement") pursuant to which Agnico Eagle and Yamana would jointly acquire a 100.0% interest in Osisko's issued and outstanding common shares for total consideration of approximately C$3.9 billion, or C$8.15 per share. The total offer consists of approximately C$1.0 billion in cash, approximately C$2.33 billion in Agnico Eagle and Yamana common shares, and common shares of a new company ("Spinco") with an implied value of approximately C$575.0 million.

    Under the Agreement, Agnico Eagle and Yamana will form a joint acquisition entity (with each company owning 50.0%) which will acquire by way of a plan of arrangement all of the outstanding common shares of Osisko. Upon closing of the transaction, Agnico Eagle and Yamana will each own 50.0% of Osisko, and will form a joint committee to operate the Canadian Malartic Mine in Québec. The partners will also jointly explore and potentially develop the Kirkland Lake assets, and continue the exploration at the Hammond Reef project and the Pandora and Wood-Pandora properties.

    Upon implementation of the Agreement, each outstanding common share of Osisko will be exchanged for: (i) C$2.09 in cash; (ii) 0.07264 of an Agnico Eagle common share (a value of C$2.43 based on the closing price of C$33.45 per share for Agnico Eagle common shares on the Toronto Stock Exchange as of April 15, 2014); (iii) 0.26471 of a Yamana common share (a value of C$2.43 based on the closing price of C$9.18 per share for Yamana common shares on the Toronto Stock Exchange as of April 15, 2014); and (iv) one common share of Spinco with a value of C$1.20 per share.

    Pursuant to the plan of arrangement, certain assets of Osisko will be transferred to Spinco, the common shares of which will be distributed to Osisko shareholders as part of the consideration. The following will be transferred to Spinco: (i) a 5.0% net smelter royalty ("NSR") on the Canadian Malartic Mine; (ii) C$155.0 million in cash; (iii) a 2.0% NSR on the Kirkland Lake assets, the Hammond Reef project and the Pandora and Wood-Pandora properties; (iv) all assets and liabilities of Osisko in its Guerrero camp; and (v) other investments.

    Following the completion of the transaction, Osisko shareholders will own approximately 16.7% of Agnico Eagle's common shares and approximately 14.4% of Yamana's common shares.

    The transaction is subject to the approval of Osisko shareholders by a two thirds vote at a meeting to be held later in May 2014. The approval of the shareholders of Agnico Eagle and Yamana is not required. The Agreement is expected to close by early June 2014 following receipt of all shareholder, court, regulatory and exchange approvals.

    Pursuant to the terms of the Agreement, Osisko is subject to customary non-solicitation covenants. In the event a superior proposal is made to Osisko, Agnico Eagle and Yamana have a five business day right to match such proposal, and under certain circumstances in the event Osisko's Board of Directors changes its recommendation or terminates the Agreement, Osisko has agreed to pay a termination fee of C$195.0 million to Agnico Eagle and Yamana, shared equally. In certain other circumstances where the transaction is not completed, Osisko has agreed to reimburse Agnico Eagle's and Yamana's expenses in the amount of C$10.0 million each for their costs.

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 senior officers, some of whom also are or were directors of the Company, 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 ordered that the two complaints be consolidated under the caption In re Agnico-Eagle Mines Ltd. Securities Litigation, and lead counsel was appointed. On April 6, 2012, a Consolidated Complaint was issued against the Company and certain of its current and former senior officers and directors. The Consolidated Complaint alleges that the Company had violated federal securities law in connection with its disclosure related to the Goldex mine. The Consolidated Complaint seeks, among other things, damages on behalf of persons who purchased or acquired securities of the Company during the period July 28, 2010 to October 19, 2011. The Consolidated Complaint has not been certified as a class action, and the Company intends to vigorously defend it. On January 14, 2013, Judge Oetken granted the Company's motion to dismiss the Consolidated Complaint and all claims therein and denied the plaintiffs' request for leave to amend the Consolidated Complaint. On February 12, 2013, the plaintiffs filed a Notice of Appeal to the United States Court for Appeals for the Second Circuit. The appeal was heard on September 23, 2013, and on October 3, 2013 the Court of Appeals for the Second Circuit affirmed the decision below dismissing the Consolidated Complaint. The time for the plaintiffs to file a petition for a writ of certiorari, requesting a review by the United States Supreme Court, has expired and the judgment dismissing the plaintiffs' Consolidated Complaint is now final and no longer appealable.

    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, some of whom also are or were directors of the Company. 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. On April 17, 2013 an Order was granted on consent certifying a class action proceeding and granting leave for the claims under Section 138 of the Securities Act (Ontario) to proceed. The Company intends to vigorously defend the action on the merits.

    On April 12, 2012, two senior officers of the Company, who also are or were directors 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 with fewer than 50 employees resident 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. On October 1, 2013, the Quebec court certified the class action on terms identical to those set out in the consent Order granted in Ontario on April 17, 2013. No date has been set for the hearing to argue the class action on the merits. The Company intends to vigorously defend the action on the merits.

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 2014 interim unaudited consolidated financial statements.

FAIR VALUE MEASUREMENT (Tables)
Financial assets and liabilities measured at fair value using the fair value hierarchy
  • The following table sets out the Company's financial assets and liabilities measured at fair value as at March 31, 2014 using the fair value hierarchy:

   
  Level 1   Level 2   Level 3   Total  
 

Financial assets:

                         
 

Trade receivables(i)

  $   $ 74,411   $   $ 74,411  
 

Available-for-sale securities(ii)

    100,572     5,246         105,818  
 

Fair value of derivative financial instruments(iii)

        11,677         11,677  
                     
 

 

  $ 100,572   $ 91,334   $   $ 191,906  
                     
 

Financial liabilities:

                         
 

Fair value of derivative financial instruments(iii)

  $   $ 1,878   $   $ 1,878  
                     
  • The following table sets out the Company's financial assets and liabilities measured at fair value as at December 31, 2013 using the fair value hierarchy:

   
  Level 1   Level 2   Level 3   Total  
 

Financial assets:

                         
 

Trade receivables(i)

  $   $ 67,300   $   $ 67,300  
 

Available-for-sale securities(ii)

    74,581             74,581  
 

Fair value of derivative financial instruments(iii)

        5,590         5,590  
                     
 

 

  $ 74,581   $ 72,890   $   $ 147,471  
                     
 

Financial liabilities:

                         
 

Fair value of derivative financial instruments(iii)

  $   $ 467   $   $ 467  
                     

  • Notes:

    (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 representing shares of publicly traded entities are recorded at fair value using quoted market prices (classified within Level 1 of the fair value hierarchy). Available-for-sale securities representing shares of non-publicly traded entities are recorded at fair value using quoted market prices (classified within Level 2 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, 2014   As at December 31, 2013  
   
  Cost   Accumulated
Amortization
  Net Book
Value
  Cost   Accumulated
Amortization
  Net Book
Value
 
 

Mining properties

  $ 1,371,625   $ 103,268   $ 1,268,357   $ 1,361,867   $ 89,700   $ 1,272,167  
 

Plant and equipment

    2,486,339     718,617     1,767,722     2,286,887     662,394     1,624,493  
 

Mine development costs

    1,070,207     249,645     820,562     1,038,564     239,898     798,666  
 

Construction in Progress:

                                     
 

Meliadine project

    200,986         200,986     192,413         192,413  
 

La India mine(i)

                161,378         161,378  
                             
 

 

  $ 5,129,157   $ 1,071,530   $ 4,057,627   $ 5,041,109   $ 991,992   $ 4,049,117  
                             

  • Note:

    (i)
    Upon achieving commercial production at the La India mine in February 2014, related costs accumulated in construction in progress were reclassified to mine development costs within property, plant and mine development.
SHAREHOLDERS' EQUITY (Tables)

 

 

Common shares outstanding at March 31, 2014

    174,051,941  
 

Employee stock options

    12,535,910  
 

RSU plan

    397,996  
         
 

 

    186,985,847  
         
  •  

 

   
  Three Months Ended
March 31,
 
   
  2014   2013  
 

Net income for the period

  $ 108,852   $ 23,859  
             
 

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

    173,972     172,280  
 

Add: Dilutive impact of shares related to RSU plan

    313     343  
             
 

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

    174,285     172,623  
             
 

Net income per share — basic

  $ 0.63   $ 0.14  
             
 

Net income per share — diluted

  $ 0.62   $ 0.14  
             
  •  

 

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

Accumulated other comprehensive (loss) income, December 31, 2013

  $ (16,206 ) $ 3,965   $ (148 ) $ (2,752 ) $ (15,141 )
                         
 

Unrealized other comprehensive gain (loss)

        21,018     (586 )       20,432  
 

Income tax expense impact

            154         154  
 

Reclassifications from accumulated other comprehensive (loss) income to the Consolidated Statements of Income

        (273 )   545     165     437  
 

Income tax recovery impact

            (144 )   (43 )   (187 )
                         
 

Other comprehensive income (loss) for the period

        20,745     (31 )   122     20,836  
                         
 

Accumulated other comprehensive (loss) income, March 31, 2014

  $ (16,206 ) $ 24,710   $ (179 ) $ (2,630 ) $ 5,695  
                         
STOCK-BASED COMPENSATION (Tables)

 

   
  Three Months Ended
March 31, 2014
  Three Months Ended
March 31, 2013
 
   
  Number of
Stock
Options
  Weighted
Average
Exercise Price
  Number of
Stock
Options
  Weighted
Average
Exercise Price
 
 

Outstanding, beginning of period

    11,283,535   C$ 56.02     10,587,126   C$ 56.60  
 

Granted

    3,180,000     28.04     2,803,000     52.13  
 

Exercised

    (78,475 )   28.03     (212,500 )   37.06  
 

Forfeited

    (146,500 )   50.80     (156,500 )   61.88  
 

Expired

    (1,702,650 )   62.77     (1,294,635 )   54.44  
                     
 

Outstanding, end of period

    12,535,910   C$ 48.24     11,726,491   C$ 56.05  
                     
 

Options exercisable, end of period

    8,102,660   C$ 54.52     7,505,295   C$ 59.41  
                     

 

   
  Three Months Ended
March 31,
 
   
  2014   2013  
 

Risk-free interest rate

    1.56%     1.49%  
 

Expected life of stock options (in years)

    2.6     2.7  
 

Expected volatility of Agnico Eagle's share price

    42.5%     35.0%  
 

Expected dividend yield

    3.83%     1.73%  
AVAILABLE-FOR-SALE SECURITIES (Tables)
Schedule of available-for-sale securities

 

   
  As at
March 31,
2014
  As at
December 31,
2013
 
 

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

             
 

Cost (net of impairments)

  $ 41,028   $ 30,583  
 

Unrealized gains in accumulated other comprehensive income (loss)

    31,123     11,530  
             
 

Estimated fair value

    72,151     42,113  
             
 

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

             
 

Cost (net of impairments)

    39,987     39,933  
 

Unrealized losses in accumulated other comprehensive income (loss)

    (6,320 )   (7,465 )
             
 

Estimated fair value

    33,667     32,468  
             
 

Total estimated fair value of available-for-sale securities

  $ 105,818   $ 74,581  
             
LONG-TERM DEBT (Tables)
  • The following table sets out details of 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              
                     
  • The following table sets out details of the individual series of the 2010 Notes:

   
  Principal   Interest Rate   Maturity Date  
 

Series A

  $ 115,000     6.13%     4/7/2017  
 

Series B

    360,000     6.67%     4/7/2020  
 

Series C

    125,000     6.77%     4/7/2022  
                     
 

 

  $ 600,000              
                     
FINANCIAL INSTRUMENTS (Tables)
Summary of the amounts recognized in the (gain) loss on derivative financial instruments line item of the consolidated statements of income (loss) and comprehensive income (loss)
  •  

 

   
  Three Months Ended
March 31,
 
   
  2014   2013  
 

Premiums realized on written foreign exchange call options

  $ 832   $ 684  
 

Realized loss on warrants

    (185 )    
 

Mark-to-market (loss) gain on derivative equity contracts(i)

    (448 )   833  
 

Mark-to-market gain on warrants(i)

    3,129     1,465  
             
 

Gain on derivative financial instruments

  $ 3,328   $ 2,982  
             

  • Note:

    (i)
    Mark-to-market gains and losses on financial instruments that did not qualify for hedge accounting are recognized through the gain on derivative financial instruments line item of the interim unaudited consolidated statements of income and comprehensive income and through the other line item of the interim unaudited consolidated statements of cash flows.
SEGMENTED INFORMATION (Tables)
Segment reporting information
  •  

 

 
Three Months Ended
March 31, 2014
  Revenues from
Mining
Operations
  Production
Costs
  Exploration and
Corporate
Development
  Segment
Income
(Loss)
 
 

Northern Business:

                         
 

LaRonde mine

  $ 92,704   $ (49,587 ) $   $ 43,117  
 

Lapa mine

    30,690     (15,453 )       15,237  
 

Goldex mine

    25,370     (14,791 )       10,579  
 

Meadowbank mine

    191,040     (71,069 )       119,971  
 

Kittila mine

    48,462     (29,425 )       19,037  
                     
 

Total Northern Business

  $ 388,266   $ (180,325 ) $   $ 207,941  
                     
 

Southern Business:

                         
 

Pinos Altos mine

  $ 70,483   $ (31,886 ) $   $ 38,597  
 

Creston Mascota deposit at Pinos Altos

    13,539     (6,028 )       7,511  
 

La India mine

    19,479     (5,852 )       13,627  
                     
 

Total Southern Business

  $ 103,501   $ (43,766 ) $   $ 59,735  
                     
 

Exploration

  $   $   $ (9,418 ) $ (9,418 )
                     
 

Segments totals

  $ 491,767   $ (224,091 ) $ (9,418 ) $ 258,258  
                     
 

Total segments income

  $ 258,258  
 

Corporate and other:

       
 

Amortization of property, plant and mine development

    (73,537 )
 

General and administrative

    (27,239 )
 

Interest expense

    (15,935 )
 

Interest and sundry income

    417  
 

Gain on derivative financial instruments

    3,328  
 

Gain on sale of available-for-sale securities

    273  
 

Foreign currency translation gain

    8,340  
                           
 

Income before income and mining taxes

  $ 153,905  
                           


 

 
Three Months Ended
March 31, 2013
  Revenues from
Mining
Operations
  Production
Costs
  Exploration and
Corporate
Development
  Segment
Income
(Loss)
 
 

Northern Business:

                         
 

LaRonde mine

  $ 91,198   $ (57,903 ) $   $ 33,295  
 

Lapa mine

    38,398     (16,610 )       21,788  
 

Meadowbank mine

    130,092     (93,589 )       36,503  
 

Kittila mine

    72,138     (27,182 )       44,956  
                     
 

Total Northern Business

  $ 331,826   $ (195,284 ) $   $ 136,542  
                     
 

Southern Business:

                         
 

Pinos Altos mine

  $ 87,690   $ (31,652 ) $   $ 56,038  
 

Creston Mascota deposit at Pinos Altos

    906     (3,117 )       (2,211 )
                     
 

Total Southern Business

  $ 88,596   $ (34,769 ) $   $ 53,827  
                     
 

Exploration

  $   $   $ (8,571 ) $ (8,571 )
                     
 

Segments totals

  $ 420,422   $ (230,053 ) $ (8,571 ) $ 181,798  
                     
 

Total segments income

  $ 181,798  
 

Corporate and other:

       
 

Amortization of property, plant and mine development

    (70,071 )
 

General and administrative

    (37,320 )
 

Impairment loss on available-for-sale securities

    (10,995 )
 

Interest expense

    (13,916 )
 

Interest and sundry expense

    (212 )
 

Gain on derivative financial instruments

    2,982  
 

Foreign currency translation loss

    (3,658 )
                           
 

Income before income and mining taxes

  $ 48,608  
                           


 

   
  Total Assets as at  
   
  March 31,
2014
  December 31,
2013
 
 

Northern Business:

             
 

LaRonde mine

  $ 883,495   $ 878,719  
 

Lapa mine

    77,766     78,293  
 

Goldex mine

    127,215     120,601  
 

Meadowbank mine

    658,330     711,387  
 

Meliadine project

    884,979     877,923  
 

Kittila mine

    885,589     870,332  
             
 

Total Northern Business

  $ 3,517,374   $ 3,537,255  
             
 

Southern Business:

             
 

Pinos Altos mine

  $ 546,153   $ 537,560  
 

Creston Mascota deposit at Pinos Altos

    88,281     86,185  
 

La India mine

    536,618     512,450  
             
 

Total Southern Business

  $ 1,171,052   $ 1,136,195  
             
 

Exploration

  $ 22,750   $ 19,838  
             
 

Corporate and other

  $ 283,950   $ 266,071  
             
 

Total

  $ 4,995,126   $ 4,959,359  
             
ACQUISITIONS (Tables)

 

 

Total purchase price:

       
 

Cash paid for acquisition

  $ 10,127  
 

Fair value of assets acquired and liabilities assumed:

       
 

Mining properties

  $ 1,994  
 

Goodwill

    9,802  
 

Cash and cash equivalents

    76  
 

Trade receivables

    731  
 

Other current assets

    12  
 

Plant and equipment

    2  
 

Accounts payable and accrued liabilities

    (791 )
 

Other liabilities

    (1,573 )
 

Deferred tax liability

    (126 )
         
 

Net assets acquired

  $ 10,127  
         

 

   
  Year Ended
December 31,
2013
 
   
  Unaudited
 
 

Pro forma net loss for the year

  $ (409,020 )
 

Pro forma net loss per share — basic

  $ (2.37 )
FAIR VALUE MEASUREMENT (Details) (Fair value measured on recurring basis, USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Dec. 31, 2013
Level 1
 
 
Financial assets:
 
 
Available-for-sale securities
$ 100,572 
$ 74,581 
Total financial assets
100,572 
74,581 
Level 2
 
 
Financial assets:
 
 
Trade receivables
74,411 
67,300 
Available-for-sale securities
5,246 
 
Fair value of derivative financial instruments
11,677 
5,590 
Total financial assets
91,334 
72,890 
Financial liabilities:
 
 
Fair value of derivative financial instruments
1,878 
467 
Total
 
 
Financial assets:
 
 
Trade receivables
74,411 
67,300 
Available-for-sale securities
105,818 
74,581 
Fair value of derivative financial instruments
11,677 
5,590 
Total financial assets
191,906 
147,471 
Financial liabilities:
 
 
Fair value of derivative financial instruments
$ 1,878 
$ 467 
PROPERTY, PLANT AND MINE DEVELOPMENT (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Dec. 31, 2013
Property, Plant and Mine Development
 
 
Cost
$ 5,129,157 
$ 5,041,109 
Accumulated Amortization
1,071,530 
991,992 
Net Book Value
4,057,627 
4,049,117 
Mining properties
 
 
Property, Plant and Mine Development
 
 
Cost
1,371,625 
1,361,867 
Accumulated Amortization
103,268 
89,700 
Net Book Value
1,268,357 
1,272,167 
Plant and equipment
 
 
Property, Plant and Mine Development
 
 
Cost
2,486,339 
2,286,887 
Accumulated Amortization
718,617 
662,394 
Net Book Value
1,767,722 
1,624,493 
Mine development costs
 
 
Property, Plant and Mine Development
 
 
Cost
1,070,207 
1,038,564 
Accumulated Amortization
249,645 
239,898 
Net Book Value
820,562 
798,666 
Meliadine project
 
 
Property, Plant and Mine Development
 
 
Cost
200,986 
192,413 
Net Book Value
200,986 
192,413 
La India project
 
 
Property, Plant and Mine Development
 
 
Cost
 
161,378 
Net Book Value
 
$ 161,378 
SHAREHOLDERS' EQUITY (Details) (USD $)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Shareholders' equity
 
 
Common shares outstanding at end of the period
174,051,941 
 
Employee stock options (in shares)
12,535,910 
 
RSU plan (in shares)
397,996 
 
Maximum number of common shares (in shares)
186,985,847 
 
Net income (loss) per share
 
 
Net income for the period
$ 108,852,000 
$ 23,859,000 
Weighted average number of common shares outstanding - basic (in shares)
173,972,000 
172,280,000 
Add: Dilutive impact of shares related to RSU plan (in shares)
313,000 
343,000 
Weighted average number of common shares outstanding - diluted (in shares)
174,285,000 
172,623,000 
Net income per share - basic (in dollars per share)
$ 0.63 
$ 0.14 
Net income per share - diluted (in dollars per share)
$ 0.62 
$ 0.14 
RSU
 
 
Shareholders' equity
 
 
Contribution by the company to employee benefit trust
$ 7,500,000 
$ 19,000,000 
SHAREHOLDERS' EQUITY (Details 2) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Cumulative Translation Adjustment
Dec. 31, 2013
Cumulative Translation Adjustment
Mar. 31, 2014
Available-for-sale Securities and Other Investments
Mar. 31, 2014
Derivative Financial Instruments
Mar. 31, 2014
Pension Benefits
Changes in accumulated other comprehensive loss by component
 
 
 
 
 
 
 
Accumulated other comprehensive (loss) income, beginning of period
$ (15,141)
 
$ (16,206)
$ (16,206)
$ 3,965 
$ (148)
$ (2,752)
Unrealized other comprehensive gain (loss)
20,432 
 
 
 
21,018 
(586)
 
Income tax expense impact
154 
 
 
 
 
154 
 
Reclassifications from accumulated other comprehensive (loss) income to the Consolidated Statements of Income
437 
 
 
 
(273)
545 
165 
Income tax recovery impact
(187)
 
 
 
 
(144)
(43)
Other comprehensive income for the period
20,836 
10,988 
 
 
20,745 
(31)
122 
Accumulated other comprehensive (loss) income, end of period
$ 5,695 
 
$ (16,206)
$ (16,206)
$ 24,710 
$ (179)
$ (2,630)
STOCK-BASED COMPENSATION (Details) (CAD $)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Number of Stock Options
 
 
Outstanding, end of period (in shares)
12,535,910 
 
Employee Stock Option Plan
 
 
Number of Stock Options
 
 
Outstanding, beginning of period (in shares)
11,283,535 
10,587,126 
Granted (in shares)
3,180,000 
2,803,000 
Exercised (in shares)
(78,475)
(212,500)
Forfeited (in shares)
(146,500)
(156,500)
Expired (in shares)
(1,702,650)
(1,294,635)
Outstanding, end of period (in shares)
12,535,910 
11,726,491 
Options exercisable, end of period (in shares)
8,102,660 
7,505,295 
Weighted Average Exercise Price
 
 
Outstanding, weighted average exercise price beginning of period (in Canadian dollars per share)
$ 56.02 
$ 56.60 
Granted, weighted average exercise price (in Canadian dollars per share)
$ 28.04 
$ 52.13 
Exercised, weighted average exercise price (in Canadian dollars per share)
$ 28.03 
$ 37.06 
Forfeited, weighted average exercise price (in Canadian dollars per share)
$ 50.80 
$ 61.88 
Expired - weighted-average exercise price (in Canadian dollars per share)
$ 62.77 
$ 54.44 
Outstanding, weighted average exercise price end of period (in Canadian dollars per share)
$ 48.24 
$ 56.05 
Options exercisable, weighted average exercise price end of period (in Canadian dollars per share)
$ 54.52 
$ 59.41 
STOCK-BASED COMPENSATION (Details 2) (Employee Stock Option Plan)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Employee Stock Option Plan
 
 
Fair value of options weighted average assumptions:
 
 
Pricing model used for valuation of options
Black-Scholes 
Black-Scholes 
Risk-free interest rate (as a percent)
1.56% 
1.49% 
Expected life of stock options
2 years 7 months 6 days 
2 years 8 months 12 days 
Expected volatility of Agnico Eagle's share price (as a percent)
42.50% 
35.00% 
Expected dividend yield (as a percent)
3.83% 
1.73% 
AVAILABLE-FOR-SALE SECURITIES (Details) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Dec. 31, 2013
Schedule of available-for-sale securities
 
 
 
Estimated fair value
$ 105,818,000 
 
$ 74,581,000 
Proceeds from available-for-sale securities
600,000 
   
 
Gain on sale of available-for-sale securities
300,000 
   
 
Other than temporary impairment loss on available-for-sale securities
 
10,995,000 
 
Available-for-sale securities in an unrealized gain position
 
 
 
Schedule of available-for-sale securities
 
 
 
Cost (net of impairments)
41,028,000 
 
30,583,000 
Unrealized gains (losses) in accumulated other comprehensive income (loss)
31,123,000 
 
11,530,000 
Estimated fair value
72,151,000 
 
42,113,000 
Available-for-sale securities in an unrealized loss position
 
 
 
Schedule of available-for-sale securities
 
 
 
Cost (net of impairments)
39,987,000 
 
39,933,000 
Unrealized gains (losses) in accumulated other comprehensive income (loss)
(6,320,000)
 
(7,465,000)
Estimated fair value
33,667,000 
 
32,468,000 
Other than temporary impairment loss on available-for-sale securities
    
$ 11,000,000 
 
LONG-TERM DEBT (Details) (USD $)
3 Months Ended 0 Months Ended 3 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Jun. 22, 2010
Credit Facilities
item
Mar. 31, 2014
Credit Facilities
Mar. 31, 2013
Credit Facilities
Dec. 31, 2013
Credit Facilities
Mar. 31, 2014
Guaranteed senior unsecured notes
Mar. 31, 2013
Guaranteed senior unsecured notes
Mar. 31, 2014
2012 Notes
Jul. 24, 2012
2012 Notes
Jul. 24, 2012
Series A maturing in 2022
Jul. 24, 2012
Series B maturing in 2024
Mar. 31, 2014
2010 Notes
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of credit facilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
120,000,000 
 
200,000,000 
 
 
 
 
 
 
 
 
 
 
 
Availability under credit facility
 
 
 
1,078,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding notes
 
 
 
 
 
 
 
 
200,000,000 
200,000,000 
 
 
600,000,000 
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% 
 
 
 
Long-term debt interest costs
13,200,000 
12,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expenditures capitalized to construction property, plant and mine development
200,000 
1,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash interest payments
8,151,000 
6,832,000 
 
1,100,000 
   
 
4,900,000 
4,900,000 
 
 
 
 
 
 
 
 
 
Cash standby fees
 
 
 
$ 1,400,000 
$ 1,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL INSTRUMENTS (Details) (USD $)
3 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Warrants
Mar. 31, 2013
Warrants
Mar. 31, 2014
Metal
item
Dec. 31, 2013
Metal
item
Mar. 31, 2014
Heating oil
item
Dec. 31, 2013
Heating oil
item
Mar. 31, 2014
Foreign exchange zero cost collars
Designated as hedges
Mar. 31, 2014
Foreign exchange zero cost collars
Designated as hedges
2014 expenditures
Mar. 31, 2014
Call options
Sell
item
Mar. 31, 2013
Call options
Sell
item
Dec. 31, 2013
Expected 2013 diesel fuel exposure
Designated as hedges
Heating oil
gal
Mar. 31, 2014
Equity derivative
Mar. 31, 2013
Equity derivative
Financial instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net premium payable to counterparty
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
Amount of expenditures hedged
 
 
 
 
 
 
 
 
 
180,000,000 
 
 
 
 
 
Number of derivative instruments outstanding
 
 
 
 
 
 
 
 
 
Notional amount
 
 
 
 
 
 
 
 
 
 
 
 
10,500,000 
 
 
Average price (in dollars per gallon)
 
 
 
 
 
 
 
 
 
 
 
 
2.99 
 
 
Percentage of Meadowbank's expected exposure
 
 
 
 
 
 
 
 
 
 
 
 
55.00% 
 
 
(Gain) loss on derivative financial instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums realized on written foreign exchange call options
 
 
 
 
 
 
 
 
 
 
832,000 
684,000 
 
 
 
Realized loss on derivative financial instruments
 
 
(185,000)
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market gain (loss)
 
 
3,129,000 
1,465,000 
 
 
 
 
 
 
 
 
 
(448,000)
833,000 
Gain on derivative financial instruments
$ 3,328,000 
$ 2,982,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2014
COMMITMENTS AND CONTINGENCIES
 
Guarantees provided in the form of letters of credit
$ 176.6 
SEGMENTED INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Dec. 31, 2013
item
SEGMENTED INFORMATION
 
 
 
Minimum required percentage of combined revenue, profit or loss or total assets of reported operating segments
10.00% 
 
 
Number of business units
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
$ 491,767 
$ 420,422 
 
Production Costs
(224,091)1
(230,053)1
 
Exploration and Corporate Development
(9,418)
(8,571)
 
Segments totals
258,258 
181,798 
 
Amortization of Property, Plant and Mine Development
(73,537)
(70,071)
 
General and administrative expenses
(27,239)
(37,320)
 
Impairment loss on available-for-sale securities
 
(10,995)
 
Interest expense
(15,935)
(13,916)
 
Interest and sundry income (expense)
417 
(212)
 
Gain on derivative financial instruments
3,328 
2,982 
 
Gain on sale of available-for-sale securities
273 
 
 
Foreign Currency Translation (Loss) Gain
8,340 
(3,658)
 
Income before income and mining taxes
153,905 
48,608 
 
Total Assets
4,995,126 
 
4,959,359 
Northern Business
 
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
388,266 
331,826 
 
Production Costs
(180,325)
(195,284)
 
Segments totals
207,941 
136,542 
 
Total Assets
3,517,374 
 
3,537,255 
Northern Business |
LaRonde mine
 
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
92,704 
91,198 
 
Production Costs
(49,587)
(57,903)
 
Segments totals
43,117 
33,295 
 
Total Assets
883,495 
 
878,719 
Northern Business |
Lapa mine
 
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
30,690 
38,398 
 
Production Costs
(15,453)
(16,610)
 
Segments totals
15,237 
21,788 
 
Total Assets
77,766 
 
78,293 
Northern Business |
Goldex mine
 
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
25,370 
 
 
Production Costs
(14,791)
 
 
Segments totals
10,579 
 
 
Total Assets
127,215 
 
120,601 
Northern Business |
Meadowbank mine
 
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
191,040 
130,092 
 
Production Costs
(71,069)
(93,589)
 
Segments totals
119,971 
36,503 
 
Total Assets
658,330 
 
711,387 
Northern Business |
Meliadine project
 
 
 
Segment reporting Information
 
 
 
Total Assets
884,979 
 
877,923 
Northern Business |
Kittila mine
 
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
48,462 
72,138 
 
Production Costs
(29,425)
(27,182)
 
Segments totals
19,037 
44,956 
 
Total Assets
885,589 
 
870,332 
Southern Business
 
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
103,501 
88,596 
 
Production Costs
(43,766)
(34,769)
 
Segments totals
59,735 
53,827 
 
Total Assets
1,171,052 
 
1,136,195 
Southern Business |
Pinos Altos mine
 
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
70,483 
87,690 
 
Production Costs
(31,886)
(31,652)
 
Segments totals
38,597 
56,038 
 
Total Assets
546,153 
 
537,560 
Southern Business |
Creston Mascota deposit at Pinos Altos
 
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
13,539 
906 
 
Production Costs
(6,028)
(3,117)
 
Segments totals
7,511 
(2,211)
 
Total Assets
88,281 
 
86,185 
Southern Business |
La India Mine Project
 
 
 
Segment reporting Information
 
 
 
Revenues from Mining Operations
19,479 
 
 
Production Costs
(5,852)
 
 
Segments totals
13,627 
 
 
Total Assets
536,618 
 
512,450 
Exploration
 
 
 
Segment reporting Information
 
 
 
Exploration and Corporate Development
(9,418)
(8,571)
 
Segments totals
(9,418)
(8,571)
 
Total Assets
22,750 
 
19,838 
Corporate and Other Income (Loss)
 
 
 
Segment reporting Information
 
 
 
Segments totals
258,258 
181,798 
 
Amortization of Property, Plant and Mine Development
(73,537)
(70,071)
 
General and administrative expenses
(27,239)
(37,320)
 
Impairment loss on available-for-sale securities
 
(10,995)
 
Interest expense
(15,935)
(13,916)
 
Interest and sundry income (expense)
417 
(212)
 
Gain on derivative financial instruments
3,328 
2,982 
 
Gain on sale of available-for-sale securities
273 
 
 
Foreign Currency Translation (Loss) Gain
8,340 
(3,658)
 
Income before income and mining taxes
153,905 
48,608 
 
Total Assets
$ 283,950 
 
$ 266,071 
RECLAMATION PROVISION (Details) (USD $)
3 Months Ended
Mar. 31, 2014
Dec. 31, 2013
Mar. 31, 2014
Goldex mine
Environmental remediation liability
 
 
 
Environmental remediation
 
 
$ 1,900,000 
Environmental remediation liability
 
 
12,400,000 
Environmental remediation liability, current
$ 1,855,000 
$ 3,452,000 
$ 800,000 
ACQUISITIONS (Details) (USD $)
0 Months Ended 12 Months Ended
Mar. 31, 2014
Dec. 31, 2013
May 16, 2013
Urastar
Dec. 31, 2013
Urastar
Total purchase price:
 
 
 
 
Cash paid for acquisition
 
 
$ 10,127,000 
 
Transaction costs associated with the acquisition
 
 
 
700,000 
Fair value of assets acquired and liabilities assumed:
 
 
 
 
Mining properties
 
 
1,994,000 
 
Goodwill
39,017,000 
39,017,000 
9,802,000 
 
Cash and cash equivalents
 
 
76,000 
 
Trade receivables
 
 
731,000 
 
Other current assets
 
 
12,000 
 
Plant and equipment
 
 
2,000 
 
Accounts payable and accrued liabilities
 
 
(791,000)
 
Other liabilities
 
 
(1,573,000)
 
Deferred tax liability
 
 
(126,000)
 
Net assets acquired
 
 
10,127,000 
 
Pro forma results of operations
 
 
 
 
Pro forma net loss for the year
 
 
 
$ (409,020,000)
Pro forma net loss per share - basic (in dollars per share)
 
 
 
$ (2.37)
GENERAL AND ADMINISTRATIVE (Details) (Meadowbank Mine Fire, USD $)
In Millions, unless otherwise specified
1 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2011
Mar. 31, 2014
Mar. 31, 2011
Dec. 31, 2013
Meadowbank Mine Fire
 
 
 
 
GENERAL AND ADMINISTRATIVE
 
 
 
 
Loss on disposal due to kitchen fire at Meadowbank Mine
$ 6.9 
 
 
 
Costs related to disposal of property
7.4 
 
 
 
Insurance receivable
11.2 
   
11.2 
0.7 
Loss due to fire recognized in the General and Administrative
 
 
3.1 
 
Insurance proceeds received
 
$ 0.7 
 
$ 9.8 
SUBSEQUENT EVENTS (Details) (Subsequent event)
0 Months Ended 0 Months Ended
May 1, 2014
USD ($)
Apr. 15, 2014
CAD ($)
Apr. 16, 2014
Spinco
Forecast
CAD ($)
Apr. 15, 2014
Yamana
CAD ($)
Apr. 16, 2014
Osisko
Forecast
CAD ($)
Apr. 16, 2014
Osisko
Spinco
Forecast
CAD ($)
Apr. 16, 2014
Osisko
Agnico Eagle and Yamana
Forecast
USD ($)
Apr. 16, 2014
Osisko
Agnico Eagle and Yamana
Forecast
CAD ($)
Apr. 16, 2014
Osisko
Yamana
Forecast
CAD ($)
Subsequent Events
 
 
 
 
 
 
 
 
 
Payment of a quarterly cash dividend (in dollars per share)
$ 0.08 
 
 
 
 
 
 
 
 
Percentage of interest acquired jointly
 
 
 
 
50.00% 
 
100.00% 
100.00% 
50.00% 
Total consideration
 
 
 
 
 
 
 
$ 3,900,000,000 
 
Total consideration (in dollars per share)
 
 
 
 
 
 
 
$ 8.15 
 
Cash paid for acquisition
 
 
 
 
 
 
 
1,000,000,000 
 
The implied value of common shares of Agnico Eagle and Yamana to be issued to former Osisko shareholders
 
 
 
 
 
 
2,330,000,000 
 
 
The implied value of common shares of Spinco to be issued to former Osisko shareholders
 
 
575,000,000 
 
 
 
 
 
 
Cash received in exchange for each outstanding common share (in dollars per share)
 
 
 
 
 
 
 
$ 2.09 
 
Number of common shares received in exchange for each outstanding common share
 
 
 
 
0.07264 
 
 
0.26471 
Common share value (in dollars per share)
 
 
 
 
 
$ 1.20 
 
 
 
Common share value (in dollars per share)
 
 
 
 
$ 2.43 
 
 
 
$ 2.43 
Closing price (in dollars per share)
 
$ 33.45 
 
$ 9.18 
 
 
 
 
 
Net smelter royalty on the Canadian Malartic Mine transferred (as a percent)
 
 
 
 
 
5.00% 
 
 
 
Cash transferred to Spinco
 
 
 
 
 
155,000,000 
 
 
 
Net smelter royalty on Kirkland Lake assets, Hammond Reef project, Pandora and Wood-Pandora transferred (as a percent)
 
 
 
 
 
2.00% 
 
 
 
Ownership percentage of acquiree shareholders
 
 
 
 
16.70% 
 
 
 
14.40% 
Percentage of vote required for approval of transaction by acquiree shareholders
 
 
 
 
66.67% 
 
 
 
 
Period of right to match superior proposal to acquiree
 
 
 
 
 
 
5 days 
5 days 
 
Termination fee agreed to be paid under certain circumstances
 
 
 
 
 
 
 
195,000,000 
 
Expenses to be reimbursed by acquiree under other circumstances
 
 
 
 
 
 
 
$ 10,000,000 
 
SECURITIES CLASS ACTION LAWSUITS (Details) (CAD $)
In Millions, unless otherwise specified
0 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended
Feb. 6, 2012
Goldex mine
item
Nov. 30, 2011
Goldex mine
item
Mar. 31, 2014
Goldex Mine Ontario Claim
Apr. 12, 2012
Goldex Mine Claim 2
item
Mar. 31, 2014
Goldex Mine Claim 2
Securities class action lawsuits
 
 
 
 
 
Number of putative class actions against entity
 
 
 
 
Number of complaints to be consolidated
 
 
 
 
Number of directors served with motion regarding Class Action
 
 
 
 
Damages sought
 
 
$ 250.0 
 
$ 100.0 
Maximum number of Quebec resident employees in entities on behalf of which the class action is pursued
 
 
 
50