AGNICO EAGLE MINES LTD, 6-K filed on 11/5/2012
Report of Foreign Issuer
Document and Entity Information
9 Months Ended
Sep. 30, 2012
Document and Entity Information
 
Entity Registrant Name
AGNICO EAGLE MINES LTD 
Entity Central Index Key
0000002809 
Document Type
6-K 
Document Period End Date
Sep. 30, 2012 
Amendment Flag
false 
Current Fiscal Year End Date
--12-31 
Entity Current Reporting Status
Yes 
Entity Filer Category
Large Accelerated Filer 
Document Fiscal Year Focus
2012 
Document Fiscal Period Focus
Q3 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Dec. 31, 2011
Current
 
 
Cash and cash equivalents
$ 274,442 
$ 179,447 
Short-term investments
9,488 
6,570 
Restricted cash
36,877 
35,441 
Trade receivables
77,044 
75,899 
Inventories:
 
 
Ore stockpiles
66,390 
28,155 
Concentrates and dore bars
67,656 
57,528 
Supplies
227,095 
182,389 
Income taxes recoverable
 
371 
Available-for-sale securities (note 7)
92,150 
145,411 
Fair value of derivative financial instruments (note 9)
3,613 
 
Other current assets
99,227 
110,369 
Total current assets
953,982 
821,580 
Other assets
49,458 
88,048 
Goodwill
229,279 
229,279 
Property, plant and mine development
3,985,906 
3,895,355 
TOTAL ASSETS
5,218,625 
5,034,262 
Current
 
 
Accounts payable and accrued liabilities
232,673 
203,547 
Environmental remediation liability (note 12)
9,275 
26,069 
Interest payable
20,982 
9,356 
Income taxes payable
20,806 
 
Capital lease obligations
12,225 
11,068 
Fair value of derivative financial instruments (note 9)
 
4,404 
Total current liabilities
295,961 
254,444 
Long-term debt (note 8)
800,000 
920,095 
Reclamation provision and other liabilities
145,485 
145,988 
Deferred income and mining tax liabilities
587,127 
498,572 
SHAREHOLDERS' EQUITY
 
 
Common shares (note 5) Outstanding - 171,812,793 common shares issued, less 233,860 shares held in trust
3,213,756 
3,181,381 
Stock options (note 6)
144,130 
117,694 
Warrants
24,858 
24,858 
Contributed surplus
15,665 
15,166 
Deficit
(3,450)
(129,021)
Accumulated other comprehensive loss
(4,907)
(7,106)
Total common shareholders' equity
3,390,052 
3,202,972 
Non-controlling interest
 
12,191 
Total shareholders' equity
3,390,052 
3,215,163 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 5,218,625 
$ 5,034,262 
CONSOLIDATED BALANCE SHEETS (Parenthetical)
Sep. 30, 2012
CONSOLIDATED BALANCE SHEETS
 
Common shares, issued
171,812,793 
Treasury shares, held in trust
233,860 
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
REVENUES
 
 
 
 
Revenues from mining operations
$ 535,836 
$ 520,537 
$ 1,468,331 
$ 1,366,296 
COSTS, EXPENSES AND OTHER INCOME
 
 
 
 
Production
220,408 
237,190 
655,349 
648,511 
Exploration and corporate development
36,023 
9,610 
93,417 
43,877 
Environmental remediation
4,066 
 
4,066 
 
Amortization of property, plant and mine development
68,318 
67,104 
199,181 
188,268 
General and administrative
25,416 
20,410 
91,359 
79,684 
Impairment loss on available-for-sale securities
600 
3,402 
12,181 
3,402 
Provincial capital tax
 
 
4,001 
 
Interest expense
14,933 
14,918 
43,600 
42,915 
Interest and sundry (income) expense
(866)
46 
(1,112)
22 
(Gain) loss on derivative financial instruments
(1,674)
1,678 
1,752 
(654)
Loss (gain) on sale of available-for-sale securities (note 7)
 
 
6,731 
(4,814)
Loss on Goldex mine
 
298,183 
 
298,183 
Foreign currency translation loss (gain)
16,265 
(21,420)
20,773 
(4,642)
Income (loss) before income and mining taxes
152,347 
(110,584)
337,033 
71,544 
Income and mining taxes
46,021 
(28,970)
108,887 
39,069 
Net income (loss) for the period
106,326 
(81,614)
228,146 
32,475 
Net income (loss) per share - basic (note 5) (in dollars per share)
$ 0.62 
$ (0.48)
$ 1.33 
$ 0.19 
Net income (loss) per share - diluted (note 5) (in dollars per share)
$ 0.62 
$ (0.48)
$ 1.33 
$ 0.19 
Cash dividends declared per common share (in dollars per share)
$ 0.20 
 
$ 0.60 
 
COMPREHENSIVE INCOME (LOSS)
 
 
 
 
Net income (loss) for the period
106,326 
(81,614)
228,146 
32,475 
Other comprehensive income (loss):
 
 
 
 
Unrealized gain (loss) on derivative financial instrument activities
5,993 
(15,994)
7,727 
(15,994)
Adjustments for derivative financial instruments settled during the period
(1,255)
 
(1,238)
 
Unrealized gain (loss) on available-for-sale securities
14,925 
(36,226)
(22,152)
(32,651)
Adjustments for realized loss (gain) on available-for-sale securities due to dispositions and impairments during the period
600 
3,402 
18,912 
(1,412)
Change in unrealized (loss) gain on pension liability
(345)
110 
1,258 
330 
Tax effect of other comprehensive (loss) income items
(1,158)
4,190 
(2,308)
4,145 
Other comprehensive gain (loss) for the period
18,760 
(44,518)
2,199 
(45,582)
Comprehensive income (loss) for the period
$ 125,086 
$ (126,132)
$ 230,345 
$ (13,107)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Common Shares
Stock Options
Warrants
Contributed Surplus
Retained Earnings (Deficit)
Accumulated Other Comprehensive Income (Loss)
Non-controlling Interest
Balance at Dec. 31, 2010
 
$ 3,078,217 
$ 78,554 
$ 24,858 
$ 15,166 
$ 440,265 
$ 28,390 
 
Common shares outstanding, beginning of period (in shares) at Dec. 31, 2010
 
168,720,355 
 
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
 
Shares issued under employee stock option plan
 
16,972 
(3,436)
 
 
 
 
 
Shares issued under employee stock option plan (in shares)
 
306,688 
 
 
 
 
 
 
Stock options
 
 
35,009 
 
 
 
 
 
Shares issued under the incentive share purchase plan
 
14,238 
 
 
 
 
 
 
Shares issued under the incentive share purchase plan (in shares)
 
223,191 
 
 
 
 
 
 
Shares issued under the Company's dividend reinvestment plan
 
8,494 
 
 
 
 
 
 
Shares issued under the Company's dividend reinvestment plan (in shares)
 
134,990 
 
 
 
 
 
 
Net income for the period
 
 
 
 
 
32,475 
 
 
Other comprehensive gain (loss) for the period
(45,582)
 
 
 
 
 
(45,582)
 
Restricted share unit plan
 
(854)
 
 
 
 
 
 
Restricted share unit plan (in shares)
 
(7,251)
 
 
 
 
 
 
Balance at Sep. 30, 2011
 
3,117,067 
110,127 
24,858 
15,166 
472,740 
(17,192)
 
Common shares outstanding, end of period (in shares) at Sep. 30, 2011
 
169,377,973 
 
 
 
 
 
 
Balance at Dec. 31, 2011
3,215,163 
3,181,381 
117,694 
24,858 
15,166 
(129,021)
(7,106)
12,191 
Common shares outstanding, beginning of period (in shares) at Dec. 31, 2011
 
170,813,736 
 
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
 
Shares issued under employee stock option plan
 
6,402 
(1,157)
 
 
 
 
 
Shares issued under employee stock option plan (in shares)
 
140,475 
 
 
 
 
 
 
Stock options
 
 
27,593 
 
 
 
 
 
Shares issued under the incentive share purchase plan
 
16,024 
 
 
 
 
 
 
Shares issued under the incentive share purchase plan (in shares)
 
396,614 
 
 
 
 
 
 
Shares issued under the Company's dividend reinvestment plan
 
13,857 
 
 
 
 
 
 
Shares issued under the Company's dividend reinvestment plan (in shares)
 
347,159 
 
 
 
 
 
 
Shares issued for purchase of mining property
 
2,447 
 
 
499 
 
 
 
Shares issued for purchase of mining property (in shares)
 
68,941 
 
 
 
 
 
 
Non-controlling interest eliminated upon acquisition
 
 
 
 
 
 
 
(12,191)
Net income for the period
 
 
 
 
 
228,146 
 
 
Dividends declared ($0.60 per share)
 
 
 
 
 
(102,575)
 
 
Other comprehensive gain (loss) for the period
2,199 
 
 
 
 
 
2,199 
 
Restricted share unit plan
 
(6,355)
 
 
 
 
 
 
Restricted share unit plan (in shares)
 
(187,992)
 
 
 
 
 
 
Balance at Sep. 30, 2012
$ 3,390,052 
$ 3,213,756 
$ 144,130 
$ 24,858 
$ 15,665 
$ (3,450)
$ (4,907)
 
Common shares outstanding, end of period (in shares) at Sep. 30, 2012
 
171,578,933 
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2012
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 
 
Dividends declared (in dollars per share)
$ 0.20 
$ 0.60 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Operating activities
 
 
 
 
Net income (loss) for the period
$ 106,326 
$ (81,614)
$ 228,146 
$ 32,475 
Add (deduct) items not affecting cash:
 
 
 
 
Amortization of property, plant and mine development
68,318 
67,104 
199,181 
188,268 
Deferred income and mining taxes
21,398 
(73,348)
46,787 
(47,434)
Loss on Goldex mine
 
298,183 
 
298,183 
(Gain) loss on available-for-sale securities and derivative financial instruments
(2,424)
6,865 
20,820 
(97)
Stock-based compensation
10,630 
10,183 
37,698 
41,674 
Foreign currency translation loss (gain)
16,265 
(21,420)
20,773 
(4,642)
Other
6,836 
7,572 
9,514 
17,464 
Adjustment for settlement of environmental remediation
(3,476)
 
(15,767)
 
Changes in non-cash working capital balances:
 
 
 
 
Trade receivables
(1,152)
(13,958)
(1,145)
34,170 
Income taxes (payable) recoverable
(891)
6,971 
42,991 
(5,536)
Inventories
(53,210)
(12,631)
(50,956)
(66,893)
Other current assets
1,898 
(23,567)
11,753 
(28,626)
Accounts payable and accrued liabilities
17,265 
17,183 
28,622 
66,039 
Interest payable
11,681 
10,047 
11,626 
10,112 
Cash provided by operating activities
199,464 
197,570 
590,043 
535,157 
Investing activities
 
 
 
 
Additions to property, plant and mine development
(113,344)
(164,003)
(293,707)
(375,254)
Acquisition of Grayd Resource Corporation (note 13)
 
 
(9,322)
 
(Increase) decrease in short-term investments
(6,480)
(481)
(2,918)
3,624 
Net proceeds on available-for-sale securities and other
 
 
30,732 
9,330 
Purchase of available-for-sale securities
(710)
(83,533)
(2,713)
(90,818)
(Increase) decrease in restricted cash
(1,303)
245 
(1,436)
(784)
Cash used in investing activities
(121,837)
(247,772)
(279,364)
(453,902)
Financing activities
 
 
 
 
Dividends paid
(27,992)
(23,571)
(88,790)
(72,704)
Repayment of capital lease obligations
(2,933)
(2,564)
(8,789)
(9,803)
Proceeds from long-term debt
 
125,000 
255,000 
205,000 
Repayment of long-term debt
(230,000)
(75,000)
(575,000)
(205,000)
Notes issuance
200,000 
 
200,000 
 
Long-term debt financing costs
(2,806)
(2,494)
(3,133)
(2,494)
Repurchase of common shares for restricted share unit plan
 
 
(12,031)
(3,723)
Common shares issued
8,325 
7,735 
16,001 
23,085 
Cash (used in) provided by financing activities
(55,406)
29,106 
(216,742)
(65,639)
Effect of exchange rate changes on cash and cash equivalents
1,751 
(1,429)
1,058 
(751)
Net increase (decrease) in cash and cash equivalents during the period
23,972 
(22,525)
94,995 
14,865 
Cash and cash equivalents, beginning of period
250,470 
132,950 
179,447 
95,560 
Cash and cash equivalents, end of period
274,442 
110,425 
274,442 
110,425 
Supplemental cash flow information
 
 
 
 
Interest paid
2,344 
5,439 
30,324 
31,743 
Income and mining taxes paid
$ 21,398 
$ 39,720 
$ 26,989 
$ 89,476 
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 ("US GAAP") in US dollars. They do not include all of the disclosures required by US GAAP for annual financial statements. Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the fiscal 2011 audited annual consolidated financial statements, including the accounting policies and notes thereto, included in the Annual Report and Annual Information Form/Form 20-F for the year ended December 31, 2011. 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, 2012 and the results of operations and cash flows for the three and nine months ended September 30, 2012 and September 30, 2011.

    Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2012.

USE OF ESTIMATES
USE OF ESTIMATES

2.     USE OF ESTIMATES

  • The preparation of the interim consolidated financial statements in conformity with US 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, 2011 audited annual consolidated financial statements except for the recently adopted accounting pronouncements discussed below.

    Recently Adopted Accounting Pronouncements

    Fair Value Accounting

    In May 2011, Accounting Standards Codification ("ASC") guidance was issued related to disclosures around fair value accounting. The updated guidance clarifies different components of fair value accounting including the application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity's shareholders' equity and disclosing quantitative information about the unobservable inputs used in fair value measurements that are categorized in Level 3 of the fair value hierarchy. Adoption of this updated guidance, effective for the Company's fiscal year beginning January 1, 2012, had no impact on the Company's financial position, results of operations or cash flows.

    Comprehensive Income

    In June 2011, ASC guidance was issued related to comprehensive income. Under the updated guidance, an entity will have the option to present the total of comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, the update requires certain disclosure requirements when reporting other comprehensive income. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income must be reclassified to income. In December 2011, updated guidance was issued to defer the effective date pertaining to reclassification adjustments out of accumulated other comprehensive income until the Financial Accounting Standards Board ("FASB") is able to reconsider those paragraphs. Adoption of the portion of this updated guidance effective for the Company's fiscal year beginning January 1, 2012 had no impact on the Company's financial position, results of operations or cash flows.

    Goodwill Impairment

    In September 2011, ASC guidance was issued related to testing goodwill for impairment. Under the updated guidance, entities are permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test per Topic 350. Previous guidance required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit is less than its carrying amount, then the second step of the test would be performed to measure the amount of the impairment loss, if any. An entity is no longer required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. Adoption of this updated guidance, effective for the Company's fiscal year beginning January 1, 2012, had no impact on the Company's financial position, results of operations or cash flows.

    Recently Issued Accounting Pronouncements and Developments

    Disclosures about Offsetting Assets and Liabilities

    In November 2011, ASC guidance was issued related to disclosures around offsetting financial instrument and derivative instrument assets and liabilities. Under the updated guidance, entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statements of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The update is effective for the Company's fiscal year beginning January 1, 2013. Agnico-Eagle is evaluating the potential impact of adopting this guidance on the Company's consolidated financial position, results of operations and cash flows.

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. The three levels of the fair value hierarchy under the Fair Value Measurements and Disclosure Topic of the FASB Accounting Standards Codification are as follows:

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

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

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

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

    The following table summarizes the Company's financial assets measured at fair value as at September 30, 2012 within the fair value hierarchy:

   
  Total   Level 1   Level 2   Level 3  
 

Financial assets:

                         
 

Cash equivalents and short-term investments(i)

  $ 11,473   $   $ 11,473   $  
 

Available-for-sale securities(ii)

    92,150     92,150          
 

Trade receivables(iii)

    77,044         77,044      
 

Fair value of derivative financial instruments(iv)

    3,613         3,613      
                     
 

 

  $ 184,280   $ 92,150   $ 92,130   $  
                     

  • (i)
    Fair value approximates the carrying amounts of cash equivalents and short-term investments due to their short-term nature (classified within Level 2 of the fair value hierarchy).

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

    (iii)
    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).

    (iv)
    Derivative financial instruments are recorded at fair value using external broker-dealer quotations (classified within Level 2 of the fair value hierarchy).
  • Both the Company's cash equivalents and short-term investments are classified within Level 2 of the fair value hierarchy because they are held to maturity and 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 greater than three months at the date of purchase.

    The Company's available-for-sale securities that are recorded at fair value using quoted market prices are classified as Level 1 of the fair value hierarchy.

    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 statements of income (loss) and comprehensive income (loss) 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 first quarter of 2009, the Company implemented a restricted share unit ("RSU") plan for certain employees. Effective January 1, 2012 the RSU plan was amended to include Directors and Senior Executives of Agnico-Eagle. 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 of two to three years.

    During the first quarter of 2012, the Company funded the RSU plan by transferring $12.0 million (2011 — $3.7 million) to an employee benefit trust (the "Trust") that then purchased shares of the Company in the open market. The Trust is funded once per year during the first quarter of each year. Compensation cost for the RSU plan incorporates an expected forfeiture rate. The forfeiture rate is estimated based on the Company's historical employee turnover rates and expectations of future forfeiture rates that incorporate various factors that include historical employee stock option plan forfeiture rates. For the years 2009 through 2012, the impact of forfeitures was not material. For accounting purposes, the Trust is treated as a variable interest entity and consolidated in the accounts of the Company. On consolidation, the dividends paid on the shares held by the Trust are eliminated. The shares purchased and held by the Trust are treated as not outstanding for the basic earnings per share ("EPS") calculations. They are included in the basic EPS calculations once they have vested. All of the unvested shares held by the Trust are included in the diluted EPS calculations.

    The following table summarizes the maximum number of common shares that would be outstanding if all instruments outstanding at September 30, 2012 were exercised:

 

Common shares outstanding at September 30, 2012

    171,578,933  
 

Employees' stock options

    10,867,426  
 

Warrants

    8,600,000  
 

Restricted share unit plan

    233,860  
         
 

 

    191,280,219  
         
  • During the nine months ended September 30, 2012, 3,257,000 (2011 — 2,620,785) options were granted with a weighted average exercise price of C$36.99 (2011 — C$76.24), 140,475 (2011 — 306,688) employee stock options were exercised for cash of $5.2 million (2011 — $13.5 million), 726,500 (2011 — 112,000) options were forfeited with a weighted average exercise price of C$59.80 (2011 — C$69.08) and 481,650 (2011 — 4,250) options expired with a weighted average exercise price of C$47.49 (2011 — C$23.02).

    During the three months ended September 30, 2012, 6,000 (2011 — 27,000) options were granted with a weighted average exercise price of C$43.39 (2011 — C$55.25), 125,225 (2011 — 89,300) employee stock options were exercised for cash of $4.6 million (2011 — $4.6 million), 605,750 (2011 — 24,500) options were forfeited with a weighted average exercise price of C$59.69 (2011 — C$69.37) and nil (2011 — nil) options expired with a weighted average exercise price of nil (2011 — nil).

    The following table summarizes 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,  
   
  2012   2011   2012   2011  
 

Net income (loss) for the period

  $ 106,326   $ (81,614 ) $ 228,146   $ 32,475  
                     
 

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

    171,341     169,238     171,055     169,055  
 

Add: Dilutive impact of employee stock options

                1,094  
 

          Dilutive impact of warrants

                2,447  
 

          Dilutive impact of shares related to RSU plan

    255         242     50  
                     
 

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

    171,596     169,238     171,297     172,646  
                     
 

Net income (loss) per share — basic

  $ 0.62   $ (0.48 ) $ 1.33   $ 0.19  
                     
 

Net income (loss) per share — diluted

  $ 0.62   $ (0.48 ) $ 1.33   $ 0.19  
                     
  • The calculation of diluted net income per share has been computed using the treasury stock method.

    For the three and nine months ended September 30, 2012, all employee stock options and warrants were excluded from the computation of diluted weighted average common shares because their effect would have been anti-dilutive.

    For the three months ended September 30, 2011, all employee stock options, warrants and shares related to the RSU plan were excluded from the computation of diluted weighted average common shares because their effect would have been anti-dilutive. For the nine months ended September 30, 2011, there were 738,321 employee stock options excluded from the computation of diluted weighted average common shares because their effect would have been anti-dilutive.

STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

6.     STOCK-BASED COMPENSATION

  • The following continuity summarizes activity with respect to the Company's outstanding stock options:

   
  Nine Months Ended
September 30, 2012
 
   
  Number of Options   Weighted average
exercise price
 
 

Outstanding, beginning of period

    8,959,051   C$ 62.88  
 

Granted

    3,257,000     36.99  
 

Exercised

    (140,475 )   37.04  
 

Forfeited

    (726,500 )   59.80  
 

Expired

    (481,650 )   47.49  
             
 

Outstanding, end of period

    10,867,426   C$ 56.35  
             
 

Options exercisable at end of period

    6,780,014   C$ 59.34  
             
  • For the nine months ended September 30, 2012 and September 30, 2011, the Company estimated the fair value of options under the Black-Scholes option pricing model using the following weighted average assumptions:

   
  Nine Months Ended
September 30,
 
   
  2012   2011  
 

Risk-free interest rate

    1.25%     1.95%  
 

Expected life of options (in years)

    2.8     2.5  
 

Expected volatility of Agnico-Eagle's share price

    37.52%     34.63%  
 

Expected dividend yield

    2.14%     0.89%  
AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES

7.     AVAILABLE-FOR-SALE SECURITIES

  • During the three months ended September 30, 2012 and the three months ended September 30, 2011, the Company did not dispose of any available-for-sale securities.

    During the nine months ended September 30, 2012, the Company received proceeds of $30.7 million (2011 — $9.3 million) and recognized a loss before income taxes of $6.7 million (2011 — $4.8 million gain) on the sale of certain available-for-sale securities.

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

   
  As at
September 30, 2012
  As at
December 31, 2011
 
 

Available-for-sale securities in an unrealized gain position

             
 

Cost (net of impairments)

  $ 78,272   $ 127,344  
 

Unrealized gains in accumulated other comprehensive gain (loss)

    13,219     16,408  
             
 

Estimated fair value

    91,491     143,752  
             
 

Available-for-sale securities in an unrealized loss position

             
 

Cost (net of impairments)

    709     1,717  
 

Unrealized losses in accumulated other comprehensive gain (loss)

    (50 )   (58 )
             
 

Estimated fair value

    659     1,659  
             
 

Total estimated fair value of available-for-sale securities

  $ 92,150   $ 145,411  
             
  • The Company's investments in available-for-sale securities consist primarily of investments in common shares of entities in the mining industry. During the three months ended September 30, 2012, certain investments 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 three months ended September 30, 2012, the Company recorded a $0.6 million (2011 — $3.4 million) impairment loss on certain available-for-sale securities that were determined to be other-than-temporarily impaired. During the nine months ended September 30, 2012, the Company recorded a $12.2 million (2011 — $3.4 million) impairment loss on certain available-for-sale securities that were determined to be other-than-temporarily impaired.

    At September 30, 2012, the fair value of investments in an unrealized loss position, after recording $0.6 million in other-than-temporary impairment losses, was $0.7 million. Based on an evaluation of the severity and duration of the impairment of these 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 investments to be other-than-temporarily impaired as at September 30, 2012.

LONG-TERM DEBT
LONG-TERM DEBT

8.     LONG-TERM DEBT

  • On July 24, 2012, the Company closed a private placement consisting of $200.0 million of guaranteed senior unsecured notes due in 2022 and 2024 (the "2012 Notes") with a weighted average maturity of 11.0 years and weighted average yield of 4.95%. The 2012 Notes contain covenants that restrict, among other things, the ability of the Company to amalgamate or otherwise transfer its assets, sell material assets and carry on a business other than one related to the mining business and the ability of material and certain other subsidiaries of the Company to incur indebtedness. The 2012 Notes are permissible debt under the Credit Facility.

    On July 20, 2012, the Company amended and restated its Credit Facility. The total amount available under the Credit Facility remains unchanged at $1.2 billion; however, the maturity date was extended from June 22, 2016 to June 22, 2017. Pricing terms were amended to reflect improved current market conditions. The Credit Facility contains covenants that restrict, among other things, the ability of the Company to incur additional indebtedness, make distributions in certain circumstances, sell material assets and carry on a business other than one related to the mining business. The Company is also required to maintain a total net debt to EBITDA ratio below a specified maximum value as well as a minimum tangible net worth. During the three months ended September 30, 2012, the Company repaid the full $230.0 million outstanding balance on the Credit Facility (2011 — drew down $50.0 million, net). At September 30, 2012, the Credit Facility was drawn down by nil (December 31, 2011 — $320.0 million).

    On April 7, 2010, the Company closed a private placement consisting of $600.0 million of guaranteed senior unsecured notes due in 2017, 2020 and 2022 with a weighted average maturity of 9.84 years and weighted average yield of 6.59%. The 2010 Notes contain covenants that restrict, among other things, the ability of the Company to amalgamate or otherwise transfer its assets, sell material assets and carry on a business other than one related to the mining business and the ability of material and certain other subsidiaries of the Company to incur indebtedness.

    The 2012 Notes and 2010 Notes also require the Company to maintain the same financial ratio and minimum tangible net worth covenants as specified by the Credit Facility. The Company was in compliance with all covenants contained within the 2012 Notes, the Credit Facility and the 2010 Notes as at September 30, 2012.

    Total long-term debt interest costs incurred during the three and nine months ended September 30, 2012 were $12.3 million (2011 — $10.7 million) and $34.7 million (2011 — $31.0 million), respectively. Total interest costs capitalized to property, plant and mine development for the three and nine months ended September 30, 2012 were $0.3 million (2011 — $0.6 million) and $0.8 million (2011 — $0.8 million), respectively. The total outstanding long-term debt balance of $800.0 million as at September 30, 2012 is comprised of the $600.0 million 2010 Notes and the $200.0 million 2012 Notes.

FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS

9.     FINANCIAL INSTRUMENTS

  • Currency Risk Management

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

    As at September 30, 2012, forward contracts with a cash flow hedging relationship that did qualify for hedge accounting under ASC 815 — Derivatives and Hedging, hedged $75.0 million of 2012 expenditures. $25.0 million will expire each month during 2012 at an average rate of US$1.00 = C$1.01. As at September 30, 2011, forward contracts with a cash flow hedging relationship that did qualify for hedge accounting under ASC 815 — Derivatives and Hedging, hedged $60.0 million of 2011 expenditures and $240.0 million of 2012 expenditures. $20.0 million will expire under the contract each month during 2011 and 2012 at an average rate of US$1.00 = C$0.99. The effective hedges that expired for the three and nine months ended September 30, 2012 resulted in a net realized gain of $1.3 million and $1.2 million, respectively. No effective hedges expired for the three and nine months ended September 30, 2011. As of September 30, 2012, the Company recognized a mark-to-market gain of $2.3 million (2011 — $16.0 million loss) in Accumulated other comprehensive loss ("AOCL"). Amounts deferred in AOCL are reclassified to Production costs, as applicable, when the derivative financial instrument has settled.

    In March 2011, the Company entered into a foreign exchange forward contract at a rate of US$1.00 = C$0.99 with an ineffective cash flow hedging relationship that did not qualify for hedge accounting. There were no forward contracts with ineffective cash flow hedging relationships purchased or outstanding during the three and nine months ended September 30, 2012. The risk hedged in 2011 was the variability in expected future cash flows arising from changes in foreign currency exchange. The hedged items represented a portion of the unhedged forecasted Canadian dollar denominated cash outflows arising from Canadian dollar denominated expenditures in 2011. In 2011, the forward contract hedged $90.0 million of 2011 expenditures. $10.0 million was scheduled to expire each month starting in April 2011 and the contract was to be completely expired by December 31, 2011. The ineffective hedges that expired during the three and nine months ended September 30, 2011 resulted in a realized loss of $0.4 million and a realized gain of $0.4 million, respectively. As of September 30, 2011, the Company recognized a mark-to-market loss of $4.3 million in the (Gain) loss on derivative financial instruments line item of the interim consolidated statements of income (loss) and comprehensive income (loss).

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

    The Company's other foreign currency derivative strategies in 2012 and 2011 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 September 30, 2012 or September 30, 2011. For the three and nine months ended September 30, 2012, the Company's foreign currency derivative financial instruments generated $0.2 million and $1.3 million, respectively, (2011 — $1.4 million and $3.9 million, respectively) in call option premiums that were recognized in the (Gain) loss on derivative financial instruments line item of the interim consolidated statements of income (loss) and comprehensive income (loss).

    Commodity Price Risk Management

    During the three and nine months ended September 30, 2012, the Company recorded intra-quarter zinc derivative financial instruments realized gains of nil and $0.5 million, respectively, (2011 — $0.8 million and $1.0 million, respectively) that were recognized in the (Gain) loss on derivative financial instruments line item of the interim consolidated statements of income (loss) and comprehensive income (loss). There were no intra-quarter zinc derivative financial instruments outstanding at September 30, 2012 and no intra-quarter zinc derivative financial instruments were purchased during the three and nine months ended September 30, 2011.

    In the first quarter of 2011, to mitigate the risks associated with fluctuating zinc prices, the Company entered into a zero-cost collar to hedge the price on a portion of zinc associated with the LaRonde mine's 2011 production. The purchase of zinc put options was financed through selling zinc call options at a higher level such that the net premium payable to the counterparty by the Company was nil. All zinc financial instruments expired or were realized in 2011. There were no zinc zero-cost collars purchased or outstanding during the three or nine months ended September 30, 2012.

    In 2011, a total of 20,000 metric tonnes of zinc call options were written at a strike price of $2,500 per metric tonne with 2,000 metric tonnes expiring each month beginning February 28, 2011. A total of 20,000 metric tonnes of zinc put options were purchased at a strike price of $2,200 per metric tonne with 2,000 metric tonnes expiring each month beginning February 28, 2011. 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. Gains or losses, along with mark-to-market adjustments were recognized in the (Gain) loss on derivative financial instruments line item of the interim consolidated statements of income (loss) and comprehensive income (loss). The options that expired during the three months ended September 30, 2011 resulted in a realized gain of $0.8 million. As at September 30, 2011, the Company recorded an unrealized mark-to-market gain of $3.0 million relating to zinc derivative financial instruments.

    The Company recognized a gain of nil on intra-quarter silver derivative financial instruments associated with timing of sales of silver products during the three and nine months ended September 30, 2012 (2011 — losses of nil and $3.4 million, respectively) that were recognized in the (Gain) loss on derivative financial instruments line item of the interim consolidated statements of income (loss) and comprehensive income (loss). There were no silver financial instruments purchased or outstanding during the three and nine months ended September 30, 2012.

    In the second quarter of 2012, to mitigate the risks associated with fluctuating diesel fuel prices, the Company entered into financial contracts to hedge the price on a portion of diesel fuel costs associated with the Meadowbank mine's diesel fuel exposure as it relates to operating costs. Financial contracts expiring in 2012 and totaling 9.5 million gallons of heating oil were entered into at an average price of $2.97 per gallon, which is approximately 55% of Meadowbank's expected 2012 diesel fuel exposure. In addition, financial contracts expiring in 2013 and totaling 0.5 million gallons of heating oil were entered into at an average price of $2.45 per gallon, which is approximately 3% of Meadowbank's expected 2013 diesel fuel exposure. The contracts that expired during the 3 months ended September 30, 2012 did not qualify for hedge accounting and the related realized loss of $1.5 million was recognized in the (Gain) loss on derivative financial instruments line item of the interim consolidated statements of income (loss) and comprehensive income (loss). The contracts expiring in 2013 did qualify for hedge accounting and the related $0.1 million market-to-market gain as at September 30, 2012 was recognized in AOCL. No heating oil financial contracts expired during the first six months ended June 30, 2012 and no similar derivative financial instruments existed for the Company in 2011. Amounts deferred in AOCL are reclassified to Production costs, as applicable, when the derivative financial instrument has settled. Mark-to-market gains (losses) related to heating oil derivative financial instruments are based on broker-dealer quotations that utilize period end forward pricing to calculate fair value.

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

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

   
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
   
  2012   2011   2012   2011  
 

Accumulated other comprehensive loss, beginning of period

  $ (2,653 ) $   $ (4,404 ) $  
 

Adjustments for derivative financial instruments settled during the period(i)

    (1,255 )       (1,238 )    
 

Other comprehensive gain (loss) — foreign exchange derivative financial instruments

    5,897     (15,994 )   7,979     (15,994 )
 

Other comprehensive gain — heating oil derivative financial instruments

    89         135      
 

Other comprehensive loss — other derivative financial instruments

    7         (387 )    
                     
 

Accumulated other comprehensive income, end of period

  $ 2,085   $ (15,994 ) $ 2,085   $ (15,994 )
                     

  • (i)
    Amounts deferred in AOCL, are reclassified to Production costs, as applicable, when the derivative financial instrument has settled.
  • The following table summarizes the amounts recognized in the (Gain) loss on derivative financial instruments line item of the interim consolidated statements of income (loss) and comprehensive income (loss):

   
  Three Months
Ended
September 30,
  Nine Months
Ended
September 30,
 
   
  2012   2011   2012   2011  
 

Premiums realized on written foreign exchange call options

  $ (227 ) $ (1,349 ) $ (1,254 ) $ (3,898 )
 

Realized (gain) loss on derivative financial instruments settled during the period

        435         (444 )
 

Mark-to-market loss on foreign exchange derivative financial instruments

        5,704         4,271  
 

Realized gain on zinc derivative financial instruments

        (845 )   (476 )   (994 )
 

Mark-to-market gain on zinc derivative financial instruments

        (2,267 )       (2,992 )
 

Realized loss on silver derivative financial instruments

                3,403  
 

(Gain) loss on heating oil derivative financial instruments and other

    (1,447 )       3,482      
                     
 

(Gain) loss on derivative financial instruments

  $ (1,674 ) $ 1,678   $ 1,752   $ (654 )
                     
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES

10.   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 September 30, 2012, the total amount of these guarantees was $136.0 million.

SEGMENTED INFORMATION
SEGMENTED INFORMATION

11.   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. The following are the reportable segments of the Company and reflect how the Company manages its business and how it classifies its operations for planning and measuring performance:

 

Canada:

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

Europe:

  Kittila mine
 

Latin America:

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

Exploration:

  USA Exploration office, Europe Exploration office, Canada Exploration offices, and the Latin America Exploration office
  • The accounting policies of the reportable segments are the same as those described in the accounting policies note. There are no transactions between the reportable segments affecting revenue. Production costs for the reportable segments are net of intercompany transactions. Of the $229.3 million of goodwill reflected on the interim consolidated balance sheets at September 30, 2012, $200.1 million relates to the Meliadine project that is a component of the Canada segment and $29.2 million relates to the La India project that is a component of the Latin America segment.

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

    The Creston Mascota deposit at Pinos Altos achieved commercial production on March 1, 2011. The LaRonde mine extension achieved commercial production on December 1, 2011.

 
Three Months Ended
September 30, 2012
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization of
Property, Plant
and Mine
Development
  Exploration and
Corporate
Development
  Foreign
Currency
Translation
Loss
  Segment
Income
(Loss)
 
 

Canada

  $ 336,011   $ 160,405   $ 51,656   $ 11,947   $ 11,215   $ 100,788  
 

Europe

    75,741     23,086     7,846         561     44,248  
 

Latin America

    124,084     36,917     8,816         4,177     74,174  
 

Exploration

                24,076     312     (24,388 )
                             
 

 

  $ 535,836   $ 220,408   $ 68,318   $ 36,023   $ 16,265   $ 194,822  
                             
 

Segment income

  $ 194,822  
 

Corporate and Other:

                                     
 

    Interest and sundry income

    866  
 

    Impairment loss on available-for-sale securities

    (600 )
 

    Environmental remediation

    (4,066 )
 

    Gain on derivative financial instruments

    1,674  
 

    General and administrative

    (25,416 )
 

    Interest expense

    (14,933 )
                                       
 

Income before income and mining taxes

  $ 152,347  
                                       

 

 
Three Months Ended September 30, 2011
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization of
Property, Plant
and Mine
Development
  Exploration and
Corporate
Development
  Foreign
Currency
Translation
Gain
  Loss on
Goldex
mine
  Segment
Income
(Loss)
 
 

Canada

  $ 352,514   $ 169,243   $ 50,133   $   $ (12,581 ) $ 298,183   $ (152,464 )
 

Europe

    62,165     27,648     6,939         (2,355 )       29,933  
 

Latin America

    105,858     40,299     10,032         (5,770 )       61,297  
 

Exploration

                9,610     (714 )       (8,896 )
                                 
 

 

  $ 520,537   $ 237,190   $ 67,104   $ 9,610   $ (21,420 ) $ 298,183   $ (70,130 )
                                 
 

Segment loss

  $ (70,130 )
 

Corporate and Other:

                                           
 

    Interest and sundry expense

    (46 )
 

    Impairment loss on available-for-sale securities

    (3,402 )
 

    Loss on derivative financial instruments

    (1,678 )
 

    General and administrative

    (20,410 )
 

    Interest expense

    (14,918 )
                                             
 

Loss before income and mining taxes

  $ (110,584 )
                                             

 

 
Nine Months Ended
September 30, 2012
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization of
Property, Plant
and Mine
Development
  Exploration and
Corporate
Development
  Foreign
Currency
Translation Loss
  Segment Income
(Loss)
 
 

Canada

  $ 913,421   $ 469,821   $ 147,560   $ 35,910   $ 12,882   $ 247,248  
 

Europe

    205,824     72,631     22,297         1,777     109,119  
 

Latin America

    349,086     112,897     29,324         5,968     200,897  
 

Exploration

                57,507     146     (57,653 )
                             
 

 

  $ 1,468,331   $ 655,349   $ 199,181   $ 93,417   $ 20,773   $ 499,611  
                             
 

Segment income

  $ 499,611  
 

Corporate and Other:

                               
 

    Interest and sundry income

    1,112  
 

    Impairment loss on available-for-sale securities

    (12,181 )
 

    Environmental remediation

    (4,066 )
 

    Loss on sale of available-for-sale securities

    (6,731 )
 

    Loss on derivative financial instruments

    (1,752 )
 

    General and administrative

    (91,359 )
 

    Provincial capital tax

    (4,001 )
 

    Interest expense

    (43,600 )
                                       
 

Income before income and mining taxes

  $ 337,033  
                                       

 

 
Nine Months Ended
September 30, 2011
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization of
Property, Plant
and Mine
Development
  Exploration and
Corporate
Development
  Foreign
Currency
Translation
(Gain) Loss
  Loss on
Goldex
mine
  Segment
Income
(Loss)
 
 

Canada

  $ 928,228   $ 456,634   $ 143,104   $   $ (893 ) $ 298,183   $ 31,200  
 

Europe

    163,391     82,340     19,716         1,432         59,903  
 

Latin America

    274,677     109,537     25,448         (5,101 )       144,793  
 

Exploration

                43,877     (80 )       (43,797 )
                                 
 

 

  $ 1,366,296   $ 648,511   $ 188,268   $ 43,877   $ (4,642 ) $ 298,183   $ 192,099  
                                 
 

Segment income

  $ 192,099  
 

Corporate and Other:

                                     
 

    Interest and sundry expense

    (22 )
 

    Gain on sale of available-for-sale securities

    4,814  
 

    Impairment loss on available-for-sale securities

    (3,402 )
 

    Gain on derivative financial instruments

    654  
 

    General and administrative

    (79,684 )
 

    Interest expense

    (42,915 )
                                             
 

Income before income and mining taxes

  $ 71,544  
                                             

   
  Total Assets as at  
   
  September 30, 2012   December 31, 2011  
 

Canada

  $ 3,272,669   $ 3,205,158  
 

Europe

    851,294     771,714  
 

Latin America

    1,035,293     1,020,078  
 

Exploration

    59,369     37,312  
             
 

 

  $ 5,218,625   $ 5,034,262  
             
ENVIRONMENTAL REMEDIATION LIABILITY AND RECLAMATION PROVISION
ENVIRONMENTAL REMEDIATION LIABILITY AND RECLAMATION PROVISION

12.   ENVIRONMENTAL REMEDIATION LIABILITY AND RECLAMATION PROVISION

  • Due to the suspension of mining operations at the Goldex mine on October 19, 2011, an environmental remediation liability was recognized. During the three and nine months ended September 30, 2012, the Company incurred $3.5 million and $15.8 million, respectively, in remediation costs that were applied against the environmental remediation liability recognized in 2011. As at September 30, 2012, the remaining Goldex mine environmental remediation liability was $30.6 million, $9.3 million of which was classified as a current liability. The Company's other non-Goldex mine reclamation provisions are long-term in nature. The Goldex mine is part of the Canada segment as described in Note 11.

    In addition, during the three months ended September 30, 2012, the Company reviewed new information related to future remediation costs for certain other inactive mines and accrued $4.4 million in the Environmental remediation line item of the interim consolidated statements of income (loss) and comprehensive income (loss). Amounts accrued for these matters are reviewed periodically based upon facts and circumstances available at the time.

    The environmental remediation and asset retirement obligation liabilities for the anticipated costs of remediation associated with the Company's active and inactive mines requires management to make estimates and judgments that affect the reported amount. In making judgments in accordance with US GAAP, the Company uses estimates based on historical experience and various assumptions that are considered reasonable in the circumstances. Actual results may differ from these estimates.

ACQUISITIONS
ACQUISITIONS

13.   ACQUISITIONS

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

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

GENERAL AND ADMINISTRATIVE
GENERAL AND ADMINISTRATIVE

14.   GENERAL AND ADMINISTRATIVE

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

    During the subsequent months of 2011, the Company received $2.4 million of insurance proceeds and had a remaining insurance receivable of $8.8 million as at December 31, 2011 within the Other current assets line item of the interim consolidated balance sheets. During the first nine months of 2012, the Company received $2.3 million of insurance proceeds and had a remaining insurance receivable of $6.5 million as at September 30, 2012.

SUBSEQUENT EVENTS
SUBSEQUENT EVENTS

15.   SUBSEQUENT EVENTS

  • On October 24, 2012, Agnico-Eagle announced that the Board of Directors approved the payment of a quarterly cash dividend of $0.20 per common share, payable on December 17, 2012 to holders of record of the common shares of the Company on December 3, 2012.

SECURITIES CLASS ACTION LAWSUITS
SECURITIES CLASS ACTION LAWSUITS

16.   SECURITIES CLASS ACTION LAWSUITS

  • On November 7 and 22, 2011, the Company and certain current and former officers who also are, or were, directors were named as defendants in two putative class action lawsuits, styled Jerome Stone v. Agnico-Eagle Mines Ltd., et al., and Chris Hastings v. Agnico-Eagle Mines Limited, et al., which were filed in the United States District Court for the Southern District of New York. On February 6, 2012, the court entered an order consolidating the actions under the caption In re Agnico-Eagle Mines Ltd. Securities Litigation and appointed a lead plaintiff (not one of the plaintiffs who filed the original complaints). On April 6, 2012, the lead plaintiff served its Consolidated Complaint (the "Complaint"). The Complaint names the Company, its current chief executive officer and its former president and chief operating officer as defendants and purports to be brought on behalf of all persons and entities who purchased or otherwise acquired the Company's publicly traded securities in the United States or on a U.S. exchange during the period July 28, 2010 through October 19, 2011 (the "Class Period"). The Complaint alleges, among other things, that defendants violated U.S. securities laws by misrepresenting the Company's gold reserves and the status, ability to operate and projected production of its Goldex mine. The Complaint seeks, among other things, (i) a determination that the action is a proper class action and (ii) an award of unspecified damages, attorneys' fees and expenses. On June 6, 2012, the Company and the other defendants filed a motion, pursuant to the Private Securities Litigation Reform Act and Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the Consolidated Complaint, for failure to state a claim upon which relief could be granted. The plaintiff has delivered a Response to this motion to which the Company has delivered a Reply. A decision on the motion is expected prior to the end of 2012.

    On March 8, 2012 and April 10, 2012 a Notice of Action and Statement of Claim (collectively, the "Ontario Claim") were issued by William Leslie AFA Livforsakringsaktiebolag and certain other entities against the Company and certain of its current and former officers and directors. On September 27, 2012, the plaintiffs issued a Fresh as Amended Statement of Claim. The Fresh as Amended Statement of Claim alleges that the Company's public disclosure concerning water flow issues at its Goldex mine was misleading. The Ontario Claim was issued by the plaintiffs on behalf of all persons and entities who acquired securities of the Company during the period March 26, 2010 to October 19, 2011, excluding persons resident or domiciled in the Province of Quebec at the time they purchased or acquired such securities. The plaintiffs seek, among other things, damages of $250 million and to certify the Ontario Claim as a class action. The plaintiffs have brought motions for leave to commence an action under s. 138 of the Securities Act (Ontario) and to certify the action as a class action which are scheduled to be argued April 16-19, 2013. The Company intends to vigorously contest the motions and defend the Ontario Claim.

    On April 12, 2012 two senior officers of the Company were served with a Motion for Leave to Institute a Class Action and for the Appointment of a Representative Plaintiff (the "Motion"). The action is on behalf of all persons and entities who acquired securities of the Company between March 26, 2010 and October 19, 2011. The proposed Class Action is for damages of $100 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 Motion seeking leave to commence an action under the Securities Act (Quebec) in addition to seeking authorization to institute a class action. No date has been set for the hearing to argue the Motion. The Company intends to vigorously contest the Motion and defend the claim.

COMPARATIVE FIGURES
COMPARATIVE FIGURES

17.   COMPARATIVE FIGURES

  • Certain figures in the comparative consolidated financial statements have been reclassified from statements previously presented to conform to the presentation of the 2012 interim consolidated financial statements.

FAIR VALUE MEASUREMENT (Tables)
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(i)

  $ 11,473   $   $ 11,473   $  
 

Available-for-sale securities(ii)

    92,150     92,150          
 

Trade receivables(iii)

    77,044         77,044      
 

Fair value of derivative financial instruments(iv)

    3,613         3,613      
                     
 

 

  $ 184,280   $ 92,150   $ 92,130   $  
                     

  • (i)
    Fair value approximates the carrying amounts of cash equivalents and short-term investments due to their short-term nature (classified within Level 2 of the fair value hierarchy).

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

    (iii)
    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).

    (iv)
    Derivative financial instruments are recorded at fair value using external broker-dealer quotations (classified within Level 2 of the fair value hierarchy).
SHAREHOLDERS' EQUITY (Tables)
  •  

 

 

Common shares outstanding at September 30, 2012

    171,578,933  
 

Employees' stock options

    10,867,426  
 

Warrants

    8,600,000  
 

Restricted share unit plan

    233,860  
         
 

 

    191,280,219  
         
  •  

 

   
  Three months ended September 30,   Nine months ended September 30,  
   
  2012   2011   2012   2011  
 

Net income (loss) for the period

  $ 106,326   $ (81,614 ) $ 228,146   $ 32,475  
                     
 

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

    171,341     169,238     171,055     169,055  
 

Add: Dilutive impact of employee stock options

                1,094  
 

          Dilutive impact of warrants

                2,447  
 

          Dilutive impact of shares related to RSU plan

    255         242     50  
                     
 

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

    171,596     169,238     171,297     172,646  
                     
 

Net income (loss) per share — basic

  $ 0.62   $ (0.48 ) $ 1.33   $ 0.19  
                     
 

Net income (loss) per share — diluted

  $ 0.62   $ (0.48 ) $ 1.33   $ 0.19  
                     
STOCK-BASED COMPENSATION (Tables)
  •  

 

   
  Nine Months Ended
September 30, 2012
 
   
  Number of Options   Weighted average
exercise price
 
 

Outstanding, beginning of period

    8,959,051   C$ 62.88  
 

Granted

    3,257,000     36.99  
 

Exercised

    (140,475 )   37.04  
 

Forfeited

    (726,500 )   59.80  
 

Expired

    (481,650 )   47.49  
             
 

Outstanding, end of period

    10,867,426   C$ 56.35  
             
 

Options exercisable at end of period

    6,780,014   C$ 59.34  
             
  •  

 

   
  Nine Months Ended
September 30,
 
   
  2012   2011  
 

Risk-free interest rate

    1.25%     1.95%  
 

Expected life of options (in years)

    2.8     2.5  
 

Expected volatility of Agnico-Eagle's share price

    37.52%     34.63%  
 

Expected dividend yield

    2.14%     0.89%  
AVAILABLE-FOR-SALE SECURITIES (Tables)
Schedule of available-for-sale securities
  •  

 

   
  As at
September 30, 2012
  As at
December 31, 2011
 
 

Available-for-sale securities in an unrealized gain position

             
 

Cost (net of impairments)

  $ 78,272   $ 127,344  
 

Unrealized gains in accumulated other comprehensive gain (loss)

    13,219     16,408  
             
 

Estimated fair value

    91,491     143,752  
             
 

Available-for-sale securities in an unrealized loss position

             
 

Cost (net of impairments)

    709     1,717  
 

Unrealized losses in accumulated other comprehensive gain (loss)

    (50 )   (58 )
             
 

Estimated fair value

    659     1,659  
             
 

Total estimated fair value of available-for-sale securities

  $ 92,150   $ 145,411  
             
FINANCIAL INSTRUMENTS (Tables)
  •  

 

   
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
   
  2012   2011   2012   2011  
 

Accumulated other comprehensive loss, beginning of period

  $ (2,653 ) $   $ (4,404 ) $  
 

Adjustments for derivative financial instruments settled during the period(i)

    (1,255 )       (1,238 )    
 

Other comprehensive gain (loss) — foreign exchange derivative financial instruments

    5,897     (15,994 )   7,979     (15,994 )
 

Other comprehensive gain — heating oil derivative financial instruments

    89         135      
 

Other comprehensive loss — other derivative financial instruments

    7         (387 )    
                     
 

Accumulated other comprehensive income, end of period

  $ 2,085   $ (15,994 ) $ 2,085   $ (15,994 )
                     

  • (i)
    Amounts deferred in AOCL, are reclassified to Production costs, as applicable, when the derivative financial instrument has settled.
  •  

 

   
  Three Months
Ended
September 30,
  Nine Months
Ended
September 30,
 
   
  2012   2011   2012   2011  
 

Premiums realized on written foreign exchange call options

  $ (227 ) $ (1,349 ) $ (1,254 ) $ (3,898 )
 

Realized (gain) loss on derivative financial instruments settled during the period

        435         (444 )
 

Mark-to-market loss on foreign exchange derivative financial instruments

        5,704         4,271  
 

Realized gain on zinc derivative financial instruments

        (845 )   (476 )   (994 )
 

Mark-to-market gain on zinc derivative financial instruments

        (2,267 )       (2,992 )
 

Realized loss on silver derivative financial instruments

                3,403  
 

(Gain) loss on heating oil derivative financial instruments and other

    (1,447 )       3,482      
                     
 

(Gain) loss on derivative financial instruments

  $ (1,674 ) $ 1,678   $ 1,752   $ (654 )
                     

 

SEGMENTED INFORMATION (Tables)
  • .

 
Three Months Ended
September 30, 2012
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization of
Property, Plant
and Mine
Development
  Exploration and
Corporate
Development
  Foreign
Currency
Translation
Loss
  Segment
Income
(Loss)
 
 

Canada

  $ 336,011   $ 160,405   $ 51,656   $ 11,947   $ 11,215   $ 100,788  
 

Europe

    75,741     23,086     7,846         561     44,248  
 

Latin America

    124,084     36,917     8,816         4,177     74,174  
 

Exploration

                24,076     312     (24,388 )
                             
 

 

  $ 535,836   $ 220,408   $ 68,318   $ 36,023   $ 16,265   $ 194,822  
                             
 

Segment income

  $ 194,822  
 

Corporate and Other:

                                     
 

    Interest and sundry income

    866  
 

    Impairment loss on available-for-sale securities

    (600 )
 

    Environmental remediation

    (4,066 )
 

    Gain on derivative financial instruments

    1,674  
 

    General and administrative

    (25,416 )
 

    Interest expense

    (14,933 )
                                       
 

Income before income and mining taxes

  $ 152,347  
                                       


 

 
Three Months Ended September 30, 2011
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization of
Property, Plant
and Mine
Development
  Exploration and
Corporate
Development
  Foreign
Currency
Translation
Gain
  Loss on
Goldex
mine
  Segment
Income
(Loss)
 
 

Canada

  $ 352,514   $ 169,243   $ 50,133   $   $ (12,581 ) $ 298,183   $ (152,464 )
 

Europe

    62,165     27,648     6,939         (2,355 )       29,933  
 

Latin America

    105,858     40,299     10,032         (5,770 )       61,297  
 

Exploration

                9,610     (714 )       (8,896 )
                                 
 

 

  $ 520,537   $ 237,190   $ 67,104   $ 9,610   $ (21,420 ) $ 298,183   $ (70,130 )
                                 
 

Segment loss

  $ (70,130 )
 

Corporate and Other:

                                           
 

    Interest and sundry expense

    (46 )
 

    Impairment loss on available-for-sale securities

    (3,402 )
 

    Loss on derivative financial instruments

    (1,678 )
 

    General and administrative

    (20,410 )
 

    Interest expense

    (14,918 )
                                             
 

Loss before income and mining taxes

  $ (110,584 )
                                             


 

 
Nine Months Ended
September 30, 2012
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization of
Property, Plant
and Mine
Development
  Exploration and
Corporate
Development
  Foreign
Currency
Translation Loss
  Segment Income
(Loss)
 
 

Canada

  $ 913,421   $ 469,821   $ 147,560   $ 35,910   $ 12,882   $ 247,248  
 

Europe

    205,824     72,631     22,297         1,777     109,119  
 

Latin America

    349,086     112,897     29,324         5,968     200,897  
 

Exploration

                57,507     146     (57,653 )
                             
 

 

  $ 1,468,331   $ 655,349   $ 199,181   $ 93,417   $ 20,773   $ 499,611  
                             
 

Segment income

  $ 499,611  
 

Corporate and Other:

                               
 

    Interest and sundry income

    1,112  
 

    Impairment loss on available-for-sale securities

    (12,181 )
 

    Environmental remediation

    (4,066 )
 

    Loss on sale of available-for-sale securities

    (6,731 )
 

    Loss on derivative financial instruments

    (1,752 )
 

    General and administrative

    (91,359 )
 

    Provincial capital tax

    (4,001 )
 

    Interest expense

    (43,600 )
                                       
 

Income before income and mining taxes

  $ 337,033  
                                       


 

 
Nine Months Ended
September 30, 2011
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization of
Property, Plant
and Mine
Development
  Exploration and
Corporate
Development
  Foreign
Currency
Translation
(Gain) Loss
  Loss on
Goldex
mine
  Segment
Income
(Loss)
 
 

Canada

  $ 928,228   $ 456,634   $ 143,104   $   $ (893 ) $ 298,183   $ 31,200  
 

Europe

    163,391     82,340     19,716         1,432         59,903  
 

Latin America

    274,677     109,537     25,448         (5,101 )       144,793  
 

Exploration

                43,877     (80 )       (43,797 )
                                 
 

 

  $ 1,366,296   $ 648,511   $ 188,268   $ 43,877   $ (4,642 ) $ 298,183   $ 192,099  
                                 
 

Segment income

  $ 192,099  
 

Corporate and Other:

                                     
 

    Interest and sundry expense

    (22 )
 

    Gain on sale of available-for-sale securities

    4,814  
 

    Impairment loss on available-for-sale securities

    (3,402 )
 

    Gain on derivative financial instruments

    654  
 

    General and administrative

    (79,684 )
 

    Interest expense

    (42,915 )
                                             
 

Income before income and mining taxes

  $ 71,544  
                                             

 

   
  Total Assets as at  
   
  September 30, 2012   December 31, 2011  
 

Canada

  $ 3,272,669   $ 3,205,158  
 

Europe

    851,294     771,714  
 

Latin America

    1,035,293     1,020,078  
 

Exploration

    59,369     37,312  
             
 

 

  $ 5,218,625   $ 5,034,262  
             
FAIR VALUE MEASUREMENT (Details) (Fair value measured on recurring basis, USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Total
 
Financial assets:
 
Cash equivalents and short-term investments
$ 11,473 
Available-for-sale securities
92,150 
Trade receivables
77,044 
Fair value of derivative financial instruments
3,613 
Total financial assets
184,280 
Maximum term of maturity from the date of purchase to classify marketable securities as cash equivalents
3 months 
Minimum term of maturity from the date of purchase to classify marketable securities as short-term investments
3 months 
Level 1
 
Financial assets:
 
Available-for-sale securities
92,150 
Total financial assets
92,150 
Level 2
 
Financial assets:
 
Cash equivalents and short-term investments
11,473 
Trade receivables
77,044 
Fair value of derivative financial instruments
3,613 
Total financial assets
$ 92,130 
SHAREHOLDERS' EQUITY (Details)
3 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2012
USD ($)
Sep. 30, 2012
CAD ($)
Mar. 31, 2012
USD ($)
timesperyear
Sep. 30, 2011
USD ($)
Sep. 30, 2011
CAD ($)
Mar. 31, 2011
USD ($)
Sep. 30, 2012
USD ($)
Sep. 30, 2012
CAD ($)
Sep. 30, 2011
USD ($)
Sep. 30, 2011
CAD ($)
Dec. 31, 2011
Sep. 30, 2012
Restricted Share Unit Plan
Minimum
Sep. 30, 2012
Restricted Share Unit Plan
Maximum
Share-based compensation arrangements
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of options granted under ESOP
 
 
 
 
 
 
 
 
 
 
 
2 years 
3 years 
Amount transferred to an employee benefit trust to fund restricted share unit plan
 
 
$ 12,000,000 
 
 
$ 3,700,000 
 
 
 
 
 
 
 
Number of times per year the employee benefit trust is funded
 
 
 
 
 
 
 
 
 
 
 
 
Common shares outstanding at September 30, 2012
171,578,933 
171,578,933 
 
 
 
 
171,578,933 
171,578,933 
 
 
 
 
 
Employees' stock options (in shares)
10,867,426 
10,867,426 
 
 
 
 
10,867,426 
10,867,426 
 
 
8,959,051 
 
 
Warrants (in shares)
8,600,000 
8,600,000 
 
 
 
 
8,600,000 
8,600,000 
 
 
 
 
 
Restricted share unit plan (in shares)
233,860 
233,860 
 
 
 
 
233,860 
233,860 
 
 
 
 
 
Maximum number of common shares (in shares)
191,280,219 
191,280,219 
 
 
 
 
191,280,219 
191,280,219 
 
 
 
 
 
Stock options granted (in shares)
6,000 
6,000 
 
27,000 
27,000 
 
3,257,000 
3,257,000 
2,620,785 
2,620,785 
 
 
 
Granted, weighted average exercise price (in Canadian dollars per share)
 
 
 
 
 
 
 
$ 36.99 
 
$ 76.24 
 
 
 
Stock options, weighted average exercised (in shares)
125,225 
125,225 
 
89,300 
89,300 
 
140,475 
140,475 
306,688 
306,688 
 
 
 
Stock options granted - Weighted average exercise price (in Canadian dollars per share)
 
$ 43.39 
 
 
$ 55.25 
 
 
 
 
 
 
 
 
Cash received from exercise of stock options (in U.S. dollars)
4,600,000 
 
 
4,600,000 
 
 
5,200,000 
 
13,500,000 
 
 
 
 
Stock options cancelled (in shares)
605,750 
605,750 
 
24,500 
24,500 
 
726,500 
726,500 
112,000 
112,000 
 
 
 
Cancelled (in Canadian dollars per share)
 
 
 
 
 
 
 
$ 59.80 
 
$ 69.08 
 
 
 
Stock options cancelled - Weighted-average exercise price (in Canadian dollars per share)
 
$ 59.69 
 
 
$ 69.37 
 
 
 
 
 
 
 
 
Stock options expired (in shares)
 
 
 
 
 
 
481,650 
481,650 
4,250 
4,250 
 
 
 
Stock options expired - weighted-average exercise price (in Canadian dollars per share)
 
 
 
 
 
 
 
$ 47.49 
 
$ 23.02 
 
 
 
Net income per share
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) for the period
$ 106,326,000 
 
 
$ (81,614,000)
 
 
$ 228,146,000 
 
$ 32,475,000 
 
 
 
 
Weighted average number of common shares outstanding - basic
171,341,000 
171,341,000 
 
169,238,000 
169,238,000 
 
171,055,000 
171,055,000 
169,055,000 
169,055,000 
 
 
 
Add : Dilutive impact of employee stock options (in shares)
 
 
 
 
 
 
 
 
1,094,000 
1,094,000 
 
 
 
Dilutive impact of warrants (in shares)
 
 
 
 
 
 
 
 
2,447,000 
2,447,000 
 
 
 
Dilutive impact of shares related to RSU plan
255,000 
255,000 
 
 
 
 
242,000 
242,000 
50,000 
50,000 
 
 
 
Weighted average number of common shares outstanding - diluted
171,596,000 
171,596,000 
 
169,238,000 
169,238,000 
 
171,297,000 
171,297,000 
172,646,000 
172,646,000 
 
 
 
Net income per share - basic (in dollars per share)
$ 0.62 
 
 
$ (0.48)
 
 
$ 1.33 
 
$ 0.19 
 
 
 
 
Net income per share - diluted (in dollars per share)
$ 0.62 
 
 
$ (0.48)
 
 
$ 1.33 
 
$ 0.19 
 
 
 
 
Anti-dilutive shares
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee stock options excluded from the computation of diluted weighted average common shares (in shares)
 
 
 
 
 
 
 
 
738,321 
738,321 
 
 
 
STOCK-BASED COMPENSATION (Details) (CAD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Stock options activity
 
 
 
 
Options outstanding, beginning of year (in shares)
 
 
8,959,051 
 
Granted (in shares)
6,000 
27,000 
3,257,000 
2,620,785 
Exercised (in shares)
(125,225)
(89,300)
(140,475)
(306,688)
Forfeited (in shares)
(605,750)
(24,500)
(726,500)
(112,000)
Expired (in shares)
 
 
(481,650)
(4,250)
Options outstanding, end of year (in shares)
10,867,426 
 
10,867,426 
 
Weighted Average Exercise Price
 
 
 
 
Granted, weighted average exercise price (in Canadian dollars per share)
 
 
$ 36.99 
$ 76.24 
Expired - weighted-average exercise price (in Canadian dollars per share)
 
 
$ 47.49 
$ 23.02 
Employee Stock Option Plan
 
 
 
 
Stock options activity
 
 
 
 
Options outstanding, beginning of year (in shares)
 
 
8,959,051 
 
Granted (in shares)
 
 
3,257,000 
 
Exercised (in shares)
 
 
(140,475)
 
Forfeited (in shares)
 
 
(726,500)
 
Expired (in shares)
 
 
(481,650)
 
Options outstanding, end of year (in shares)
10,867,426 
 
10,867,426 
 
Options exercisable at end of period (in shares)
6,780,014 
 
6,780,014 
 
Weighted Average Exercise Price
 
 
 
 
Outstanding, beginning of year, weighted average exercise price (in Canadian dollars per share)
 
 
$ 62.88 
 
Granted, weighted average exercise price (in Canadian dollars per share)
 
 
$ 36.99 
 
Exercised, weighted average exercise price (in Canadian dollars per share)
 
 
$ 37.04 
 
Forfeited, weighted average exercise price (in Canadian dollars per share)
 
 
$ 59.80 
 
Expired - weighted-average exercise price (in Canadian dollars per share)
 
 
$ 47.49 
 
Outstanding, end of year, weighted average exercise price (in Canadian dollars per share)
$ 56.35 
 
$ 56.35 
 
Options exercisable at end of period (in Canadian dollars per share)
$ 59.34 
 
$ 59.34 
 
STOCK-BASED COMPENSATION (Details 2) (Employee Stock Option Plan)
9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Employee Stock Option Plan
 
 
Fair value of options weighted average assumptions:
 
 
Pricing model used for valuation of options
Black-Scholes 
 
Risk-free interest rate (as a percent)
1.25% 
1.95% 
Expected life of options
2 years 9 months 18 days 
2 years 6 months 
Expected volatility of the Company's share price (as a percent)
37.52% 
34.63% 
Expected dividend yield (as a percent)
2.14% 
0.89% 
AVAILABLE-FOR-SALE SECURITIES (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
Schedule of Available-for-sale Securities
 
 
 
 
 
Net proceeds on available-for-sale securities and other
 
 
$ 30,700,000 
$ 9,300,000 
 
Loss on sale of available-for-sale securities
 
 
6,700,000 
4,800,000 
 
Estimated fair value
92,150,000 
 
92,150,000 
 
145,411,000 
Impairment loss on available-for-sale securities
600,000 
3,402,000 
12,181,000 
3,402,000 
 
Available-for-sale securities in an unrealized gain position
 
 
 
 
 
Schedule of Available-for-sale Securities
 
 
 
 
 
Cost (net of impairments)
78,272,000 
 
78,272,000 
 
127,344,000 
Unrealized gains (losses) in accumulated other comprehensive gain (loss)
13,219,000 
 
13,219,000 
 
16,408,000 
Estimated fair value
91,491,000 
 
91,491,000 
 
143,752,000 
Available-for-sale securities in an unrealized loss position
 
 
 
 
 
Schedule of Available-for-sale Securities
 
 
 
 
 
Cost (net of impairments)
709,000 
 
709,000 
 
1,717,000 
Unrealized gains (losses) in accumulated other comprehensive gain (loss)
(50,000)
 
(50,000)
 
(58,000)
Estimated fair value
659,000 
 
659,000 
 
1,659,000 
Impairment loss on available-for-sale securities
 
 
$ 600,000 
 
 
Maximum duration of impairment for investments in available-for-sale securities
 
 
3 months 
 
 
LONG-TERM DEBT (Details) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Credit Facilities
Dec. 31, 2011
Credit Facilities
Jul. 20, 2012
Credit Facilities
Sep. 30, 2012
Guaranteed senior unsecured notes
Jul. 24, 2010
2012 Notes
Apr. 7, 2010
2010 Notes
Debt instrument
 
 
 
 
 
 
 
 
 
 
Outstanding notes
 
 
 
 
 
 
 
$ 800,000,000 
$ 200,000,000 
$ 600,000,000 
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% 
Amount available under credit facilities after amendment
 
 
 
 
 
 
1,200,000,000 
 
 
 
Repayment of credit facility
 
 
 
 
230,000,000 
 
 
 
 
 
Amount drew down on the credit facility during the period
 
 
 
 
 
50,000,000 
 
 
 
 
Amount drawn down on the credit facility
 
 
 
 
 
320,000,000 
 
 
 
 
Long-term debt interest costs
12,300,000 
10,700,000 
34,700,000 
31,000,000 
 
 
 
 
 
 
Interest expense capitalized to construction in progress
$ 300,000 
$ 600,000 
$ 800,000 
$ 800,000 
 
 
 
 
 
 
FINANCIAL INSTRUMENTS (Details)
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2012
USD ($)
Sep. 30, 2011
USD ($)
Sep. 30, 2012
USD ($)
Sep. 30, 2011
USD ($)
Sep. 30, 2011
Zinc
USD ($)
Sep. 30, 2012
Zinc
USD ($)
Sep. 30, 2011
Zinc
USD ($)
Dec. 31, 2011
Zinc
usdperMT
Sep. 30, 2011
Silver
USD ($)
Sep. 30, 2012
Heating oil
USD ($)
Sep. 30, 2012
Heating oil
USD ($)
Sep. 30, 2012
Heating oil
Designated as hedges
USD ($)
Sep. 30, 2012
Heating oil
Not designated as hedges
USD ($)
Sep. 30, 2012
Call Options Written
USD ($)
Sep. 30, 2011
Call Options Written
USD ($)
Sep. 30, 2012
Call Options Written
USD ($)
Sep. 30, 2011
Call Options Written
USD ($)
Dec. 31, 2011
Call Options Written
Zinc
MT
usdperMT
Sep. 30, 2012
Foreign exchange forward contract
Designated as hedges
USD ($)
Sep. 30, 2012
Foreign exchange forward contract
Designated as hedges
USD ($)
Sep. 30, 2011
Foreign exchange forward contract
Designated as hedges
USD ($)
Sep. 30, 2012
Foreign exchange forward contract
Designated as hedges
CAD ($)
Sep. 30, 2011
Foreign exchange forward contract
Designated as hedges
CAD ($)
Sep. 30, 2011
Foreign exchange forward contract
Designated as hedges
2011 expenditures
USD ($)
Sep. 30, 2012
Foreign exchange forward contract
Designated as hedges
2012 expenditures
USD ($)
Sep. 30, 2011
Foreign exchange forward contract
Designated as hedges
2012 expenditures
USD ($)
Sep. 30, 2011
Foreign exchange forward contract
Not designated as hedges
USD ($)
Sep. 30, 2011
Foreign exchange forward contract
Not designated as hedges
USD ($)
Dec. 31, 2011
Foreign exchange forward contract
Not designated as hedges
USD ($)
Mar. 31, 2011
Foreign exchange forward contract
Not designated as hedges
CAD ($)
Sep. 30, 2012
Extendible foreign exchange flat forward
USD ($)
Sep. 30, 2011
Extendible foreign exchange flat forward
USD ($)
Sep. 30, 2012
Extendible foreign exchange flat forward
USD ($)
Sep. 30, 2011
Extendible foreign exchange flat forward
USD ($)
Dec. 31, 2011
Put options purchased
Zinc
MT
usdperMT
Sep. 30, 2012
Expected 2012 diesel fuel exposure
Heating oil
item
gal
Sep. 30, 2012
Expected 2013 diesel fuel exposure
Heating oil
item
gal
Sep. 30, 2012
Interest rate lock derivative financial instruments
USD ($)
Sep. 30, 2012
Interest rate lock derivative financial instruments
USD ($)
Derivative
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of expenditures hedged
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 60,000,000 
$ 75,000,000 
$ 240,000,000 
 
 
$ 90,000,000 
 
 
 
 
 
 
 
 
 
 
Amount of expenditures hedged, expiring each month
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,000,000 
25,000,000 
20,000,000 
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
Exchange rate under foreign exchange forward contract (in CAD per US dollar)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.01 
0.99 
 
 
 
 
 
 
0.99 
 
 
 
 
 
 
 
 
 
Gain (loss) on derivative financial instruments
 
435,000 
 
(444,000)
 
 
 
 
 
(89,000)
(135,000)
 
 
 
 
 
 
 
(1,300,000)
(1,200,000)
 
 
 
 
 
 
400,000 
(400,000)
 
 
 
 
 
 
 
 
 
(7,000)
387,000 
Gain recognized in interim consolidated statement of income and comprehensive income
 
 
 
 
800,000 
500,000 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss recognized in interim consolidated statement of income (loss) and comprehensive income (loss)
(1,255,000)
 
(1,238,000)
 
 
 
 
 
(3,400,000)
 
 
 
(1,500,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(4,300,000)
 
 
 
 
 
 
 
 
 
 
 
Call option premiums generated
 
 
 
 
 
 
 
 
 
 
 
 
 
200,000 
1,400,000 
1,300,000 
3,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notional amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,000 
9,500,000 
500,000 
 
 
Strike price for option (in dollars per metric tonne)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,200 
 
 
 
 
Realized gain
 
 
 
 
800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options expiring each month, beginning from February 28 (2011) or March 31 (2010) (in metric tonnes)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,000 
 
 
 
 
Limit for participation, zinc prices set by zero-cost collar strategy (in dollars per metric tonne)
 
 
 
 
 
 
 
2,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized mark-to-market (gain) loss
 
 
 
 
(2,267,000)
 
(2,992,000)
 
 
 
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,704,000 
 
4,271,000 
 
 
 
 
 
Changes in AOCI balances recorded in consolidated financial statements pertaining to the foreign exchange hedging activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated other comprehensive income (loss), beginning of period
 
 
(7,106,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,653,000)
 
(4,404,000)
 
 
 
 
 
 
Other comprehensive gain (loss) recognized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,300,000 
(16,000,000)
 
 
 
 
 
 
 
 
 
5,897,000 
(15,994,000)
7,979,000 
(15,994,000)
 
 
 
 
 
Accumulated other comprehensive income (loss), end of period
(4,907,000)
 
(4,907,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,085,000 
(15,994,000)
2,085,000 
(15,994,000)
 
 
 
 
 
Gain on derivative financial instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums realized on written foreign exchange call option
 
 
 
 
 
 
 
 
 
 
 
 
 
(277,000)
(1,349,000)
(1,254,000)
(3,898,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized mark-to-market (gain) loss
 
 
 
 
(2,267,000)
 
(2,992,000)
 
 
 
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,704,000 
 
4,271,000 
 
 
 
 
 
(Gain) loss on heating oil derivative financial instruments and other
 
 
 
 
 
 
 
 
 
(1,447,000)
3,482,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gain) loss on derivative financial instruments
$ (1,674,000)
$ 1,678,000 
$ 1,752,000 
$ (654,000)
$ (845,000)
$ (476,000)
$ (994,000)
 
$ 3,403,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average price (in dollars per gallon)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.97 
2.45 
 
 
Percentage of Meadowbank's expected exposure.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
55.00% 
3.00% 
 
 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2012
COMMITMENTS AND CONTINGENCIES
 
Guarantees provided in the form of letters of credit
$ 136.0 
SEGMENTED INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
SEGMENTED INFORMATION
 
 
 
 
 
Minimum required percentage of combined revenue, profit or loss or total assets of reported operating segments
10.00% 
 
10.00% 
 
 
Segment reporting Information
 
 
 
 
 
Goodwill
$ 229,279 
 
$ 229,279 
 
$ 229,279 
Revenues from Mining Operations
535,836 
520,537 
1,468,331 
1,366,296 
 
Production Costs
220,408 
237,190 
655,349 
648,511 
 
Amortization of Property, Plant and Mine Development
68,318 
67,104 
199,181 
188,268 
 
Exploration and Corporate Development
36,023 
9,610 
93,417 
43,877 
 
Foreign currency translation loss (gain)
16,265 
(21,420)
20,773 
(4,642)
 
Loss on Goldex mine
 
298,183 
 
298,183 
 
Segment Income (Loss)
194,822 
(70,130)
499,611 
192,099 
 
Interest and sundry expense (income)
866 
(46)
1,112 
(22)
 
Impairment loss on available-for-sale securities
(600)
(3,402)
(12,181)
(3,402)
 
Environmental remediation
(4,066)
 
(4,066)
 
 
Gain on sale and write-down of available-for-sale securities
 
 
(6,731)
4,814 
 
Gain (loss) on derivative financial instruments
1,674 
(1,678)
(1,752)
654 
 
General and administrative expenses
(25,416)
(20,410)
(91,359)
(79,684)
 
Provincial capital tax
 
 
(4,001)
 
 
Interest expense
(14,933)
(14,918)
(43,600)
(42,915)
 
Income (loss) before income and mining taxes
152,347 
(110,584)
337,033 
71,544 
 
TOTAL ASSETS
5,218,625 
 
5,218,625 
 
5,034,262 
Meliadine Mine Project
 
 
 
 
 
Segment reporting Information
 
 
 
 
 
Goodwill
200,100 
 
200,100 
 
 
La India Mine Project
 
 
 
 
 
Segment reporting Information
 
 
 
 
 
Goodwill
29,200 
 
29,200 
 
 
Canada
 
 
 
 
 
Segment reporting Information
 
 
 
 
 
Revenues from Mining Operations
336,011 
352,514 
913,421 
928,228 
 
Production Costs
160,405 
169,243 
469,821 
456,634 
 
Amortization of Property, Plant and Mine Development
51,656 
50,133 
147,560 
143,104 
 
Exploration and Corporate Development
11,947 
 
35,910 
 
 
Foreign currency translation loss (gain)
11,215 
(12,581)
12,882 
(893)
 
Loss on Goldex mine
 
298,183 
 
298,183 
 
Segment Income (Loss)
100,788 
(152,464)
247,248 
31,200 
 
TOTAL ASSETS
3,272,669 
 
3,272,669 
 
3,205,158 
Europe
 
 
 
 
 
Segment reporting Information
 
 
 
 
 
Revenues from Mining Operations
75,741 
62,165 
205,824 
163,391 
 
Production Costs
23,086 
27,648 
72,631 
82,340 
 
Amortization of Property, Plant and Mine Development
7,846 
6,939 
22,297 
19,716 
 
Foreign currency translation loss (gain)
561 
(2,355)
1,777 
1,432 
 
Segment Income (Loss)
44,248 
29,933 
109,119 
59,903 
 
TOTAL ASSETS
851,294 
 
851,294 
 
771,714 
Latin America
 
 
 
 
 
Segment reporting Information
 
 
 
 
 
Revenues from Mining Operations
124,084 
105,858 
349,086 
274,677 
 
Production Costs
36,917 
40,299 
112,897 
109,537 
 
Amortization of Property, Plant and Mine Development
8,816 
10,032 
29,324 
25,448 
 
Foreign currency translation loss (gain)
4,177 
(5,770)
5,968 
(5,101)
 
Segment Income (Loss)
74,174 
61,297 
200,897 
144,793 
 
TOTAL ASSETS
1,035,293 
 
1,035,293 
 
1,020,078 
Exploration
 
 
 
 
 
Segment reporting Information
 
 
 
 
 
Exploration and Corporate Development
24,076 
9,610 
57,507 
43,877 
 
Foreign currency translation loss (gain)
312 
(714)
146 
(80)
 
Segment Income (Loss)
(24,388)
(8,896)
(57,653)
(43,797)
 
TOTAL ASSETS
59,369 
 
59,369 
 
37,312 
Corporate and Other Income (Loss)
 
 
 
 
 
Segment reporting Information
 
 
 
 
 
Interest and sundry expense (income)
866 
(46)
1,112 
(22)
 
Impairment loss on available-for-sale securities
(600)
(3,402)
(12,181)
(3,402)
 
Environmental remediation
(4,066)
 
(4,066)
 
 
Gain on sale and write-down of available-for-sale securities
 
 
(6,731)
4,814 
 
Gain (loss) on derivative financial instruments
1,674 
(1,678)
(1,752)
654 
 
General and administrative expenses
(25,416)
(20,410)
(91,359)
(79,684)
 
Provincial capital tax
 
 
(4,001)
 
 
Interest expense
(14,933)
(14,918)
(43,600)
(42,915)
 
Income (loss) before income and mining taxes
$ 152,347 
$ (110,584)
$ 337,033 
$ 71,544 
 
ENVIRONMENTAL REMEDIATION LIABILITY AND RECLAMATION PROVISION (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2012
Dec. 31, 2011
Environmental remediation liability
 
 
 
Environmental remediation
$ 4,066,000 
$ 4,066,000 
 
Environmental remediation liability
30,600,000 
30,600,000 
 
Environmental remediation liability, current
9,275,000 
9,275,000 
26,069,000 
Accrued future environmental remediation cost
4,400,000 
 
 
Goldex mine
 
 
 
Environmental remediation liability
 
 
 
Environmental remediation
3,500,000 
15,800,000 
 
Environmental remediation liability
30,600,000 
30,600,000 
 
Environmental remediation liability, current
$ 9,300,000 
$ 9,300,000 
 
ACQUISITIONS (Details) (Grayd, USD $)
In Millions, except Share data, unless otherwise specified
1 Months Ended
Jan. 23, 2012
Nov. 18, 2011
Grayd
 
 
Business acquisition details
 
 
Percentage of outstanding shares acquired
 
94.77% 
Total purchase price
$ 11.8 
$ 222.1 
Cash payable to total consideration
9.3 
166.0 
Shares issued for acquisition of mining property
68,941 
1,250,477 
Goodwill recognized from business combination
 
29.2 
Newly issued Agnico-Eagle shares value
$ 2.4 
 
GENERAL AND ADMINISTRATIVE (Details) (Meadowbank Mine Fire, USD $)
In Millions, unless otherwise specified
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Mar. 31, 2011
Mar. 31, 2011
Sep. 30, 2012
Dec. 31, 2011
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 
6.5 
8.8 
Loss due to fire recognized in the General and Administrative
 
3.1 
 
 
Insurance proceeds received
 
 
$ 2.3 
$ 2.4 
SUBSEQUENT EVENTS (Details)
3 Months Ended 9 Months Ended 1 Months Ended
Sep. 30, 2012
Sep. 30, 2012
Oct. 31, 2012
Dividend declared
Subsequent event disclosures
 
 
 
Dividends declared (in dollars per share)
$ 0.20 
$ 0.60 
$ 0.20 
SECURITIES CLASS ACTION LAWSUITS (Details) (USD $)
In Millions, unless otherwise specified
1 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended
Nov. 30, 2011
item
Sep. 30, 2012
Apr. 12, 2012
Goldex mine
item
Sep. 30, 2012
Goldex mine
Securities class action lawsuits
 
 
 
 
Number of putative class actions against entity (in lawsuits)
 
 
 
Damages sought by plaintiffs (in dollars)
 
$ 250 
 
$ 100 
Number of directors issued with notice of motion for leave to Institute Class Action and for Appointment of Representative Plaintiff