AGNICO EAGLE MINES LTD, 20-F filed on 3/29/2012
Annual and Transition Report (foreign private issuer)
Document and Entity Information
12 Months Ended
Dec. 31, 2011
Document and Entity Information
 
Entity Registrant Name
AGNICO EAGLE MINES LTD 
Entity Central Index Key
0000002809 
Document Type
20-F 
Document Period End Date
Dec. 31, 2011 
Amendment Flag
false 
Current Fiscal Year End Date
--12-31 
Entity Well-known Seasoned Issuer
Yes 
Entity Voluntary Filers
No 
Entity Current Reporting Status
Yes 
Entity Filer Category
Large Accelerated Filer 
Entity Common Stock, Shares Outstanding
170,813,736 
Document Fiscal Year Focus
2011 
Document Fiscal Period Focus
FY 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Current
 
 
Cash and cash equivalents
$ 179,447 
$ 95,560 
Short-term investments
6,570 
6,575 
Restricted cash (note 14)
35,441 
2,510 
Trade receivables (note 1)
75,899 
112,949 
Inventories:
 
 
Ore stockpiles
28,155 
67,764 
Concentrates and dore bars
57,528 
50,332 
Supplies
182,389 
149,647 
Income taxes recoverable
371 
 
Available-for-sale securities (note 2(b))
145,411 
99,109 
Other current assets (note 2(a))
110,369 
89,776 
Total current assets
821,580 
674,222 
Other assets (note 2(c))
88,048 
61,502 
Goodwill (note 10)
229,279 
200,064 
Property, plant and mine development (note 3)
3,895,355 
4,564,563 
TOTAL ASSETS
5,034,262 
5,500,351 
Current
 
 
Accounts payable and accrued liabilities (note 11)
203,547 
160,375 
Environmental remediation liability (note 6(a))
26,069 
 
Dividends payable
 
108,009 
Interest payable
9,356 
9,743 
Income taxes payable
 
14,450 
Capital lease obligations (note 13)
11,068 
10,592 
Fair value of derivative financial instruments (note 15)
4,404 
142 
Total current liabilities
254,444 
303,311 
Long-term debt (note 5)
920,095 
650,000 
Reclamation provision and other liabilities (note 6)
145,988 
145,536 
Deferred income and mining tax liabilities (note 9)
498,572 
736,054 
SHAREHOLDERS' EQUITY
 
 
Common shares (notes 7(a), (b), (c) and (d)): Issued - 170,859,604 common shares, less 45,868 shares held in trust
3,181,381 
3,078,217 
Stock options (note 8(a))
117,694 
78,554 
Warrants (note 7(c))
24,858 
24,858 
Contributed surplus
15,166 
15,166 
Retained earnings (deficit)
(129,021)
440,265 
Accumulated other comprehensive income (loss) (note 7(e))
(7,106)
28,390 
Total common shareholders' equity
3,202,972 
3,665,450 
Non-controlling interest
12,191 
 
Total shareholders' equity
3,215,163 
3,665,450 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
5,034,262 
5,500,351 
Contingencies and commitments (notes 6, 9, 12 and 13(b))
   
   
CONSOLIDATED BALANCE SHEETS (Parenthetical)
Dec. 31, 2011
Dec. 31, 2010
CONSOLIDATED BALANCE SHEETS
 
 
Common shares, issued
170,859,604 
168,763,496 
Treasury shares, held in trust
45,868 
43,141 
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
REVENUES
 
 
 
Revenues from mining operations (note 1)
$ 1,821,799 
$ 1,422,521 
$ 613,762 
COSTS, EXPENSES AND OTHER INCOME
 
 
 
Production
876,078 
677,472 
306,318 
Exploration and corporate development
75,721 
54,958 
36,279 
Amortization of property, plant and mine development (note 13)
261,781 
192,486 
72,461 
General and administrative (note 16)
107,926 
94,327 
63,687 
Write-down of available-for-sale securities
8,569 
 
 
Provincial capital tax
9,223 
(6,075)
5,014 
Interest expense (note 5)
55,039 
49,493 
8,448 
Interest and sundry expense (income)
5,188 
(10,254)
(12,580)
Impairment loss on Meadowbank mine (note 18)
907,681 
 
 
Loss on Goldex mine (note 17)
302,893 
 
 
Gain on acquisition of Comaplex Minerals Corp., net of transaction costs (note 10)
 
(57,526)
 
Gain on derivative financial instruments (note 15)
(3,683)
(7,612)
(3,592)
Gain on sale of available-for-sale securities (note 2(b))
(4,907)
(19,487)
(10,142)
Foreign currency translation loss (gain)
(1,082)
19,536 
39,831 
Income (loss) before income and mining taxes
(778,628)
435,203 
108,038 
Income and mining taxes (note 9)
(209,673)
103,087 
21,500 
Net income (loss) for the year
(568,955)
332,116 
86,538 
Attributed to non-controlling interest
(60)
 
 
Attributed to common shareholders
(568,895)
332,116 
86,538 
Net income (loss) per share - basic (note 7(f)) (in dollars per share)
$ (3.36)
$ 2.05 
$ 0.55 
Net income (loss) per share - diluted (note 7(f)) (in dollars per share)
$ (3.36)
$ 2.00 
$ 0.55 
Cash dividends declared per common share (in dollars per share)
$ 0 
$ 0.64 
$ 0.18 
COMPREHENSIVE INCOME (LOSS)
 
 
 
Net income (loss) for the year
(568,955)
332,116 
86,538 
Other comprehensive income (loss):
 
 
 
Unrealized gain (loss) on hedging activities
(5,863)
 
16,287 
Adjustments for derivative instruments maturing during the year
1,459 
 
(7,399)
Unrealized gain (loss) on available-for-sale securities
(26,874)
64,649 
76,037 
Adjustments for realized gain on available-for-sale securities due to dispositions and write-downs during the year
(4,907)
(19,487)
(10,142)
Net amount reclassified to net income due to acquisition of business (note 10)
 
(64,508)
 
Change in unrealized loss on pension liability
(1,055)
(4,093)
(727)
Tax effect of other comprehensive income (loss) items
1,744 
780 
(2,399)
Other comprehensive income (loss) for the year
(35,496)
(22,659)
71,657 
Comprehensive income (loss) for the year
(604,451)
309,457 
158,195 
Attributed to non-controlling interest
(60)
 
 
Attributed to common shareholders
$ (604,391)
$ 309,457 
$ 158,195 
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, 2008
 
$ 2,299,747 
$ 41,052 
$ 24,858 
$ 15,166 
$ 157,541 
$ (20,608)
 
Balance (in shares) at Dec. 31, 2008
 
154,808,918 
 
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
 
Shares issued under Employee Stock Option Plan (note 8(a))
 
48,313 
(11,683)
 
 
 
 
 
Shares issued under Employee Stock Option Plan (note 8(a)) (in shares)
 
1,238,000 
 
 
 
 
 
 
Stock options
 
 
36,402 
 
 
 
 
 
Shares issued under the Incentive Share Purchase Plan (note 8(b))
 
11,290 
 
 
 
 
 
 
Shares issued under the Incentive Share Purchase Plan (note 8(b)) (in shares)
 
196,649 
 
 
 
 
 
 
Shares issued under flow-through share private placement (note 7(b))
 
19,153 
 
 
 
 
 
 
Shares issued under flow-through share private placement (note 7(b)) (in shares)
358,900 
358,900 
 
 
 
 
 
 
Shares issued under the Company's dividend reinvestment plan
 
912 
 
 
 
 
 
 
Shares issued under the Company's dividend reinvestment plan (in shares)
 
18,764 
 
 
 
 
 
 
Shares issued for purchase of mining property (note 7(c) and (d))
 
894 
 
 
 
 
 
 
Shares issued for purchase of mining property (note 7(c) and (d)) (in shares)
 
33,825 
 
 
 
 
 
 
Net income (loss) for the year attributed to common shareholders
86,538 
 
 
 
 
86,538 
 
 
Dividends declared (nil, $0.64 and $0.18 per share for the year 2011, 2010 and 2009) (note 7(a))
 
 
 
 
 
(27,921)
 
 
Other comprehensive income (loss) for the year
71,657 
 
 
 
 
 
71,657 
 
Restricted share unit plan (note 8(c))
 
(1,550)
 
 
 
 
 
 
Restricted share unit plan (note 8(c)) (in shares)
 
(29,882)
 
 
 
 
 
 
Balance at Dec. 31, 2009
 
2,378,759 
65,771 
24,858 
15,166 
216,158 
51,049 
 
Balance (in shares) at Dec. 31, 2009
 
156,625,174 
 
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
 
Shares issued under Employee Stock Option Plan (note 8(a))
 
104,111 
(29,447)
 
 
 
 
 
Shares issued under Employee Stock Option Plan (note 8(a)) (in shares)
 
1,627,766 
 
 
 
 
 
 
Stock options
 
 
42,230 
 
 
 
 
 
Shares issued under the Incentive Share Purchase Plan (note 8(b))
 
14,963 
 
 
 
 
 
 
Shares issued under the Incentive Share Purchase Plan (note 8(b)) (in shares)
 
229,583 
 
 
 
 
 
 
Shares issued under the Company's dividend reinvestment plan
 
1,404 
 
 
 
 
 
 
Shares issued under the Company's dividend reinvestment plan (in shares)
 
25,243 
 
 
 
 
 
 
Shares issued for purchase of mining property (note 7(c) and (d))
 
579,800 
 
 
 
 
 
 
Shares issued for purchase of mining property (note 7(c) and (d)) (in shares)
 
10,225,848 
 
 
 
 
 
 
Net income (loss) for the year attributed to common shareholders
332,116 
 
 
 
 
332,116 
 
 
Dividends declared (nil, $0.64 and $0.18 per share for the year 2011, 2010 and 2009) (note 7(a))
 
 
 
 
 
(108,009)
 
 
Other comprehensive income (loss) for the year
(22,659)
 
 
 
 
 
(22,659)
 
Restricted share unit plan (note 8(c))
 
(820)
 
 
 
 
 
 
Restricted share unit plan (note 8(c)) (in shares)
 
(13,259)
 
 
 
 
 
 
Balance at Dec. 31, 2010
3,665,450 
3,078,217 
78,554 
24,858 
15,166 
440,265 
28,390 
 
Balance (in shares) at Dec. 31, 2010
 
168,720,355 
 
 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
 
 
Shares issued under Employee Stock Option Plan (note 8(a))
 
18,094 
(4,396)
 
 
 
 
 
Shares issued under Employee Stock Option Plan (note 8(a)) (in shares)
 
308,688 
 
 
 
 
 
 
Stock options
 
 
43,536 
 
 
 
 
 
Shares issued under the Incentive Share Purchase Plan (note 8(b))
 
19,229 
 
 
 
 
 
 
Shares issued under the Incentive Share Purchase Plan (note 8(b)) (in shares)
 
360,833 
 
 
 
 
 
 
Shares issued under the Company's dividend reinvestment plan
 
10,130 
 
 
 
 
 
 
Shares issued under the Company's dividend reinvestment plan (in shares)
 
176,110 
 
 
 
 
 
 
Shares issued for purchase of mining property (note 7(c) and (d))
 
56,146 
 
 
 
 
 
 
Shares issued for purchase of mining property (note 7(c) and (d)) (in shares)
 
1,250,477 
 
 
 
 
 
 
Non-controlling interest addition upon acquisition
 
 
 
 
 
 
 
12,251 
Net income (loss) for the year attributed to common shareholders
(568,895)
 
 
 
 
(568,895)
 
 
Net loss for the year attributed to non-controlling interest
60 
 
 
 
 
 
 
(60)
Dividends declared (nil, $0.64 and $0.18 per share for the year 2011, 2010 and 2009) (note 7(a))
 
 
 
 
 
(391)
 
 
Other comprehensive income (loss) for the year
(35,496)
 
 
 
 
 
(35,496)
 
Restricted share unit plan (note 8(c))
 
(435)
 
 
 
 
 
 
Restricted share unit plan (note 8(c)) (in shares)
 
(2,727)
 
 
 
 
 
 
Balance at Dec. 31, 2011
$ 3,215,163 
$ 3,181,381 
$ 117,694 
$ 24,858 
$ 15,166 
$ (129,021)
$ (7,106)
$ 12,191 
Balance (in shares) at Dec. 31, 2011
 
170,813,736 
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical)
1 Months Ended 12 Months Ended
Feb. 28, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 
 
 
 
Dividends declared (in dollars per share)
$ 0.2 
$ 0 
$ 0.64 
$ 0.18 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Operating activities
 
 
 
Net income (loss) for the year
$ (568,955)
$ 332,116 
$ 86,538 
Add (deduct) items not affecting cash
 
 
 
Impairment loss on Meadowbank mine
907,681 
 
 
Amortization of property, plant and mine development
261,781 
192,486 
72,461 
Deferred income and mining taxes
(275,773)
66,928 
20,309 
Loss on Goldex mine
302,893 
 
 
Environmental remediation
(7,616)
 
 
Gain on sale of available-for-sale securities
(4,907)
(19,487)
(10,142)
Stock-based compensation
48,150 
41,635 
28,753 
Gain on acquisition of Comaplex Minerals Corp. (note 10)
 
(64,508)
 
Foreign currency translation loss (gain)
(1,082)
19,536 
39,831 
Other
31,561 
13,015 
(5,214)
Changes in non-cash working capital balances
 
 
 
Trade receivables
37,050 
(19,378)
(47,930)
Income taxes (payable) recoverable
(29,867)
9,949 
(313)
Inventories
(43,066)
(91,306)
(90,772)
Other current assets
(25,838)
(28,729)
4,834 
Accounts payable and accrued liabilities
31,837 
23,136 
28,552 
Prepaid royalty
 
 
(13,321)
Interest payable
(387)
8,077 
1,520 
Cash provided by operating activities
663,462 
483,470 
115,106 
Investing activities
 
 
 
Additions to property, plant and mine development
(482,831)
(511,641)
(657,175)
Acquisition of Grayd Resource Corporation, net of cash acquired (note 10)
(163,047)
 
 
Decrease (increase) in short-term investments
(3,262)
(3,313)
Net proceeds on available-for-sale securities
9,435 
36,586 
48,258 
Purchase of available-for-sale securities
(91,115)
(42,479)
(6,380)
Decrease (increase) in restricted cash
(32,931)
(2,510)
30,999 
Cash used in investing activities
(760,484)
(523,306)
(587,611)
Financing activities
 
 
 
Dividends paid
(98,354)
(26,830)
(27,132)
Repayment of capital lease obligations
(13,092)
(16,019)
(13,177)
Sale-leaseback financing
 
14,017 
21,389 
Proceeds from long-term debt
475,000 
1,311,000 
625,000 
Repayment of long-term debt
(205,000)
(1,376,000)
(110,000)
Credit facility financing costs
(2,545)
(12,772)
(4,784)
Common shares issued
26,536 
84,659 
68,522 
Cash provided by (used in) financing activities
182,545 
(21,945)
559,818 
Effect of exchange rate changes on cash and cash equivalents
(1,636)
(2,939)
4,585 
Net increase (decrease) in cash and cash equivalents during the year
83,887 
(64,720)
91,898 
Cash and cash equivalents, beginning of year
95,560 
160,280 
68,382 
Cash and cash equivalents, end of year
179,447 
95,560 
160,280 
Supplemental cash flow information
 
 
 
Interest paid
52,833 
41,429 
17,189 
Income and mining taxes paid
$ 110,889 
$ 25,199 
$ 8,792 
TRADE RECEIVABLES AND REVENUES FROM MINING OPERATIONS
TRADE RECEIVABLES AND REVENUES FROM MINING OPERATIONS

1.     TRADE RECEIVABLES AND REVENUES FROM MINING OPERATIONS

  • Agnico-Eagle is a gold mining company with mining operations in Canada, Finland and Mexico. The Company earns a significant proportion of its revenues from the production and sale of gold in both dore bar and concentrate form. The remainder of revenue and cash flow is generated by the production and sale of byproduct metals. The revenue from byproduct metals is mainly generated by production at the LaRonde mine in Canada (silver, zinc, copper and lead) and the Pinos Altos mine in Mexico (silver).

    Revenues are generated from operations in Canada, Finland and Mexico. The cash flow and profitability of the Company's operations are significantly affected by the market price of gold and, to a lesser extent, silver, zinc, copper and lead. The prices of these metals can fluctuate widely and are affected by numerous factors beyond the Company's control.

    As gold can be sold through numerous gold market traders worldwide, the Company is not economically dependent on a limited number of customers for the sale of its product.

    Trade receivables are recognized once the transfer of ownership for the metals sold has occurred and reflect the amounts owing to the Company in respect of its sales of dore bars or concentrates to third parties prior to the satisfaction in full of the payment obligations of the third parties.

   
  2011   2010  
 

Dore bars awaiting settlement

  $   $ 24,281  
 

Concentrates awaiting settlement

    75,899     88,668  
             
 

 

  $ 75,899   $ 112,949  
             

 

   
  2011   2010   2009  
 

Revenues from mining operations:

                   
 

Gold

  $ 1,563,760   $ 1,216,249   $ 474,875  
 

Silver

    171,725     104,544     59,155  
 

Zinc

    70,522     77,544     57,034  
 

Copper

    14,451     22,219     22,571  
 

Lead

    1,341     1,965     127  
                 
 

 

  $ 1,821,799   $ 1,422,521   $ 613,762  
                 
  • In 2011, precious metals (gold and silver) accounted for 95% of Agnico-Eagle's revenues from mining operations (2010 — 93%; 2009 — 87%). The remaining revenues from mining operations consisted of net byproduct metals revenues. In 2011, these net byproduct metals revenues as a percentage of total revenues from mining operations were 4% from zinc (2010 — 5%; 2009 — 9%) and 1% from copper (2010 — 2%; 2009 — 4%).

OTHER ASSETS
OTHER ASSETS

2.     OTHER ASSETS

  • (a)
    Other current assets

   
  2011   2010  
 

Federal, provincial and other sales taxes receivable

  $ 51,603   $ 63,553  
 

Prepaid expenses

    25,540     10,449  
 

Meadowbank insurance receivable

    8,765      
 

Prepaid royalty(i)

    7,684     5,282  
 

Employee loans receivable

    5,567     4,498  
 

Other

    11,210     5,191  
 

Government refundables for local community improvements

        803  
             
 

 

  $ 110,369   $ 89,776  
             

    • (i)
      The prepaid royalty relates to the Pinos Altos mine in Mexico.
  • (b)
    Available-for-sale securities
    • In 2011, the Company realized proceeds of $9.4 million (2010 — $36.6 million; 2009 — $41.0 million) and recognized a gain before income taxes of $4.9 million (2010 — $19.5 million; 2009 — $10.1 million) 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:

   
  2011   2010  
 

Available-for-sale securities in an unrealized gain position

             
 

Cost (net of impairments)

  $ 127,344   $ 50,958  
 

Unrealized gains in accumulated other comprehensive income

    16,408     48,151  
             
 

Estimated fair value

    143,752     99,109  
             
 

Available-for-sale securities in an unrealized loss position

             
 

Cost (net of impairments)

    1,717      
 

Unrealized losses in accumulated other comprehensive income

    (58 )    
             
 

Estimated fair value

    1,659      
             
 

Total estimated fair value of available-for-sale securities

  $ 145,411   $ 99,109  
             
    • The Company's investments in available-for-sale securities consist primarily of investments in common shares of entities in the mining industry. During the course of the year, 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. As a result of these evaluations, the Company wrote down certain available-for-sale securities by $8.6 million during the year ended December 31, 2011 that were considered other-than-temporarily impaired.

      For the remainder of the investments after the other-than-temporary impairment write-downs approximately 1.1% of the total fair value of investments are in an unrealized loss position. At December 31, 2011, the fair value of investments in an unrealized loss position was $1.7 million with a total unrealized loss of $0.1 million. The Company also evaluated these securities in relation to the severity and duration (less than six months in all cases) of the impairment. Based on that evaluation and the Company's ability and intent to hold those investments for a reasonable period of time sufficient for a forecasted recovery of fair value, the Company does not consider those investments to be other-than-temporarily impaired as at December 31, 2011.

    (c)
    Other assets

   
  2011   2010  
 

Deferred financing costs, less accumulated amortization of $5,809 (2010 — $2,249)

  $ 15,777   $ 16,780  
 

Long-term ore in stockpile(i)

    64,392     27,409  
 

Prepaid royalty(ii)

        8,777  
 

Other

    7,879     8,536  
             
 

 

  $ 88,048   $ 61,502  
             

    • (i)
      Due to the structure of the Goldex mine, Pinos Altos mine, Kittila mine, and Meadowbank mine ore bodies, a significant amount of drilling and blasting is incurred in the early years of its mine life resulting in a long-term stockpile. The value of the stockpile at December 31, 2011 is nil (2010 — $15.0 million) for the Goldex mine, $7.1 million (2010 — $12.4 million) for the Pinos Altos mine, $8.0 million (2010 — nil) for the Kittila mine and $49.3 million (2010 — nil) for the Meadowbank mine.

      (ii)
      The prepaid royalty relates to the Pinos Altos mine in Mexico.
PROPERTY, PLANT AND MINE DEVELOPMENT
PROPERTY, PLANT AND MINE DEVELOPMENT

3.     PROPERTY, PLANT AND MINE DEVELOPMENT

   
  2011   2010  
   
  Cost   Accumulated
Amortization
  Net Book
Value
  Cost   Accumulated
Amortization
  Net Book
Value
 
 

Mining properties

  $ 1,228,523 (i) $ 111,567   $ 1,116,956   $ 1,885,476 (i) $ 44,823   $ 1,840,653  
 

Plant and equipment

    2,467,300     437,706     2,029,594     2,123,191     321,907     1,801,284  
 

Mine development costs

    869,746     190,399     679,347     853,927     171,869     682,058  
 

Construction in Progress:

                                     
 

LaRonde mine extension

                185,905         185,905  
 

Creston Mascota deposit at Pinos Altos

                54,663         54,663  
 

Meliadine project

    69,458         69,458              
                             
 

 

  $ 4,635,027   $ 739,672   $ 3,895,355   $ 5,103,162   $ 538,599   $ 4,564,563  
                             

  • (i)
    The decline in mining properties' cost between 2010 and 2011 is primarily attributed to the loss on Goldex mine (note 17) and the impairment loss on Meadowbank mine (note 18) recorded during 2011.
  • Geographic Information

   
  2011   2010  
 

Canada

  $ 2,433,527   $ 3,456,809  
 

Europe

    674,258     605,283  
 

Latin America

    776,892     500,211  
 

USA

    10,678     2,260  
             
 

Total

  $ 3,895,355   $ 4,564,563  
             
  • In 2011, Agnico-Eagle capitalized $0.1 million of costs (2010 — $0.3 million) and recognized $0.8 million of amortization expense (2010 — $0.8 million) related to computer software. The unamortized capitalized cost for computer software at the end of 2011 was $4.4 million (2010 — $5.0 million).

    The unamortized capitalized cost for leasehold improvements at the end of 2011 was $3.2 million (2010 — $3.3 million), which is being amortized on a straight-line basis over the life term of the lease plus one renewal period.

    The amortization of assets recorded under capital leases is included in the "Amortization of property, plant and mine development" component in the consolidated statements of income (loss).

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 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 sets out the Company's financial assets and liabilities measured at fair value within the fair value hierarchy:

   
  Total   Level 1   Level 2   Level 3  
 

Financial assets:

                         
 

Cash equivalents and short-term investments

  $ 7,645   $   $ 7,645 (i) $  
 

Available-for-sale securities

    145,411     142,490 (ii)   2,921 (iii)    
 

Trade receivables

    75,899         75,899 (iv)    
                     
 

 

  $ 228,955   $ 142,490   $ 86,465   $  
                     
 

Financial liabilities:

                         
 

Fair value of derivative financial instruments(iii)

  $ 4,404   $   $ 4,404   $  
                     

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

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

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

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

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

    In the event that a decline in the fair value of an investment occurs and the decline in value is considered to be other-than-temporary, an impairment charge is recorded in the 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.

LONG-TERM DEBT
LONG-TERM DEBT

5.     LONG-TERM DEBT

  • The Company entered into a credit agreement on January 10, 2008 with a group of financial institutions relating to a new $300 million unsecured revolving credit facility (the "First Credit Facility"). The Company's previous $300 million secured revolving credit facility was terminated. The First Credit Facility was scheduled to mature on January 10, 2013. However, the Company, with the consent of lenders representing 662/3% of the aggregate commitments under the facility, had the option to extend the term of this facility for additional one-year terms.

    On September 4, 2008, the Company entered into a further credit agreement with a separate group of financial institutions relating to an additional $300 million unsecured revolving credit facility (the "Second Credit Facility"). The Second Credit Facility was scheduled to mature on September 4, 2010.

    On June 15, 2009, the Company amended and restated the First Credit Facility and the Second Credit Facility. The amount available under the Second Credit Facility was increased by $300 million to $600 million, and the scheduled maturity date was extended to June 2012.

    On June 22, 2010, the Company terminated the First Credit Facility and amended and restated the Second Credit Facility to increase the amount available to $1.2 billion and extend the scheduled maturity date to June 22, 2014 (as so amended and restated, the "Credit Facility").

    On August 4, 2011, the Company amended and restated the 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, 2014 to June 22, 2016.

    Payment and performance of the Company's obligations under the Credit Facility is guaranteed by all material and certain other subsidiaries of the Company (the "Guarantors"). 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 minimum value as well as a minimum tangible net worth. At December 31, 2011, the Credit Facility was drawn down by $320 million (2010 — $50 million). This drawdown, together with outstanding letters of credit under the Credit Facility, decrease the amounts available under the Credit Facility such that $849.4 million was available for future drawdowns at December 31, 2011.

    In addition, on June 2, 2009, Agnico-Eagle executed an unsecured C$95 million financial security issuance agreement with Export Development Canada. This agreement matures in June 2014 and is used to provide letters of credit for environmental obligations or in relation to licence or permit bonds relating to the Meadowbank mine. As at December 31, 2011, outstanding letters of credit drawn against this agreement totalled C$79.6 million (2010 — C$75.6 million).

    On April 7, 2010, the Company closed a private placement of an aggregate $600 million of guaranteed senior unsecured notes due in the years 2017, 2020 and 2022 (the "Notes") with a weighted average maturity of 9.84 years and weighted average yield of 6.59%. Net proceeds from the offering of the Notes were used to repay amounts owed under the Company's then existing credit facilities. Payment and performance of the Company's obligations under the Notes is guaranteed by the Guarantors. The 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 the Guarantors to incur indebtedness. The Notes also require the Company to maintain the same financial ratios and same minimum tangible net worth as under the Credit Facility. The Notes and the Credit Facility rank equally in seniority.

    The following are the individual series of the issued Notes:

   
  Principal   Interest Rate   Maturity Date  
 

Series A

  $ 115,000     6.13%     7/4/2017  
 

Series B

    360,000     6.67%     7/4/2020  
 

Series C

    125,000     6.77%     7/4/2022  
                     
 

 

  $ 600,000              
                     
  • For the year ended December 31, 2011, total interest expense was $55.0 million (2010 — $49.5 million; 2009 — $8.4 million) and total cash interest payments were $52.8 million (2010 — $41.4 million; 2009 — $17.2 million). In 2011, cash interest on the Credit Facility was $1.7 million (2010 — $12.3 million; 2009 — $14.0 million), cash standby fees on the Credit Facility was $8.6 million (2010 — $6.7 million; 2009 — $2.4 million), and cash interest on the Notes was $39.5 million (2010 — $19.8 million, 2009 — n/a). In 2011, $1.0 million (2010 — $4.6 million; 2009 — $15.5 million) of the total interest expense was capitalized to construction in progress.

    The Company's weighted average interest rate on all of its long-term debt as at December 31, 2011 was 5.02% (2010 — 5.43%).

RECLAMATION PROVISION AND OTHER LIABILITIES
RECLAMATION PROVISION AND OTHER LIABILITIES

6.     RECLAMATION PROVISION AND OTHER LIABILITIES

  • Reclamation provision and other liabilities consist of the following:

   
  2011   2010  
 

Reclamation and closure costs (note 6(a))

  $ 105,443   $ 91,641  
 

Long-term portion of capital lease obligations (note 13(a))

    26,184     38,019  
 

Pension benefits (note 6(c))

    13,991     11,307  
 

Goldex mine government grant and other (note 6(b))

    370     4,569  
             
 

Total

  $ 145,988   $ 145,536  
             
  • (a)
    Reclamation and closure costs
    • Reclamation estimates are based on current legislation, third party estimates, management's estimates and feasibility study calculations.

      Due to the suspension of mining operations at the Goldex mine on October 19, 2011, an environmental remediation liability was recognized (note 17), of which $26.1 million was classified as a current liability. The remainder of the Goldex mine environmental remediation liability along with the Company's other accrued reclamation and closure costs are long-term in nature and thus no portion of these costs has been reclassified to current liabilities.

      The following table reconciles the beginning and ending carrying amounts of asset retirement obligations and environmental remediation liabilities:

   
  2011   2010  
 

Asset retirement obligations, beginning of year

  $ 91,641   $ 62,847  
 

Current year additions and changes in estimate, net

    9,653     23,058  
 

Current year accretion

    4,953     3,176  
 

Liabilities settled

        (277 )
 

Foreign exchange revaluation

    (804 )   2,837  
             
 

Asset retirement obligations and environmental remediation liabilities, end of year

  $ 105,443   $ 91,641  
             
  • (b)
    Goldex mine government grant and other
    • The Company has received funds (the "Grant") from the Quebec government in respect of the construction of the Goldex mine. The Company has agreed to repay a portion of the Grant to the Quebec government, to a maximum amount of 50% of the Grant. The repayment amount is calculated and paid annually for fiscal years 2010, 2011 and 2012 if the agreed criteria are met. For each of these three years, if the yearly average gold price is higher than $620 per ounce, 50% of the Grant must be repaid.

      For fiscal year 2010, the agreed criteria had been met and the Company recorded a current liability of $1.5 million as of December 31, 2010. This amount was paid to the Quebec government in 2011.

      For fiscal year 2011, the agreed criteria had also been met and the Company recorded a current liability of $1.5 million as of December 31, 2011. This amount is to be paid to the Quebec government in 2012 at which time the Grant will have been repaid in full.

    (c)
    Pension benefits
    • Agnico-Eagle provides the Executives Plan for certain senior officers. The funded status of the Executives Plan is based on actuarial valuations performed as of July 1, 2011 and projected to December 31, 2013.

      The components of Agnico-Eagle's net pension plan expense are as follows:

   
  2011   2010   2009  
 

Service cost — benefits earned during the year

  $ 996   $ 981   $ 509  
 

Interest cost on projected benefit obligation

    663     613     448  
 

Amortization of net transition asset, past service liability and net experience gains

    171     164     148  
 

Prior service cost

    26     25     23  
 

Recognized net actuarial loss (gain)

    245         (142 )
                 
 

Net pension plan expense

  $ 2,101   $ 1,783   $ 986  
                 
    • Assets for the Executives Plan consist of deposits on hand with regulatory authorities which are refundable when benefit payments are made or on the ultimate wind-up of the plan. The accumulated benefit obligation for this plan at December 31, 2011 was $11.4 million (2010 — $9.6 million). At the end of 2011, the remaining unamortized net transition obligation was $0.5 million (2010 — $0.7 million) for the Executives Plan.

      The following table provides the net amounts recognized in the consolidated balance sheets as at December 31 relating to the Executives Plan:

   
  2011   2010  
 

Accrued employee benefit liability

  $ 7,292   $ 6,634  
 

Accumulated other comprehensive income:

             
 

Initial transition obligation

    500     681  
 

Past service liability

    76     104  
 

Net experience losses

    3,550     2,179  
             
 

Net liability

  $ 11,418   $ 9,598  
             
    • The following table provides the components of the expected recognition in 2012 of amounts in accumulated other comprehensive income relating to the Executives Plan:

 

Transition obligation

  $ 166  
 

Past service cost

    25  
 

Net actuarial loss

    704  
         
 

 

  $ 895  
         
    • The funded status of the Executives Plan for 2011 and 2010 is as follows:

   
  2011   2010  
 

Reconciliation of the market value of plan assets

             
 

Fair value of plan assets, beginning of year

  $ 2,443   $ 1,635  
 

Agnico-Eagle's contribution

    1,156     1,397  
 

Benefit payments

    (578 )   (699 )
 

Effect of exchange rate changes

    (69 )   110  
             
 

Fair value of plan assets, end of year

    2,952     2,443  
             
 

Reconciliation of projected benefit obligation

             
 

Projected benefit obligation, beginning of year

    12,041     7,998  
 

Service cost

    996     981  
 

Interest cost

    663     613  
 

Actuarial losses

    1,704     2,718  
 

Benefit payments

    (696 )   (812 )
 

Effect of exchange rate changes

    (338 )   543  
             
 

Projected benefit obligation, end of year

    14,370     12,041  
             
 

Deficiency of plan assets compared with projected benefit obligation

  $ (11,418 ) $ (9,598 )
             
 

Comprised of:

             
 

Unamortized transition liability

  $ (500 ) $ (681 )
 

Unamortized net experience loss

    (3,626 )   (2,283 )
 

Accrued liabilities

    (7,292 )   (6,634 )
             
 

 

  $ (11,418 ) $ (9,598 )
             
 

Weighted average discount rate — net periodic pension cost

    5.20 %   7.00 %
 

Weighted average discount rate — projected benefit obligation

    4.45 %   5.20 %
 

Weighted average expected long-term rate of return

    n/a     n/a  
 

Weighted average rate of compensation increase

    3.00 %   3.00 %
 

Estimated average remaining service life for the plan (in years)(i)

    3.0     4.0  

    • (i)
      Estimated average remaining service life for the Executives Plan was developed for individual senior officers.
    • The estimated benefits to be paid from the Executives Plan in the next ten years are presented below:

 

2012

  $ 415  
 

2013

  $ 472  
 

2014

  $ 469  
 

2015

  $ 465  
 

2016

  $ 461  
 

2017 – 2021

  $ 2,229  
    • In addition to the Executives Plan, the Company also has a basic pension plan (the "Basic Plan") and a supplemental pension plan. Under the Basic Plan, Agnico-Eagle contributes 5% of certain employee's base employment compensation to a defined contribution plan. The expense in 2011 was $10.7 million (2010 — $8.8 million; 2009 — $6.5 million). Effective January 1, 2008 the Company adopted the supplemental plan for designated executives at the level of Vice-President or above. Under this plan, an additional 10% of the designated executive's earnings for the year (including salary and short-term bonus) is contributed by the Company. In 2011, $0.9 million (2010 — $1.1 million; 2009 — $0.9 million) was contributed to the supplemental plan. The supplemental plan is accounted for as a cash balance plan.

SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY

7.     SHAREHOLDERS' EQUITY

  • (a)
    Common shares
    • The Company's authorized share capital includes an unlimited number of common shares with issued common shares of 170,859,604 (2010 — 168,763,496), less 45,868 common shares held by a trust in connection with the Company's restricted share unit ("RSU") plan (2010 — less 43,141 common shares). The trust is treated as a variable interest entity and, as a result, its holdings of shares are offset against the Company's issued shares in the consolidation (note 7(c)).

      In 2011, the Company declared dividends on its common shares of nil per share (2010 — $0.64 per share; 2009 — $0.18 per share).

    (b)
    Flow-through common share private placements
    • In 2011, Agnico-Eagle issued nil (2010 — nil; 2009 — 358,900) common shares under flow-through share private placements, which increased share capital by nil (2010 — nil; 2009 — $19.2 million), net of share issue costs. Effective December 31, 2011, the Company renounced to its investors nil (2010 — nil; 2009 — C$30.6 million) of such expenses for income tax purposes. The Company does not have an obligation to incur any exploration expenditures related to the expenditures previously renounced.

      The difference between the flow-through share issuance price and the market price of Agnico-Eagle's shares at the time of purchase is recorded as a liability at the time the flow-through shares are issued. This liability terminates when the exploration expenditures are renounced to investors. The difference between the flow-through share issuance price and market price reduces the deferred tax expense charged to income as this difference represents proceeds received by the Company for the sale of deferred tax deductions to investors in the flow-through shares.

    (c)
    Private placements and warrants
    • On December 3, 2008, the Company closed a private placement of 9.2 million units. Each unit consisted of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share of the Company at a price of $47.25 per share at any time during the five-year term of the warrant. As consideration for the lead purchaser's commitment, the Company issued to the lead purchaser an additional 4 million warrants. The net proceeds of the private placement were approximately $281 million, after deducting share issue costs of $8.8 million. If all outstanding warrants are exercised, the Company would issue an additional 8.6 million common shares. No warrants have been exercised as of December 31, 2011.

      On May 26, 2009, the Company issued 15,825 shares with a market value of $0.9 million in connection with the acquisition of a 100% participating interest in 52 mining claims, located in the Abitibi region of Quebec.

      On July 24, 2009, the Company issued 18,000 shares upon payment of the exercise price of $500 in connection with the exercise of an option granted by a predecessor to the Company relating to the acquisition of certain properties related to the Goldex mine.

      On July 26, 2010, the Company issued 15,000 shares with a market value of $0.8 million in connection with the purchase of mining property.

    (d)
    Public issuance of common shares
    • There were no public issuances of common shares in 2009.

      On July 6, 2010, the Company issued 10,210,848 shares with a market value of $579.0 million in connection with the acquisition of Comaplex Minerals Corp. ("Comaplex") (note 10).

      On November 18, 2011, the Company issued 1,250,477 shares with a market value of $56.1 million in connection with the acquisition of Grayd Resource Corporation ("Grayd") (note 10).

    (e)
    Accumulated other comprehensive income (loss)
    • The cumulative translation adjustment in accumulated other comprehensive income (loss) in 2011 and 2010 of $(16.2) million resulted from Agnico-Eagle changing to the US dollar as its principal currency of measurement. Prior to this change, the Canadian dollar had been used as the reporting currency. Prior periods' consolidated financial statements were translated into US dollars by the current rate method using the year end or the annual average exchange rate where appropriate. This translation approach was applied from January 1, 1994. This translation gave rise to a deficit in the cumulative translation adjustment account within accumulated other comprehensive income (loss) as at December 31, 2011 and December 31, 2010.

      The following table sets out the components of accumulated other comprehensive income (loss), net of related tax effects:

   
  2011   2010  
 

Cumulative translation adjustment from electing US dollar as principal reporting currency

  $ (16,206 ) $ (16,206 )
 

Unrealized net gain on available-for-sale securities

    16,350     48,151  
 

Unrealized loss on derivative contracts

    (4,404 )    
 

Unrealized loss on pension liability

    (5,219 )   (4,420 )
 

Tax effect of unrealized loss on derivative contracts

    1,491      
 

Tax effect of unrealized loss on pension liability

    882     865  
             
 

 

  $ (7,106 ) $ 28,390  
             
    • In 2011, a $4.9 million gain (2010 — $19.5 million gain; 2009 — $10.1 million gain) was reclassified from accumulated other comprehensive income (loss) to net income (loss) to reflect the realization of gains on available-for-sale securities due to the disposition of those securities.

    (f)
    Net income (loss) per share
    • The following table provides the weighted average number of common shares used in the calculation of basic and diluted net income (loss) per share:

   
  2011   2010   2009  
 

Weighted average number of common shares outstanding — basic

    169,352,896     162,342,686     155,942,151  
 

Add: Dilutive impact of employee stock options

        1,192,530     1,256,103  
 

Dilutive impact of warrants

        2,263,902     1,392,752  
 

Dilutive impact of shares related to RSU plan

        43,141     29,882  
                 
 

Weighted average number of common shares outstanding — diluted

    169,352,896     165,842,259     158,620,888  
                 
    • The calculation of diluted net income (loss) per share has been computed using the treasury stock method. In applying the treasury stock method, options and warrants with an exercise price greater than the average quoted market price of the common shares, for the period outstanding, are not included in the calculation of diluted net income (loss) per share, as the effect is anti-dilutive. In 2010 and 2009, a total of 58,750 and 42,500 options, respectively, were excluded from the calculation as the effect was anti-dilutive. In 2011, the impact of any additional shares issued under the employee stock option plan, as a result of the conversion of warrants, or related to the RSU plan would be anti-dilutive as a result of the net loss position. Consequently, diluted net loss per share would be computed in the same manner as basic net loss per share.

STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

8.     STOCK-BASED COMPENSATION

  • (a)
    Employee Stock Option Plan ("ESOP")
    • The Company's ESOP provides for the granting of options to directors, officers, employees and service providers to purchase common shares. Under this plan, options are granted at the fair market value of the underlying shares on the day prior to the date of grant. The number of shares subject to option for any one person may not exceed 5% of the Company's common shares issued and outstanding at the date of grant.

      Up to May 31, 2001, the number of common shares reserved for issuance under the ESOP was 6,000,000 and options granted under the ESOP had a maximum term of ten years. On April 24, 2001, the Compensation Committee of the Board of Directors adopted a policy pursuant to which options granted after that date have a maximum term of five years. In 2001, the shareholders approved a resolution to increase the number of common shares reserved for issuance under the ESOP by 2,000,000 to 8,000,000. In 2004, 2006, 2008, 2010 and 2011, the shareholders approved a further 2,000,000, 3,000,000, 6,000,000, 1,300,000 and 3,000,000 common shares for issuance under the ESOP, respectively.

      Of the 2,630,785 options granted under the ESOP in 2011, 657,696 options vested immediately and expire in 2016. The remaining options expire in 2016 and vest in equal installments, on each anniversary date of the grant, over a three-year period. Of the 2,926,080 options granted under the ESOP in 2010, 731,520 options vested immediately and expire in 2015. The remaining options expire in 2015 and vest in equal installments, on each anniversary date of the grant, over a three-year period. Of the 2,276,000 options granted under the ESOP in 2009, 569,000 options vested immediately and expire in 2014. The remaining options expire in 2014 and vest in equal installments, on each anniversary date of the grant, over a three-year period.

      Upon the exercise of options under the ESOP, the Company issues new common shares to settle the obligation.

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

   
  2011   2010   2009  
   
  Number of
Options
  Weighted
Average
Exercise
Price
  Number of
Options
  Weighted
Average
Exercise
Price
  Number of
Options
  Weighted
Average
Exercise
Price
 
 

Outstanding, beginning of year

    6,762,704   C$ 56.94     5,707,940   C$ 53.85     4,752,440   C$ 44.57  
 

Granted

    2,630,785     76.12     2,926,080     57.55     2,276,000     62.65  
 

Exercised

    (308,688 )   43.62     (1,627,766 )   47.02     (1,238,000 )   34.28  
 

Forfeited

    (125,750 )   67.47     (243,550 )   58.03     (82,500 )   55.99  
                             
 

Outstanding, end of year

    8,959,051   C$ 62.88     6,762,704   C$ 56.94     5,707,940   C$ 53.85  
                             
 

Options exercisable at end of year

    5,178,172           2,972,857           2,445,615        
                                   
    • The following table sets out the activity with respect to Agnico-Eagle's nonvested stock options:

   
  2011  
   
  Number of
Options
  Weighted
Average Grant
Date Fair Value
 
 

Nonvested, beginning of year

    3,789,847   C$ 18.71  
 

Granted

    2,630,785   C$ 17.05  
 

Vested

    (2,537,253 ) C$ 18.40  
 

Forfeited (unvested)

    (102,500 ) C$ 17.77  
             
 

Nonvested, end of year

    3,780,879   C$ 17.79  
             
    • Cash received for options exercised in 2011 was $13.6 million (2010 — $74.7 million; 2009 — $36.6 million).

      The total intrinsic value of options exercised in 2011 was C$8.0 million (2010 — C$46.5 million; 2009 — C$43.8 million).

      The weighted average grant date fair value of options granted in 2011 was C$17.05 (2010 — C$16.31; 2009 — C$24.52). The total fair value of options vested during 2011 was $46.7 million (2010 — $36.7 million; 2009 — $27.4 million). The following table summarizes information about Agnico-Eagle's stock options outstanding and exercised at December 31, 2011:

   
  Options Outstanding   Options Exercisable  
 
Range of Exercise Prices
  Number
Outstanding
  Weighted
Average
Remaining
Contractual Life
  Weighted
Average
Exercise Price
  Number
Excercisable
  Weighted
Average
Exercise Price
 
 

C$23.02 — C$36.23

    16,000     1.84 years   C$ 33.26     16,000   C$ 33.26  
 

C$39.18 — C$59.71

    4,361,866     2.00 years     54.94     3,070,576     54.17  
 

C$60.72 — C$83.08

    4,581,185     3.16 years     70.55     2,091,596     67.22  
                         
 

C$23.02 — C$83.08

    8,959,051     2.59 years   C$ 62.88     5,178,172   C$ 59.38  
                         
    • The weighted average remaining contractual term of options exercisable at December 31, 2011 was 2.6 years.

      The Company has reserved for issuance 8,959,051 common shares in the event that these options are exercised.

      The number of shares available for the granting of options as at December 31, 2011, 2010 and 2009 was 3,262,135, 2,771,420 and 4,155,750, respectively.

      Subsequent to the year ended December 31, 2011 and on January 3, 2012, 3,072,000 options were granted under the ESOP, of which 768,000 options vested immediately and expire in the year 2017. The remaining options expire in 2017 and vest in equal installments on each anniversary date of the grant, over a three-year period.

      Agnico-Eagle estimated the fair value of options under the Black-Scholes option pricing model using the following weighted average assumptions:

   
  2011   2010   2009  
 

Risk-free interest rate

    1.95%     1.86%     1.27%  
 

Expected life of options (in years)

    2.5     2.5     2.5  
 

Expected volatility of Agnico-Eagle's share price

    34.70%     43.80%     64.00%  
 

Expected dividend yield

    0.89%     0.42%     0.42%  
    • The Company uses historical volatility in estimating the expected volatility of Agnico-Eagle's share price. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination experience.

      The aggregate intrinsic value of options outstanding at December 31, 2011 was C$(231.4) million. The aggregate intrinsic value of options exercisable at December 31, 2011 was C$(115.6) million.

      The total compensation expense for the ESOP recognized in the general and administrative line item of the consolidated statements of income (loss) for the current year was $42.2 million (2010 — $37.8 million; 2009 — $27.7 million). The total compensation cost related to non-vested options not yet recognized is $32.8 million as of December 31, 2011 and the weighted average period over which it is expected to be recognized is 1.7 years. Of the total compensation cost for the ESOP, $1.4 million was capitalized as part of property, plant and mine development in 2011 (2010 — $1.3 million; 2009 — $8.7 million).

    (b)
    Incentive Share Purchase Plan
    • On June 26, 1997, the shareholders approved an incentive share purchase plan (the "Purchase Plan") to encourage directors, officers and employees ("Participants") to purchase Agnico-Eagle's common shares at market value. In 2009, the Purchase Plan was amended to remove non-executive directors as eligible Participants in the plan.

      Under the Purchase Plan, Participants may contribute up to 10% of their basic annual salaries, and the Company contributes an amount equal to 50% of each Participant's contribution. All shares subscribed for under the Purchase Plan are newly issued by the Company. The total compensation cost recognized in 2011 related to the Purchase Plan was $6.4 million (2010 — $5.0 million; 2009 — $3.8 million).

      In 2011, 360,833 common shares were subscribed for under the Purchase Plan (2010 — 229,583; 2009 — 196,649) for a value of $19.2 million (2010 — $15.0 million; 2009 — $11.3 million). In May 2008, shareholders approved an increase in the maximum number of shares reserved for issuance under the Purchase Plan to 5,000,000 from 2,500,000. As at December 31, 2011, Agnico-Eagle has reserved for issuance 2,150,088 common shares (2010 — 2,510,921; 2009 — 2,740,504) under the Purchase Plan.

    (c)
    Restricted Share Unit Plan
    • In 2009, the Company implemented the RSU plan for certain employees. A deferred compensation balance was recorded for the total grant date value on the date of grant. The deferred compensation balance was recorded as a reduction of shareholders' equity and is being amortized as compensation expense (or capitalized to construction in progress) over the applicable vesting period of two years.

      The Company funded the plan by transferring $3.7 million (2010 — $4.0 million; 2009 — $3.0 million) to an employee benefit trust (the "Trust") that then purchased shares of the Company in the open market. Compensation cost for RSUs 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 ESOP forfeiture rates. For 2009 through 2011, 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 being outstanding for the basic earnings per share ("EPS") calculations. They are amortized back into basic EPS over the vesting period. All of the shares held by the Trust were excluded from the diluted EPS calculations as they were anti-dilutive for 2011 due to the net loss position. The shares held by the trust were included in previous period diluted EPS calculations.

      Compensation cost related to the RSU plan was $3.3 million in 2011 (2010 — $3.0 million), with nil (2010 — $0.1 million) being capitalized to the "Property, plant and mine development" line item in the consolidated balance sheets. The $3.3 million (2010 — $2.9 million) of compensation expense is included as components of the Production, General and administrative, and Exploration and corporate development line items of the consolidated statements of income (loss), consistent with the classification of other elements of compensation expense for those employees who held RSUs.

INCOME AND MINING TAXES
INCOME AND MINING TAXES

9.     INCOME AND MINING TAXES

        Income and mining taxes expense (recovery) is made up of the following geographic components:

   
  2011   2010   2009  
 

Current provision

                   
 

Canada

  $ 58,752   $ 34,217   $ 1,171  
 

Mexico

    3,496     1,942      
 

Finland

    222          
                 
 

 

    62,470     36,159     1,171  
                 
 

 

                   
 

Deferred provision (recovery)

                   
 

Canada

    (337,408 )   47,083     27,083  
 

Mexico

    54,996     18,759      
 

Finland

    10,269     1,086     (6,754 )
                 
 

 

    (272,143 )   66,928     20,329  
                 
 

 

  $ (209,673 ) $ 103,087   $ 21,500  
                 
  • Cash income and mining taxes paid in 2011 were $110.9 million (2010 — $25.2 million; 2009 — $8.8 million).

    The income and mining taxes expense (recovery) is different from the amount that would have been computed by applying the Canadian statutory income tax rate as a result of the following:

   
  2011   2010   2009  
 

Combined federal and composite provincial tax rates

    27.8%     29.6%     30.9%  
 

Increase (decrease) in tax rates resulting from:

                   
 

Provincial mining duties

    5.9     6.8     16.1  
 

Tax law change

    (2.7)     (5.1)     (24.4)  
 

Impact of foreign tax rates

    (0.2)     (0.5)     (4.9)  
 

Permanent differences

    (1.6)     (4.2)     2.2  
 

Valuation allowance

    (0.3)     (0.2)      
 

Effect of changes in income tax rates

    (2.0)     (2.7)      
                 
 

Actual rate as a percentage of pre-tax income

    26.9%     23.7%     19.9%  
                 
  • As at December 31, 2011 and December 31, 2010, Agnico-Eagle's deferred income and mining tax assets and liabilities were as follows:

   
  2011   2010  
   
  (Assets)/
Liabilities
  (Assets)/
Liabilities
 
 

Mining properties

  $ 704,379   $ 966,485  
 

Net operating and capital loss carry forwards

    (104,332 )   (133,042 )
 

Mining duties

    (88,670 )   (71,492 )
 

Reclamation provisions

    (51,926 )   (30,752 )
 

Valuation allowance

    39,121     4,855  
             
 

Deferred income and mining tax liabilities

  $ 498,572   $ 736,054  
             
  • All of Agnico-Eagle's deferred income tax assets and liabilities were denominated in the local currency based on the jurisdiction in which the Company paid taxes, except for Canada, and were translated into US dollars using the exchange rate in effect at the consolidated balance sheet dates. For Canadian income tax purposes, for December 31, 2008 and subsequent years, the Company elected to use the US dollar as its functional currency.

    The Company operates in different jurisdictions and, accordingly, it is subject to income and other taxes under the various tax regimes in the countries in which it operates. The tax rules and regulations in many countries are highly complex and subject to interpretation. The Company may be subject in the future to a review of its historic income and other tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules and regulations to the Company's business conducted within the country involved.

    A reconciliation of the beginning and ending amounts of the unrecognized tax benefits is as follows:

   
  2011   2010  
 

Unrecognized tax benefits, beginning of year

  $ 1,630   $ 5,608  
 

Reductions

    (430 )   (3,978 )
             
 

Unrecognized tax benefit, end of year

  $ 1,200   $ 1,630  
             
  • The full amount of unrecognized tax benefits, if recognized, would reduce the Company's annual effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

    The Company is subject to taxes in the following significant jurisdictions: Canada, Mexico, Sweden and Finland, each with varying statutes of limitations. The 2007 through 2011 taxation years generally remain subject to examination.

ACQUISITIONS
ACQUISITIONS

10.   ACQUISITIONS

  • Grayd Resource Corporation

    In September 2011, Agnico-Eagle entered into an acquisition agreement with Grayd, a Canadian-based natural resource company listed on the TSX Venture Exchange, pursuant to which the Company agreed to make an offer to acquire all of the issued and outstanding common shares of Grayd. At the time, Grayd held a 100% interest in the La India project located in the Mulatos Gold Belt of Sonora, Mexico (approximately 70 kilometers northwest of Agnico-Eagle's Pinos Altos gold mine) and had recently discovered the Tarachi exploration property located approximately ten kilometres north of the La India project. On October 13, 2011, the Company made the offer by way of a take-over bid circular, as amended and supplemented on October 21, 2011.

    On November 18, 2011, Agnico-Eagle acquired 94.77% of the outstanding shares of 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 related transaction costs associated with the acquisition totaling $3.8 million were expensed through the Interest and sundry expense (income) line of the consolidated statements of income (loss) during the fourth quarter of 2011. The Company has accounted for the purchase of Grayd as a business combination.

    Grayd owns a 100% interest in the La India project located in the Mulatos Gold Belt of Sonora, Mexico (approximately 70 kilometers northwest of Agnico-Eagle's Pinos Altos gold mine). Grayd also owns a 100% interest in the Tarachi exploration property located approximately 10 kilometers north of the La India project. The La India project hosts a National Instrument 43-101 compliant measured and indicated gold resource. This acquisition has the potential to contribute to the ongoing growth in Agnico-Eagle's gold production and cash flows.

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

 

Total purchase price:

       
 

Cash paid for acquisition

  $ 165,954  
 

Agnico-Eagle shares issued for acquisition

    56,146  
         
 

Total purchase price to allocate

  $ 222,100  
         
 

Fair value of assets acquired and liabilities assumed:

       
 

Mining properties

  $ 282,000  
 

Goodwill

    29,215  
 

Cash and cash equivalents

    2,907  
 

Trade receivables

    469  
 

Other current assets

    1,700  
 

Equipment

    56  
 

Accounts payable and accrued liabilities

    (9,767 )
 

Deferred tax liability

    (72,229 )
 

Non-controlling interest

    (12,251 )
         
 

Net assets acquired

  $ 222,100  
         
  • The Company believes that goodwill for the Grayd acquisition arose principally because of the following factors: (1) the going concern value implicit in the Company's ability to sustain and/or grow its business by increasing reserves and resources through new discoveries; and (2) the requirement to record a deferred tax liability for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed in a business combination at amounts that do not reflect fair value.

    Pro forma results of operations for Agnico-Eagle assuming the acquisition of Grayd described above had occurred as of January 1, 2010 are shown below. On a pro forma basis, there would have been no effect on Agnico-Eagle's consolidated revenues:

   
  2011   2010  
   
  Unaudited
 
 

Pro forma net income (loss) attributed to common shareholders

  $ (582,762 ) $ 324,708  
 

Pro forma net income (loss) per share — basic

  $ (3.42 ) $ 1.98  
  • Subsequent to the year ended December 31, 2011 and 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.

    Summit Gold Project

    On December 20, 2011, the Company completed the acquisition of 100% of the Summit Gold project from Columbus Gold Corporation, subject to a 2% net smelter returns mineral production royalty reserved by Cordilleran Exploration Company. The Nevada-based project's purchase price of $8.5 million, including transaction costs, was comprised entirely of cash. This transaction was accounted for as an asset acquisition.

    Comaplex Minerals Corp.

    On April 1, 2010, Agnico-Eagle and Comaplex jointly announced that they reached an agreement in principle whereby Agnico-Eagle would acquire all of the shares of Comaplex (the "Comaplex Shares") that it did not already own. The transaction was completed under a plan of arrangement under the Business Corporations Act (Alberta). Under the terms of the transaction, each shareholder of Comaplex, other than Agnico-Eagle, received 0.1576 of an Agnico-Eagle share per Comaplex share. Additionally, at closing, each Comaplex shareholder, other than Agnico-Eagle and Perfora Investments S.a.r.l. ("Perfora"), received one common share of a newly formed, wholly-owned, subsidiary of Comaplex, Geomark Exploration Ltd. ("Geomark"), in respect of each Comaplex Share and Comaplex transferred to Geomark all of the assets and related liabilities of Comaplex other than those relating to the Meliadine gold exploration properties in Nunavut, Canada. The Geomark assets included all of Comaplex's net working capital, the non-Meliadine mineral properties, all oil and gas properties and investments. Under the plan of arrangement, Comaplex changed its name to Meliadine Holdings Inc.

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

    On July 6, 2010, the transactions relating to the plan of arrangement closed and Agnico-Eagle issued a total of 10,210,848 shares to the shareholders of Comaplex, other than Agnico-Eagle, for a total value of $579.0 million. The related transaction costs associated with the acquisition totalling $7.0 million were expensed through the Interest and sundry expense (income) line of the consolidated statements of income (loss) during the third quarter of 2010. The Company has accounted for the purchase of Comaplex as a business combination.

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

 

Total purchase price:

       
 

Comaplex shares previously purchased

  $ 88,683  
 

Agnico-Eagle shares issued for acquisition

    578,955  
         
 

Total purchase price to allocate

  $ 667,638  
         
 

Fair value of assets acquired and liabilities assumed:

       
 

Property

  $ 642,610  
 

Goodwill

    200,064  
 

Supplies

    542  
 

Equipment

    2,381  
 

Asset retirement obligation

    (3,400 )
 

Deferred tax liability

    (174,559 )
         
 

Net assets acquired

  $ 667,638  
         
  • The Comaplex shares purchased prior to the April 1, 2010 announcement of the acquisition had a cost base of $24.1 million and a fair value at July 6, 2010 of $88.6 million. Upon the acquisition of Comaplex, the non-cash gain of $64.5 million on those shares within accumulated other comprehensive income (loss) was reversed into the consolidated statements of income (loss) as a gain during the third quarter of 2010.

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

    Pro forma results of operations for Agnico-Eagle assuming the acquisition of Comaplex described above had occurred as of January 1, 2009 are shown below. On a pro forma basis, there would have been no effect on Agnico-Eagle's consolidated revenues:

   
  2010   2009  
   
  Unaudited
 
 

Pro forma net income attributed to common shareholders

  $ 331,516   $ 85,371  
 

Pro forma net income per share — basic

  $ 2.04   $ 0.55  
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

11.   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

   
  2011   2010  
 

Trade payables

  $ 104,699   $ 91,974  
 

Wages payable

    27,247     21,583  
 

Accrued liabilities

    47,462     33,390  
 

Goldex mine government grant (note 6(b))

    1,452     1,485  
 

Other liabilities

    22,687     11,943  
             
 

 

  $ 203,547   $ 160,375  
             
  • In 2011 and 2010, the other liabilities balance mainly consisted of various employee payroll tax withholdings and other payroll taxes.

COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES

12.   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 December 31, 2011, the total amount of these guarantees was $119.0 million.

    Certain of the Company's properties are subject to royalty arrangements. The following are the most significant royalties:

    The Company has a royalty agreement with the Finnish government relating to the Kittila mine. Starting 12 months after the mining operations commenced, the Company is required to pay 2% on net smelter returns, defined as revenue less processing costs. The royalty is paid on a yearly basis the following year.

    The Company is committed to pay a royalty on production from the Meadowbank mine. The Nunavut Tunngavik-administered mineral claims are subject to production leases including a 12% net profits interest royalty from which annual deductions are limited to 85% of gross revenue. Production from Crown mining leases is subject to a royalty of up to 14% of adjusted net profits, as defined in the Northwest Territories and Nunavut Mining Regulations under the Territorial Lands Act (Canada).

    The Company is committed to pay a royalty on production from certain properties in the Abitibi area. The type of royalty agreements include but are not limited to net profits interest royalty and net smelter return royalty, with percentages ranging from 0.5% to 5%.

    The Company is committed to pay a royalty on production from certain properties in the Pinos Altos mine area. The type of royalty agreements include but are not limited to net profits interest royalty and net smelter return royalty, with percentages ranging from 2.5% to 3.5%.

    The Company is committed to pay a 2% royalty on future net smelter returns on the production of minerals from the Summit Gold project, acquired on December 20, 2011.

    In addition, the Company has the following purchase commitments:

   
  Purchase
Commitments
 
 

2012

  $ 11,481  
 

2013

    7,141  
 

2014

    7,853  
 

2015

    4,671  
 

2016

    4,716  
 

Subsequent years

    26,452  
         
 

Total

  $ 62,314  
 
LEASES
LEASES

13.   LEASES

  • (a)
    Capital Leases
    • In each of 2010 and 2009, the Company entered into five sale-leaseback agreements with third parties for various fixed and mobile equipment within Canada. These arrangements represent sale-leaseback transactions in accordance with ASC 840-40 — Sale-Leaseback Transactions. The sale-leaseback agreements have an average effective annual interest rate of 6.18% and the average length of the contracts is 4.5 years.

      All of the sale-leaseback agreements have end of lease clauses that qualify as bargain purchase options that the Company expects to execute. The total gross amount of assets recorded under sale-leaseback capital leases amounts to $33.6 million (2010 — $33.6 million).

      The Company has agreements with third party providers of mobile equipment that are used at the Meadowbank and Kittila mines. These arrangements represent capital leases in accordance with the guidance in ASC 840-30 — Capital Leases. The leases for mobile equipment at the Kittila mine are for 5 years and the leases for mobile equipment at the Meadowbank mine are for 5 years. The effective annual interest rate on the lease for mobile equipment at the Meadowbank mine is 5.64%. The effective annual interest rate on the lease for mobile equipment at the Kittila mine is 4.99%.

      The following is a schedule of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as at December 31, 2011:

 
Year ending December 31:
   
 
 

2012

  $ 12,714  
 

2013

    15,520  
 

2014

    8,829  
 

2015

    3,567  
 

2016

     
 

Thereafter

     
         
 

Total minimum lease payments

    40,630  
 

Less amount representing interest

    3,378  
         
 

Present value of net minimum lease payments

  $ 37,252  
         
    • The Company's capital lease obligations at December 31 are comprised of the following:

   
  2011   2010  
 

Total future lease payments

  $ 40,630   $ 54,476  
 

Less: interest

    3,378     5,865  
             
 

 

    37,252     48,611  
 

Less: current portion

    11,068     10,592  
             
 

Long-term portion of capital lease obligations

  $ 26,184   $ 38,019  
             
    • At the end of 2011, the gross amount of assets recorded under capital leases, including sale-leaseback capital leases was $56.9 million (2010 — $56.9 million; 2009 — $51.7 million). The charge to income resulting from the amortization of assets recorded under capital leases is included in the "Amortization of property, plant and mine development" component of the consolidated statements of income (loss).

    (b)
    Operating Leases
    • The Company has a number of operating lease agreements involving office space. Some of the leases for office facilities contain escalation clauses for increases in operating costs and property taxes. Future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms in excess of one year as at December 31, 2011 are as follows:

   
  Minimum
Lease Payments
 
 

2012

  $ 1,676  
 

2013

    946  
 

2014

    755  
 

2015

    696  
 

2016

    696  
 

Thereafter

    3,822  
         
 

Total

  $ 8,591  
         
    • The portion of operating leases relating to rental expense was $0.9 million in 2011 (2010 — $4.1 million; 2009 — $3.7 million).

RESTRICTED CASH
RESTRICTED CASH

14.   RESTRICTED CASH

  • As part of the Company's insurance programs fronted by a third party provider and reinsured through the Company's internal insurance program, the third party provider requires that cash of $3.4 million be restricted (2010 — $2.5 million).

    As part of the Company's tax planning, $32.0 million was contributed to a qualified environmental trust ("QET") in December 2011 to fulfil the requirement of financial security for costs related to the environmental remediation of the Goldex mine. Agnico-Eagle expects to incur the majority of these expenses in 2012.

FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS

15.   FINANCIAL INSTRUMENTS

  • From time to time, Agnico-Eagle has entered into financial instruments with several financial institutions in order to hedge underlying cash flow and fair value exposures arising from changes in commodity prices, interest rates, equity prices or foreign currency exchange rates.

    In 2010 and 2011, financial instruments that subjected Agnico-Eagle to market risk and concentration of credit risk consisted primarily of cash and cash equivalents and short-term investments. Agnico-Eagle places its cash and cash equivalents and short-term investments in high quality securities issued by government agencies, financial institutions and major corporations and limits the amount of credit exposure by diversifying its holdings.

    Agnico-Eagle generates almost all of its revenues in US dollars. The Company's Canadian operations, which include the LaRonde, Lapa and Meadowbank mines, and the Meliadine project have Canadian dollar requirements for capital, operating and exploration expenditures. In addition, the Company's Goldex mine, which suspended operations on October 19, 2011, has Canadian dollar requirements.

    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 2011 and 2012.

    During the year, the Company entered into forward contracts with an ineffective cash flow hedging relationship that did not qualify for hedge accounting. The forward contracts hedged $150 million of 2011 expenditures and nil of 2012 expenditures at an average rate of US$1.00 = C$0.99. There were no similar foreign exchange forward contracts in 2010. The hedges that expired during the year resulted in a realized loss of $1.4 million. As of December 31, 2011 all ineffective cash flow hedges had expired.

    The forward contracts with a cash flow hedging relationship that did qualify for hedge accounting, hedged $60 million of 2011 expenditures at an average rate of US$1.00 = C$0.99 and $300 million of 2012 expenditures. $25 million will expire each month during 2012 at an average rate of US$1.00 = C$1.01. There were no similar effective foreign exchange forward contracts in 2010. The $60 million of hedges that expired during the year resulted in a realized loss of $1.5 million. As of December 31, 2011, the Company recognized a mark-to-market loss of $4.4 million in accumulated other comprehensive income (loss). Amounts deferred in accumulated other comprehensive income (loss) are reclassified to Production costs on the statements of income (loss) and comprehensive income (loss), as applicable, when the hedged transaction has occurred. The mark-to-market loss is recorded at fair value based on broker-dealer quotations that utilize period end forward pricing of the currency hedged.

    The Company's other foreign currency derivative strategies in 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 to Canadian dollars. All of these derivative transactions expired prior to year-end such that no derivatives were outstanding as of December 31, 2011. The Company's foreign currency derivative strategy generated $5.0 million in call option premiums for the year ended December 31, 2011 (2010 — $4.9 million) that were recognized in the Gain on derivative financial instruments line item of the consolidated statements of income (loss) and comprehensive income (loss).

    In addition, the Company recognized a loss of $3.4 million (2010 — $3.1 million) on intra-quarter silver financial instruments associated with timing of sales of silver products during 2011 that were recognized in the "(Gain) loss on derivative financial instruments" line item of the consolidated statements of income (loss) and comprehensive income (loss). There were no silver financial instruments outstanding at December 31, 2011 or December 31, 2010.

    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 is nil.

    A total of 20,000 metric tonnes (2010 — 15,000 metric tonnes) of zinc call options were written at a strike price of $2,500 (2010 — $2,500) per metric tonne with 2,000 metric tonnes (2010 — 1,500 metric tonnes) expiring each month beginning February 28, 2011 (2010 — March 31, 2010). A total of 20,000 metric tonnes (2010 — 15,000 metric tonnes) of zinc put options were purchased at a strike price of $2,200 (2010 — $2,200) per metric tonne with 2,000 metric tonnes (2010 — 1,500 metric tonnes) expiring each month beginning February 28, 2011 (2010 — March 31, 2010). While setting a minimum price, the zero-cost collar strategy also limits participation to zinc prices above $2,500 (2010 — $2,500) per metric tonne. These contracts did not qualify for hedge accounting under ASC 815 — Derivatives and Hedging. Gains or losses, along with mark-to-market adjustments, were recognized in the Gain on derivative financial instruments line item of the consolidated statements of income (loss) and comprehensive income (loss). All options entered into during the year expired during the year resulting in a realized gain of $3.4 million (2010 — $3.7 million).

    The following table sets out the changes in the Accumulated other comprehensive income (loss) ("AOCI") balances recorded in the consolidated financial statements pertaining to the foreign exchange hedging activities. The fair values, based on calculated mark-to-market valuations, of recorded derivative related assets and liabilities and their corresponding entries to AOCI reflect the netting of the fair values of individual derivative financial instruments.

   
  2011   2010  
 

AOCI, beginning of year

  $   $  
 

Loss reclassified from AOCI into production cost

    1,459      
 

Loss recognized in OCI

    (5,863 )    
             
 

AOCI, end of year

  $ (4,404 ) $  
             
  • As at December 31, 2011 and 2010, there were no metal derivative positions. The Company may from time to time utilize short-term (including intra-quarter) financial instruments as part of its strategy to minimize risks and optimize returns on its byproduct metal sales.

    Other required derivative disclosures can be found in note 7(e), Accumulated other comprehensive income (loss).

    The following table provides a summary of the amounts recognized in the Gain on derivative financial instruments line item of the consolidated statements of income (loss) and comprehensive income (loss):

   
  2011   2010   2009  
 

Premiums realized on written foreign exchange call options

  $ 4,995   $ 4,845   $ 4,494  
 

Realized gain on foreign exchange extendible flat forward

        1,797      
 

Realized loss on foreign exchange forwards

    (1,407 )        
 

Realized gain on foreign exchange collar

        711      
 

Mark-to-market gain on foreign exchange extendible flat forward

        142      
 

Realized gain (loss) on zinc financial instruments

    3,419     3,733     (752 )
 

Realized gain (loss) on copper financial instruments

    79     (558 )   (150 )
 

Realized loss on silver financial instruments

    (3,403 )   (3,058 )    
                 
 

 

  $ 3,683   $ 7,612   $ 3,592  
                 
  • Agnico-Eagle's exposure to interest rate risk at December 31, 2011 relates to its cash and cash equivalents, short-term investments and restricted cash totaling $221.5 million (2010 — $104.6 million) and the Credit Facility. The Company's short-term investments and cash equivalents have a fixed weighted average interest rate of 0.61% (2010 — 0.56%).

    The fair values of Agnico-Eagle's current financial assets and liabilities approximate their carrying values as at December 31, 2011.

GENERAL AND ADMINISTRATIVE
GENERAL AND ADMINISTRATIVE

16.   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 also 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 consolidated statements of income (loss) and comprehensive income (loss) during the year. The Company's exposure to insurance losses related to this claim is limited to the $3.1 million exposure through its captive insurance company.

    During the year, $2.4 million of insurance proceeds were received and as at December 31, 2011 the Company had a remaining insurance receivable of $8.8 million (note 2(a)).

LOSS ON GOLDEX MINE
LOSS ON GOLDEX MINE

17.   LOSS ON GOLDEX MINE

  • On October 19, 2011, the Company announced that it was suspending mining operations and gold production at the Goldex mine in Quebec, Canada effective immediately. This decision followed the receipt of an opinion from a second rock mechanics consulting firm which recommended that underground mining operations be halted. It appeared that a weak volcanic rock unit in the hanging wall of the Goldex mine deposit had failed. This rock failure is thought to extend between the top of the deposit and surface. As a result, this structure has allowed an increase in ground water to flow into the mine. This water flow has likely contributed to further weakening and movement of the rock mass.

    Agnico-Eagle has written off its investment in the Goldex mine (net of expected residual value), written off the underground ore stockpile, and recorded a provision for the anticipated costs of environmental remediation. Given the amount of uncertainty in estimating the fair value of the Goldex mine property, plant, and mine development, the Company determined that the fair value was equal to the residual value. All of the remaining 1.6 million ounces of proven and probable gold reserves at the Goldex mine, other than the ore stockpiled on surface, have been reclassified as mineral resources. The Goldex mine is part of the "Canada" segment as shown in Note 19.

    The mill processed feed from the remaining surface stockpile at the Goldex mine in October 2011.

 

Impairment loss on Goldex mine property, plant, and mine development

  $ 237,110  
 

Loss on underground ore stockpile

    16,641  
 

Supplies inventory obsolescence provision

    1,915  
 

Increase in environmental remediation liability

    47,227  
         
 

Loss on Goldex mine (before income and mining taxes)

  $ 302,893  
         
  • The environmental remediation liability for the anticipated costs of remediation associated with the Company's Goldex mine 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.

IMPAIRMENT LOSS ON MEADOWBANK MINE
IMPAIRMENT LOSS ON MEADOWBANK MINE

18.   IMPAIRMENT LOSS ON MEADOWBANK MINE

  • For the year ended December 31, 2011 the Company performed a full review of the Meadowbank mine operations and updated the related life of mine plan. This review considered the exploration potential of the area, the current mineral reserves and resources, the projected operating costs in light of the persistently high operating costs experienced since commencement of commercial operations, metallurgical performance and gold price. These served as inputs into pit optimizations to determine which reserves and resources could be economically mined and be considered as mineable mineral reserves. As a result of these factors, an updated mine plan with a shorter mine life was developed and cash flows calculated, resulting in an impairment charge to the Meadowbank mine carrying value of $907.7 million. The Meadowbank mine previously had a property, plant and mine development book value of approximately $1.7 billion.

    Net estimated future cash flows from the Meadowbank mine were calculated, on an undiscounted basis, based on best estimates of future gold production, which were based on long-term gold prices from $1,250 to $1,553 per ounce (in real terms), foreign exchange rates from US$0.92:C$1 to US$0.97:C$1, increased cost estimates based on revised operating levels, average gold recovery of 92.9% and expected continuation of operations to 2017, including the processing of stockpiled ore. Future expected operating costs, capital expenditures, and asset retirement obligations were based on the updated life of mine plan. The fair value was calculated by discounting the estimated future net cash flows using a 5% interest rate (in real terms), commensurate with the estimated level of risk. Management's estimate of future cash flows is subject to risk and uncertainties. Therefore, it is reasonably possible that changes could occur which may affect the recoverability of the Company's long-lived assets and may have a material effect on the Company's results of operations and financial position. The Meadowbank mine is a part of the "Canada" segment as shown in Note 19.

SEGMENTED INFORMATION
SEGMENTED INFORMATION

19.   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 Chief Operating Officer, and that represent more than 10% of the combined revenue, profit or loss or total assets of all reported operating segments. The following are the reporting 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 reporting segments are the same as those described in the summary of significant accounting policies. There are no transactions between the reported segments affecting revenue. Production costs for the reported segments are net of intercompany transactions. Of the $229.3 million of goodwill reflected on the consolidated balance sheets at December 31, 2011, $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.

    Certain items in the comparative segmented information relating to the Meliadine project have been reclassified from the "Exploration" segment to the "Canada" segment.

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

 
Year
Ended
December 31,
2011
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization   Exploration
and Corporate
Development
  Foreign
Currency
Translation
Loss
(Gain)
  Loss on
Goldex Mine
  Impairment
Loss on
Meadowbank
Mine
  Segment
Income
(Loss)
 
 

Canada

  $ 1,217,858   $ 619,987   $ 198,219   $   $ 2,825   $ 302,893   $ 907,681   $ (813,747 )
 

Europe

    225,612     110,477     26,574         1,063             87,498  
 

Latin America

    378,329     145,614     36,988         (4,955 )           200,682  
 

Exploration

                75,721     (15 )           (75,706 )
                                     
 

 

  $ 1,821,799   $ 876,078   $ 261,781   $ 75,721   $ (1,082 ) $ 302,893   $ 907,681   $ (601,273 )
                                     

 

Segment loss

  $ (601,273 )
 

Corporate and Other

       
 

Interest and sundry expense

    (5,188 )
 

Net loss on sale and write-down of available-for-sale securities

    (3,662 )
 

Gain on derivative financial instruments

    3,683  
 

General and administrative

    (107,926 )
 

Provincial capital tax

    (9,223 )
 

Interest expense

    (55,039 )
         
 

Loss before income and mining taxes

  $ (778,628 )
         

 

 
Year
Ended
December 31, 2010
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization   Exploration
and Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 1,086,744   $ 499,621   $ 140,024   $   $ 22,815   $ 424,284  
 

Europe

    160,140     87,735     31,231         (2,780 )   43,954  
 

Latin America

    175,637     90,116     21,134         (2,126 )   66,513  
 

Exploration

            97     54,958     1,627     (56,682 )
                             
 

 

  $ 1,422,521   $ 677,472   $ 192,486   $ 54,958   $ 19,536   $ 478,069  
                             

 

Segment income

  $ 478,069  
 

Corporate and Other

       
 

Interest and sundry income

    10,254  
 

Gain on acquisition of Comaplex, net

    57,526  
 

Gain on sale of available-for-sale securities

    19,487  
 

Gain on derivative financial instruments

    7,612  
 

General and administrative

    (94,327 )
 

Provincial capital tax

    6,075  
 

Interest expense

    (49,493 )
         
 

Income before income and mining taxes

  $ 435,203  
         

 

 
Year
Ended
December 31, 2009
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization   Exploration
and Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 538,123   $ 252,035   $ 60,028   $   $ 36,499   $ 189,561  
 

Europe

    61,457     42,464     10,909         3,582     4,502  
 

Latin America

    14,182     11,819     1,524         (250 )   1,089  
 

Exploration

                36,279         (36,279 )
                             
 

 

  $ 613,762   $ 306,318   $ 72,461   $ 36,279   $ 39,831   $ 158,873  
                             

 

Segment income

  $ 158,873  
 

Corporate and Other

       
 

Interest and sundry income

    12,580  
 

Gain on sale of available-for-sale securities

    10,142  
 

Gain on derivative financial instruments

    3,592  
 

General and administrative

    (63,687 )
 

Provincial capital tax

    (5,014 )
 

Interest expense

    (8,448 )
         
 

Income before income and mining taxes

  $ 108,038  
         

 

   
  Total Assets as at  
   
  December 31, 2011   December 31, 2010  
 

Canada

  $ 3,205,158   $ 4,179,446  
 

Europe

    771,714     679,258  
 

Latin America

    1,020,078     619,263  
 

Exploration

    37,312     22,384  
             
 

 

  $ 5,034,262   $ 5,500,351  
             

 

   
  Capital Expenditures  
   
  2011   2010   2009  
 

Canada

  $ 319,728   $ 1,004,129   $ 435,098  
 

Europe

    95,549     67,894     84,955  
 

Latin America

    313,669     103,131     136,706  
 

Exploration

    8,418     97      
                 
 

 

  $ 737,364   $ 1,175,251   $ 656,759  
                 
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS

20.   SUBSEQUENT EVENTS

  • 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.

    On February 16, 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 March 15, 2012 to holders of record of the common shares of the Company on March 1, 2012.

ALLEGED SECURITIES CLASS ACTION LAWSUITS
ALLEGED SECURITIES CLASS ACTION LAWSUITS

21.   ALLEGED SECURITIES CLASS ACTION LAWSUITS

  • On November 7 and 22, 2011, the Company, three of its senior executive officers and two also being directors, and one of its former senior executive officers and 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. These actions purport to be brought on behalf of all persons who purchased the Company's securities during the period March 26, 2010 through October 19, 2011 (the "Class Period"). The lawsuits allege, among other things, that the Company violated the U.S. securities laws by making a series of material misrepresentations and/or omitting to disclose material information during the Class Period, thereby artificially inflating the price of the Company's securities. The original complaints seek, among other things, (i) a determination that the action is a proper class action, and (ii) awards for unspecified damages and interest, costs and expenses. On February 6, 2012, the court entered an order consolidating the Stone and Hastings actions under the caption In re Agnico-Eagle Mines Ltd. Securities Litigation and appointing a lead plaintiff (not one of the plaintiffs who filed the original complaints). The lead plaintiff has until April 6, 2012 to file a consolidated amended complaint. Defendants will then respond to the consolidated amended complaint, including filing a motion to dismiss for failure to state a claim under the U.S. securities laws, if they deem it appropriate. Eberhard Scherkus, one of the three executives employed by Agnico-Eagle at the time the case was filed and named as a defendant in the lawsuits, resigned as a director and officer of the company effective February 15, 2012.

    On March 8, 2012, a Notice of Action was issued by AF A Livforsakringsaktiebolag, AF A Sjukforsakringsaktiebolag, AF A Trygg Hetsforsakrfngsaktiebolag, Kollektiv a Vtalsstfftelsen Trygghetsfonden TSL, and William Leslie against the Company and certain of its current and former officers and directors. The Notice alleges, among other things, that the Company failed to disclose the specific risks regarding ongoing water inflow at the Goldex mine. The Notice was issued by the plaintiffs as a proposed class action on behalf of all persons who acquired securities of the Company during the period March 26, 2010 to October 19, 2011. The plaintiffs seek to certify the action as a class action and seek damages of $250 million.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

Basis of consolidation

        These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and entities in which it has a controlling financial interest after the elimination of intercompany accounts and transactions. The Company has a controlling financial interest if it owns a majority of the outstanding voting common stock or has significant control over an entity through contractual arrangements or economic interests of which the Company is the primary beneficiary.

Cash and cash equivalents

        Cash and cash equivalents include cash on hand and short-term investments in money market instruments with remaining maturities of three months or less at the date of purchase. Short-term investments are designated as held to maturity for accounting purposes and are carried at amortized cost, which approximates market value given the short-term nature of these investments. Agnico-Eagle places its cash and cash equivalents and short-term investments in high quality securities issued by government agencies, financial institutions and major corporations and limits the amount of credit exposure by diversifying its holdings.

Inventories

        Inventories consist of ore stockpiles, concentrates, dore bars and supplies. Amounts are removed from inventory based on average cost. The current portion of stockpiles, ore on leach pads and inventories are determined based on the expected amounts to be processed within the next 12 months. Stockpiles, ore on leach pads and inventories not expected to be processed within the next 12 months are classified as long term.

Stockpiles

        Stockpiles consist of coarse ore that has been mined and hoisted from underground or delivered from an open pit that is available for further processing and in-stope ore inventory in the form of drilled and blasted stopes ready to be mucked and hoisted to the surface. The stockpiles are measured by estimating the tonnage, contained ounces (based on assays) and recovery percentages (based on actual recovery rates achieved for processing similar ore). Specific tonnages are verified and compared to original estimates once the stockpile is milled. Ore stockpiles are valued at the lower of net realizable value and mining costs incurred up to the point of stockpiling the ore. The net realizable value of stockpiled ore is assessed by comparing the sum of the carrying value plus future processing and selling costs to the expected revenue to be earned, which is based on the estimated volume and grade of stockpiled ore.

        Mining costs include all costs associated with mining operations and are allocated to each tonne of stockpiled ore. Costs fully absorbed into inventory values include direct and indirect materials and consumables, direct labour, utilities and amortization of mining assets incurred up to the point of stockpiling the ore. Royalty expenses and production taxes are included in production costs, but are not capitalized into inventory. Stockpiles are generally processed within twelve months of extraction, with the exception of certain amounts of the Pinos Altos mine's, Kittila mine's and Meadowbank mine's ore stockpiles. Due to the structure of these ore bodies, a significant amount of drilling and blasting is incurred in the early years of its mine life, which results in a long-term stockpile. The decision to process stockpiled ore is based on a net smelter return analysis. The Company processes its stockpiled ore if its estimated revenue, on a per tonne basis and net of estimated smelting and refining costs, is greater than the related mining and milling costs. The Company has never elected to not process stockpiled ore and does not anticipate departing from this practice in the future. Stockpiled ore on the surface is exposed to the elements, but the Company does not expect its condition to deteriorate significantly as a result.

        Pre-production stripping costs are capitalized until an "other than de minimis" level of mineral is produced, after which time such costs are either capitalized to inventory or expensed. The Company considers various relevant criteria to assess when an "other than de minimis" level of mineral is produced. The criteria considered include: (1) the number of ounces mined compared to total ounces in mineral reserves; (2) the quantity of ore mined compared to the total quantity of ore expected to be mined over the life of the mine; (3) the current stripping ratio compared to the expected stripping ratio over the life of the mine; and (4) the ore grade compared to the expected ore grade over the life of the mine.

Concentrates and dore bars

        Concentrates and dore bar inventories consist of concentrates and dore bars for which legal title has not yet passed to third-party smelters. Concentrates and dore bar inventories are measured based on assays of the processed concentrates and are valued based on the lower of net realizable value and the fully absorbed mining and milling costs associated with extracting and processing the ore.

Supplies

        Supplies, consisting of mine stores inventory, are valued at the lower of average cost and replacement cost.

Mining properties, plant and equipment and mine development costs

        Significant payments related to the acquisition of land and mineral rights are capitalized as mining properties at cost. If a mineable ore body is discovered, such costs are amortized to income when production begins, using the unit-of-production method, based on estimated proven and probable reserves. If no mineable ore body is discovered, such costs are expensed in the period in which it is determined that the property has no future economic value.

        Expenditures for new facilities and improvements that can extend the useful lives of existing facilities are capitalized as plant and equipment at cost. Interest costs incurred for the construction of significant projects are capitalized.

        Mine development costs incurred after the commencement of production are capitalized or deferred to the extent that these costs benefit the entire ore body. Costs incurred to access single ore blocks are expensed as incurred; otherwise, such vertical and horizontal developments are classified as mine development costs.

        Agnico-Eagle records amortization on both plant and equipment and mine development costs used in commercial production on a unit-of-production basis based on the estimated tonnage of proven and probable mineral reserves of the mine. The unit-of-production method defines the denominator as the total proven and probable tonnes of reserves.

        Repairs and maintenance expenditures are charged to income as production costs. Assets under construction are not depreciated until the end of the construction period. Upon achieving commercial production, the capitalized construction costs are transferred to the various categories of plant and equipment.

        Mineral exploration costs are charged to income in the year in which they are incurred. When it is determined that a mining property can be economically developed as a result of established proven and probable reserves, the costs of drilling and development to further delineate the ore body on such property are capitalized. The establishment of proven and probable reserves is based on results of final feasibility studies, which indicate whether a property is economically feasible. Upon commencement of the commercial production of a development project, these costs are transferred to the appropriate asset category and are amortized to income using the unit-of-production method mentioned above. Mine development costs, net of salvage values, relating to a property that is abandoned or considered uneconomic for the foreseeable future are written off.

        The carrying values of mining properties, plant and equipment and mine development costs are reviewed periodically, when impairment factors exist, for possible impairment, based on the future undiscounted net cash flows of the operating mine or development property. If it is determined that the estimated net recoverable amount is less than the carrying value, then a write down to the estimated fair value amount is made with a charge to income. Estimated future cash flows of an operating mine or development property include estimates of recoverable ounces of gold based on proven and probable reserves. To the extent that economic value exists beyond the proven and probable reserves of an operating mine or development property, this value is included as part of the estimated future cash flows. Estimated future cash flows also involve estimates regarding metal prices (considering current and historical prices, price trends and related factors), production levels, capital and reclamation costs, and related income and mining taxes, all based on detailed engineering life-of-mine plans. Cash flows are subject to risks and uncertainties and changes in the estimates of the cash flows may affect the recoverability of long-lived assets.

Goodwill

        Business combinations are accounted for using the purchase method whereby assets and liabilities acquired are recorded at their fair values as of the date of acquisition and any excess of the purchase price over such fair values is recorded as goodwill. As of the date of acquisition, goodwill is allocated to reporting units by determining estimates of the fair value allocated to each reporting unit and comparing this amount to the fair values of identifiable assets and liabilities allocated to each reporting unit. Goodwill is not amortized.

        The Company performs goodwill impairment tests on an annual basis as well as when events and circumstances indicate that the carrying amounts may no longer be recoverable. In performing the impairment tests, the Company estimates the fair values of its reporting units that include goodwill and compares those fair values to the reporting units' carrying amounts. If a reporting unit's carrying amount exceeds its fair value, the Company compares the implied fair value of the reporting unit's goodwill to the carrying amount and any excess of the carrying amount of goodwill over the implied fair value is charged to income.

Financial instruments

        From time to time, Agnico-Eagle uses derivative financial instruments, primarily option and forward contracts, to manage exposure to fluctuations in byproduct metal prices, interest rates and foreign currency exchange rates. Agnico-Eagle does not hold financial instruments or derivative financial instruments for trading purposes.

        The Company recognizes all derivative financial instruments in the consolidated financial statements at fair value regardless of the purpose or intent for holding the instrument. Changes in the fair value of derivative financial instruments are either recognized periodically in the consolidated statement of income (loss) or in shareholders' equity as a component of accumulated other comprehensive income (loss), depending on the nature of the derivative financial instrument and whether it qualifies for hedge accounting. Financial instruments designated as hedges are tested for effectiveness on a quarterly basis. Gains and losses on those contracts that are proven to be effective are reported as a component of the related transaction.

Revenue recognition

        Revenue is recognized when the following conditions are met:

    • (a)
      persuasive evidence of an arrangement to purchase exists;

      (b)
      the price is determinable;

      (c)
      the product has been delivered; and

      (d)
      collection of the sales price is reasonably assured.

        Revenue from gold and silver in the form of dore bars is recorded when the refined gold or silver is sold and delivered to the customer. Generally, all the gold and silver in the form of dore bars recovered in the Company's milling process is sold in the period in which it is produced.

        Under the terms of the Company's concentrate sales contracts with third-party smelters, final prices for the metals contained in the concentrate are set based on the prevailing spot market metal prices on a specified future date, which is based on the date that the concentrate is delivered to the smelter. The Company records revenues under these contracts based on forward prices at the time of delivery, which is when transfer of legal title to concentrate passes to the third-party smelters. The terms of the contracts result in differences between the recorded estimated price at delivery and the final settlement price. These differences are adjusted through revenue at each subsequent financial statement date.

        Revenues from mining operations consist of gold revenues, net of smelting, refining, transportation and other marketing charges. Revenues from byproduct metals sales are shown, net of smelter charges, as part of revenues from mining operations.

Foreign currency translation

        The functional currency for each of the Company's operations is the US dollar. Monetary assets and liabilities of Agnico-Eagle's operations denominated in a currency other than the US dollar are translated into US dollars using the exchange rate in effect at year end. Non-monetary assets and liabilities are translated at historical exchange rates while revenues and expenses are translated at the average exchange rate during the year, with the exception of amortization, which is translated at historical exchange rates. Exchange gains and losses are included in income except for gains and losses on foreign currency contracts used to hedge specific future commitments in foreign currencies. Gains and losses on these contracts are accounted for as a component of the related hedge transactions.

Reclamation costs

        On an annual basis, the Company assesses cost estimates and other assumptions used in the valuation of Asset Retirement Obligations ("ARO") at each of its mineral properties to reflect events, changes in circumstances and new information available. Changes in these cost estimates and assumptions have a corresponding impact on the fair value of the ARO. For closed mines, any change in the fair value of AROs results in a corresponding charge or credit within other expenses, whereas at operating mines the charge is recorded as an adjustment to the carrying amount of the corresponding asset. AROs arise from the acquisition, development, construction and normal operation of mining property, plant and equipment due to government controls and regulations that protect the environment on the closure and reclamation of mining properties. The major parts of the carrying amount of AROs relate to tailings and heap leach pad closure/rehabilitation; demolition of buildings/mine facilities; ongoing water treatment; and ongoing care and maintenance of closed mines. The fair values of AROs are measured by discounting the expected cash flows using a discount factor that reflects the credit-adjusted risk-free rate of interest. The Company prepares estimates of the timing and amount of expected cash flows when an ARO is incurred. Expected cash flows are updated to reflect changes in facts and circumstances. The principal factors that can cause expected cash flows to change are: the construction of new processing facilities; changes in the quantities of material in reserves and a corresponding change in the life of mine plan; changing ore characteristics that have an impact on required environmental protection measures and related costs; changes in water quality that have an impact on the extent of water treatment required; and changes in laws and regulations governing the protection of the environment. When expected cash flows increase, the revised cash flows are discounted using a current discount factor; whereas when expected cash flows decrease, the reduced cash flows are discounted using the historical discount factor used in the original estimation of the expected cash flows, and then in both cases any change in the fair value of the ARO is recorded. Agnico-Eagle records the fair value of an ARO when it is incurred. AROs are adjusted to reflect the passage of time (accretion), which is calculated by applying the discount factor implicit in the initial fair value measurement to the beginning of period carrying amount of the ARO. For producing mines, accretion expense is recorded in the cost of goods sold each period. Upon settlement of an ARO, Agnico-Eagle records a gain or loss if the actual cost differs from the carrying amount of the ARO. Settlement gains/losses are recorded in other (income) expenses.

        Environmental remediation liabilities are differentiated from AROs in that they do not arise from environmental contamination in the normal operation of a long-lived asset or from a legal obligation to treat environmental contamination resulting from the acquisition, construction, or development of a long-lived asset. The Company is required to recognize a liability for obligations associated with environmental remediation liabilities arising from past acts.

        Other environmental remediation costs that are not AROs or environmental remediation liabilities as defined by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 410-20 — Asset Retirement Obligations and 410-30 — Environmental Obligations, respectively, are expensed as incurred.

Income and mining taxes

        Agnico-Eagle follows the liability method of tax allocation for accounting for income taxes. Under this method of tax allocation, deferred income and mining tax bases of assets and liabilities are measured using the enacted tax rates and laws expected to be in effect when the differences are expected to reverse.

        The Company's operations involve dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxation authorities in various jurisdictions and resolution of disputes arising from federal, provincial, state and international tax audits. The Company recognizes the effect of uncertain tax positions and records tax liabilities for anticipated tax audit issues in Canada and other tax jurisdictions where it is more likely than not based on technical merits that the position would not be sustained. The Company recognizes the amount of any tax benefits that have a greater than 50 percent likelihood of being ultimately realized upon settlement.

        Changes in judgment related to the expected ultimate resolution of uncertain tax positions are recognized in the year of such changes. Accrued interest and penalties related to unrecognized tax benefits are recorded in income tax expense when incurred. The Company adjusts these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the tax liabilities. If the Company's estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expenses would result. If the estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result.

Stock-based compensation

        Agnico-Eagle has two stock-based compensation plans. The Employee Stock Option Plan and the Incentive Share Purchase Plan are described in note 8(a) and note 8(b), respectively, to the consolidated financial statements. The Company issues common shares to settle its obligations under both plans.

        The Employee Stock Option Plan provides for the granting of options to directors, officers, employees and service providers to purchase common shares. Options have exercise prices equal to the market price on the day prior to the date of grant. The fair value of these options is recognized in the consolidated statements of income (loss) or in the consolidated balance sheets if capitalized as part of property, plant and mine development over the applicable vesting period as a compensation cost. Any consideration paid by employees on exercise of options or purchase of common shares is credited to share capital.

        Fair value is determined using the Black-Scholes option valuation model which requires the Company to estimate the expected volatility of the Company's share price and the expected life of the stock options. Limitations with existing option valuation models and the inherent difficulties associated with estimating these variables create difficulties in determining a reliable single measure of the fair value of stock option grants. The dilutive impact of stock option grants is factored into the Company's reported diluted net income per share.

Net income (loss) per share

        Basic net income (loss) per share is calculated on net income (loss) for the year using the weighted average number of common shares outstanding during the year. The weighted average number of common shares used to determine diluted net income per share includes an adjustment, using the treasury stock method, for stock options outstanding and warrants outstanding. Under the treasury stock method:

  • the exercise of options or warrants is assumed to be at the beginning of the period (or date of issuance, if later);

    the proceeds from the exercise of options or warrants, plus, in the case of options, the future period compensation expense on options granted on or after January 1, 2003, are assumed to be used to purchase common shares at the average market price during the period; and

    the incremental number of common shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) is included in the denominator of the diluted net income per share computation.

Pension costs and obligations and post-retirement benefits

        In Canada, Agnico-Eagle maintains a defined contribution plan covering all of its employees. The plan is funded by Company contributions based on a percentage of income for services rendered by employees. In addition, the Company has a supplemental plan for designated executives at the level of Vice-President or above. Under this plan an additional 10% of the designated executives' income are contributed by the Company. The Company does not offer any other post-retirement benefits to its employees.

        Agnico-Eagle also provides a non-registered supplementary executive retirement defined benefit plan for certain senior officers (the "Executives Plan"). The Executives Plan benefits are generally based on the employee's years of service and level of compensation. Pension expense related to the Executives Plan is the net of the cost of benefits provided, the interest cost of projected benefits, return on plan assets and amortization of experience gains and losses. Pension fund assets are measured at current fair values. Actuarially determined plan surpluses or deficits, experience gains or losses and the cost of pension plan improvements are amortized on a straight-line basis over the expected average remaining service life of the employee group.

Commercial production

        The Company assesses each mine construction project to determine when a mine moves into the production stage. The criteria used to assess the start date are determined based on the nature of each mine construction project, such as the complexity of a plant and its location. The Company considers various relevant criteria to assess when the mine is substantially complete and ready for its intended use and moved into the production stage. The criteria considered include: (1) the completion of a reasonable period of testing of mine plant and equipment; (2) the ability to produce minerals in saleable form (within specifications); and (3) the ability to sustain ongoing production of minerals. When a mine construction project moves into the production stage, the capitalization of certain mine construction costs ceases and costs are either capitalized to inventory or expensed, except for sustaining capital costs related to property, plant and equipment and underground mine development or reserve development.

TRADE RECEIVABLES AND REVENUES FROM MINING OPERATIONS (Tables)
   
  2011   2010  
 

Dore bars awaiting settlement

  $   $ 24,281  
 

Concentrates awaiting settlement

    75,899     88,668  
             
 

 

  $ 75,899   $ 112,949  
             
 
 
  2011   2010   2009  
 

Revenues from mining operations:

                   
 

Gold

  $ 1,563,760   $ 1,216,249   $ 474,875  
 

Silver

    171,725     104,544     59,155  
 

Zinc

    70,522     77,544     57,034  
 

Copper

    14,451     22,219     22,571  
 

Lead

    1,341     1,965     127  
                 
 

 

  $ 1,821,799   $ 1,422,521   $ 613,762  
                 
 
OTHER ASSETS (Tables)

 

   
  2011   2010  
 

Federal, provincial and other sales taxes receivable

  $ 51,603   $ 63,553  
 

Prepaid expenses

    25,540     10,449  
 

Meadowbank insurance receivable

    8,765      
 

Prepaid royalty(i)

    7,684     5,282  
 

Employee loans receivable

    5,567     4,498  
 

Other

    11,210     5,191  
 

Government refundables for local community improvements

        803  
             
 

 

  $ 110,369   $ 89,776  
             

    • (i)
      The prepaid royalty relates to the Pinos Altos mine in Mexico.
    2011   2010  
 

Available-for-sale securities in an unrealized gain position

             
 

Cost (net of impairments)

  $ 127,344   $ 50,958  
 

Unrealized gains in accumulated other comprehensive income

    16,408     48,151  
             
 

Estimated fair value

    143,752     99,109  
             
 

Available-for-sale securities in an unrealized loss position

             
 

Cost (net of impairments)

    1,717      
 

Unrealized losses in accumulated other comprehensive income

    (58 )    
             
 

Estimated fair value

    1,659      
             
 

Total estimated fair value of available-for-sale securities

  $ 145,411   $ 99,109  
           

 

   
  2011   2010  
 

Deferred financing costs, less accumulated amortization of $5,809 (2010 — $2,249)

  $ 15,777   $ 16,780  
 

Long-term ore in stockpile(i)

    64,392     27,409  
 

Prepaid royalty(ii)

        8,777  
 

Other

    7,879     8,536  
             
 

 

  $ 88,048   $ 61,502  
             

    • (i)
      Due to the structure of the Goldex mine, Pinos Altos mine, Kittila mine, and Meadowbank mine ore bodies, a significant amount of drilling and blasting is incurred in the early years of its mine life resulting in a long-term stockpile. The value of the stockpile at December 31, 2011 is nil (2010 — $15.0 million) for the Goldex mine, $7.1 million (2010 — $12.4 million) for the Pinos Altos mine, $8.0 million (2010 — nil) for the Kittila mine and $49.3 million (2010 — nil) for the Meadowbank mine.

      (ii)
      The prepaid royalty relates to the Pinos Altos mine in Mexico.
PROPERTY, PLANT AND MINE DEVELOPMENT (Tables)
  2011   2010  
    Cost   Accumulated
Amortization
  Net Book
Value
  Cost   Accumulated
Amortization
  Net Book
Value
 
 

Mining properties

  $ 1,228,523 (i) $ 111,567   $ 1,116,956   $ 1,885,476 (i) $ 44,823   $ 1,840,653  
 

Plant and equipment

    2,467,300     437,706     2,029,594     2,123,191     321,907     1,801,284  
 

Mine development costs

    869,746     190,399     679,347     853,927     171,869     682,058  
 

Construction in Progress:

                                     
 

LaRonde mine extension

                185,905         185,905  
 

Creston Mascota deposit at Pinos Altos

                54,663         54,663  
 

Meliadine project

    69,458         69,458              
                             
 

 

  $ 4,635,027   $ 739,672   $ 3,895,355   $ 5,103,162   $ 538,599   $ 4,564,563  
                             

  • (i)
    The decline in mining properties' cost between 2010 and 2011 is primarily attributed to the loss on Goldex mine (note 17) and the impairment loss on Meadowbank mine (note 18) recorded during 2011.
  •  

 

   
  2011   2010  
 

Canada

  $ 2,433,527   $ 3,456,809  
 

Europe

    674,258     605,283  
 

Latin America

    776,892     500,211  
 

USA

    10,678     2,260  
             
 

Total

  $ 3,895,355   $ 4,564,563  
             
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

  $ 7,645   $   $ 7,645 (i) $  
 

Available-for-sale securities

    145,411     142,490 (ii)   2,921 (iii)    
 

Trade receivables

    75,899         75,899 (iv)    
                     
 

 

  $ 228,955   $ 142,490   $ 86,465   $  
                     
 

Financial liabilities:

                         
 

Fair value of derivative financial instruments(iii)

  $ 4,404   $   $ 4,404   $  
                     

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

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

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

    (iv)
    Trade receivables from provisional invoices for concentrate sales are included within Level 2 as they are valued using quoted forward rates derived from observable market data based on the month of expected settlement.
LONG-TERM DEBT (Tables)
Individual series of issued Notes
    Principal   Interest Rate   Maturity Date  
 

Series A

  $ 115,000     6.13%     7/4/2017  
 

Series B

    360,000     6.67%     7/4/2020  
 

Series C

    125,000     6.77%     7/4/2022  
                     
 

 

  $ 600,000              
                     
 
RECLAMATION PROVISION AND OTHER LIABILITIES (Tables)
  •  

 

   
  2011   2010  
 

Reclamation and closure costs (note 6(a))

  $ 105,443   $ 91,641  
 

Long-term portion of capital lease obligations (note 13(a))

    26,184     38,019  
 

Pension benefits (note 6(c))

    13,991     11,307  
 

Goldex mine government grant and other (note 6(b))

    370     4,569  
             
 

Total

  $ 145,988   $ 145,536  
             
 
  2011   2010  
 

Asset retirement obligations, beginning of year

  $ 91,641   $ 62,847  
 

Current year additions and changes in estimate, net

    9,653     23,058  
 

Current year accretion

    4,953     3,176  
 

Liabilities settled

        (277 )
 

Foreign exchange revaluation

    (804 )   2,837  
             
 

Asset retirement obligations and environmental remediation liabilities, end of year

  $ 105,443   $ 91,641  
             
 
    2011   2010   2009  
 

Service cost — benefits earned during the year

  $ 996   $ 981   $ 509  
 

Interest cost on projected benefit obligation

    663     613     448  
 

Amortization of net transition asset, past service liability and net experience gains

    171     164     148  
 

Prior service cost

    26     25     23  
 

Recognized net actuarial loss (gain)

    245         (142 )
                 
 

Net pension plan expense

  $ 2,101   $ 1,783   $ 986  
                 
 
  2011   2010  
 

Accrued employee benefit liability

  $ 7,292   $ 6,634  
 

Accumulated other comprehensive income:

             
 

Initial transition obligation

    500     681  
 

Past service liability

    76     104  
 

Net experience losses

    3,550     2,179  
             
 

Net liability

  $ 11,418   $ 9,598  
             
 
 

Transition obligation

  $ 166  
 

Past service cost

    25  
 

Net actuarial loss

    704  
         
 

 

  $ 895  
         
 
   
  2011   2010  
 

Reconciliation of the market value of plan assets

             
 

Fair value of plan assets, beginning of year

  $ 2,443   $ 1,635  
 

Agnico-Eagle's contribution

    1,156     1,397  
 

Benefit payments

    (578 )   (699 )
 

Effect of exchange rate changes

    (69 )   110  
             
 

Fair value of plan assets, end of year

    2,952     2,443  
             
 

Reconciliation of projected benefit obligation

             
 

Projected benefit obligation, beginning of year

    12,041     7,998  
 

Service cost

    996     981  
 

Interest cost

    663     613  
 

Actuarial losses

    1,704     2,718  
 

Benefit payments

    (696 )   (812 )
 

Effect of exchange rate changes

    (338 )   543  
             
 

Projected benefit obligation, end of year

    14,370     12,041  
             
 

Deficiency of plan assets compared with projected benefit obligation

  $ (11,418 ) $ (9,598 )
             
 

Comprised of:

             
 

Unamortized transition liability

  $ (500 ) $ (681 )
 

Unamortized net experience loss

    (3,626 )   (2,283 )
 

Accrued liabilities

    (7,292 )   (6,634 )
             
 

 

  $ (11,418 ) $ (9,598 )
             
 

Weighted average discount rate — net periodic pension cost

    5.20 %   7.00 %
 

Weighted average discount rate — projected benefit obligation

    4.45 %   5.20 %
 

Weighted average expected long-term rate of return

    n/a     n/a  
 

Weighted average rate of compensation increase

    3.00 %   3.00 %
 

Estimated average remaining service life for the plan (in years)(i)

    3.0     4.0  

    • (i)
      Estimated average remaining service life for the Executives Plan was developed for individual senior officers.
 

2012

  $ 415  
 

2013

  $ 472  
 

2014

  $ 469  
 

2015

  $ 465  
 

2016

  $ 461  
 

2017 – 2021

  $ 2,229  
 
SHAREHOLDERS' EQUITY (Tables)
  2011   2010  
 

Cumulative translation adjustment from electing US dollar as principal reporting currency

  $ (16,206 ) $ (16,206 )
 

Unrealized net gain on available-for-sale securities

    16,350     48,151  
 

Unrealized loss on derivative contracts

    (4,404 )    
 

Unrealized loss on pension liability

    (5,219 )   (4,420 )
 

Tax effect of unrealized loss on derivative contracts

    1,491      
 

Tax effect of unrealized loss on pension liability

    882     865  
             
 

 

  $ (7,106 ) $ 28,390  
             
 
    2011   2010   2009  
 

Weighted average number of common shares outstanding — basic

    169,352,896     162,342,686     155,942,151  
 

Add: Dilutive impact of employee stock options

        1,192,530     1,256,103  
 

Dilutive impact of warrants

        2,263,902     1,392,752  
 

Dilutive impact of shares related to RSU plan

        43,141     29,882  
                 
 

Weighted average number of common shares outstanding — diluted

    169,352,896     165,842,259     158,620,888  
                 
 
STOCK-BASED COMPENSATION (Tables)
    2011   2010   2009  
    Number of
Options
  Weighted
Average
Exercise
Price
  Number of
Options
  Weighted
Average
Exercise
Price
  Number of
Options
  Weighted
Average
Exercise
Price
 
 

Outstanding, beginning of year

    6,762,704   C$ 56.94     5,707,940   C$ 53.85     4,752,440   C$ 44.57  
 

Granted

    2,630,785     76.12     2,926,080     57.55     2,276,000     62.65  
 

Exercised

    (308,688 )   43.62     (1,627,766 )   47.02     (1,238,000 )   34.28  
 

Forfeited

    (125,750 )   67.47     (243,550 )   58.03     (82,500 )   55.99  
                             
 

Outstanding, end of year

    8,959,051   C$ 62.88     6,762,704   C$ 56.94     5,707,940   C$ 53.85  
                             
 

Options exercisable at end of year

    5,178,172           2,972,857           2,445,615        
                                   
 
  2011  

  Number of
Options
  Weighted
Average Grant
Date Fair Value
 
 

Nonvested, beginning of year

    3,789,847   C$ 18.71  
 

Granted

    2,630,785   C$ 17.05  
 

Vested

    (2,537,253 ) C$ 18.40  
 

Forfeited (unvested)

    (102,500 ) C$ 17.77  
             
 

Nonvested, end of year

    3,780,879   C$ 17.79  
             
 
    Options Outstanding   Options Exercisable  
 
Range of Exercise Prices
  Number
Outstanding
  Weighted
Average
Remaining
Contractual Life
  Weighted
Average
Exercise Price
  Number
Excercisable
  Weighted
Average
Exercise Price
 
 

C$23.02 — C$36.23

    16,000     1.84 years   C$ 33.26     16,000   C$ 33.26  
 

C$39.18 — C$59.71

    4,361,866     2.00 years     54.94     3,070,576     54.17  
 

C$60.72 — C$83.08

    4,581,185     3.16 years     70.55     2,091,596     67.22  
                         
 

C$23.02 — C$83.08

    8,959,051     2.59 years   C$ 62.88     5,178,172   C$ 59.38  
                         
 
    2011   2010   2009  
 

Risk-free interest rate

    1.95%     1.86%     1.27%  
 

Expected life of options (in years)

    2.5     2.5     2.5  
 

Expected volatility of Agnico-Eagle's share price

    34.70%     43.80%     64.00%  
 

Expected dividend yield

    0.89%     0.42%     0.42%  
 
INCOME AND MINING TAXES (Tables)
    2011   2010   2009  
 

Current provision

                   
 

Canada

  $ 58,752   $ 34,217   $ 1,171  
 

Mexico

    3,496     1,942      
 

Finland

    222          
                 
 

 

    62,470     36,159     1,171  
                 
 

 

                   
 

Deferred provision (recovery)

                   
 

Canada

    (337,408 )   47,083     27,083  
 

Mexico

    54,996     18,759      
 

Finland

    10,269     1,086     (6,754 )
                 
 

 

    (272,143 )   66,928     20,329  
                 
 

 

  $ (209,673 ) $ 103,087   $ 21,500  
                 
 
    2011   2010   2009  
 

Combined federal and composite provincial tax rates

    27.8%     29.6%     30.9%  
 

Increase (decrease) in tax rates resulting from:

                   
 

Provincial mining duties

    5.9     6.8     16.1  
 

Tax law change

    (2.7)     (5.1)     (24.4)  
 

Impact of foreign tax rates

    (0.2)     (0.5)     (4.9)  
 

Permanent differences

    (1.6)     (4.2)     2.2  
 

Valuation allowance

    (0.3)     (0.2)      
 

Effect of changes in income tax rates

    (2.0)     (2.7)      
                 
 

Actual rate as a percentage of pre-tax income

    26.9%     23.7%     19.9%  
                 
 
    2011   2010  
    (Assets)/
Liabilities
  (Assets)/
Liabilities
 
 

Mining properties

  $ 704,379   $ 966,485  
 

Net operating and capital loss carry forwards

    (104,332 )   (133,042 )
 

Mining duties

    (88,670 )   (71,492 )
 

Reclamation provisions

    (51,926 )   (30,752 )
 

Valuation allowance

    39,121     4,855  
             
 

Deferred income and mining tax liabilities

  $ 498,572   $ 736,054  
             
 
  2011   2010  
 

Unrecognized tax benefits, beginning of year

  $ 1,630   $ 5,608  
 

Reductions

    (430 )   (3,978 )
             
 

Unrecognized tax benefit, end of year

  $ 1,200   $ 1,630  
             
 
ACQUISITIONS (Tables)
 

Total purchase price:

       
 

Cash paid for acquisition

  $ 165,954  
 

Agnico-Eagle shares issued for acquisition

    56,146  
         
 

Total purchase price to allocate

  $ 222,100  
         
 

Fair value of assets acquired and liabilities assumed:

       
 

Mining properties

  $ 282,000  
 

Goodwill

    29,215  
 

Cash and cash equivalents

    2,907  
 

Trade receivables

    469  
 

Other current assets

    1,700  
 

Equipment

    56  
 

Accounts payable and accrued liabilities

    (9,767 )
 

Deferred tax liability

    (72,229 )
 

Non-controlling interest

    (12,251 )
         
 

Net assets acquired

  $ 222,100  
         
 
 
    2011   2010  
  Unaudited
 
 

Pro forma net income (loss) attributed to common shareholders

  $ (582,762 ) $ 324,708  
 

Pro forma net income (loss) per share — basic

  $ (3.42 ) $ 1.98  
 
 

Total purchase price:

       
 

Comaplex shares previously purchased

  $ 88,683  
 

Agnico-Eagle shares issued for acquisition

    578,955  
         
 

Total purchase price to allocate

  $ 667,638  
         
 

Fair value of assets acquired and liabilities assumed:

       
 

Property

  $ 642,610  
 

Goodwill

    200,064  
 

Supplies

    542  
 

Equipment

    2,381  
 

Asset retirement obligation

    (3,400 )
 

Deferred tax liability

    (174,559 )
         
 

Net assets acquired

  $ 667,638  
         
 
 
    2010   2009  
    Unaudited
 
 

Pro forma net income attributed to common shareholders

  $ 331,516   $ 85,371  
 

Pro forma net income per share — basic

  $ 2.04   $ 0.55  
 
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables)
Schedule of accounts payable and accrued liabilities
    2011   2010  
 

Trade payables

  $ 104,699   $ 91,974  
 

Wages payable

    27,247     21,583  
 

Accrued liabilities

    47,462     33,390  
 

Goldex mine government grant (note 6(b))

    1,452     1,485  
 

Other liabilities

    22,687     11,943  
             
 

 

  $ 203,547   $ 160,375  
             
 
COMMITMENTS AND CONTINGENCIES (Tables)
Summary of purchase commitments related to the Kittila Mine for oxygen and electricity supplies
    Purchase
Commitments
 
 

2012

  $ 11,481  
 

2013

    7,141  
 

2014

    7,853  
 

2015

    4,671  
 

2016

    4,716  
 

Subsequent years

    26,452  
         
 

Total

  $ 62,314  
         
 
LEASES (Tables)
Year ending December 31:
   
 
 

2012

  $ 12,714  
 

2013

    15,520  
 

2014

    8,829  
 

2015

    3,567  
 

2016

     
 

Thereafter

     
         
 

Total minimum lease payments

    40,630  
 

Less amount representing interest

    3,378  
         
 

Present value of net minimum lease payments

  $ 37,252  
         
 
    2011   2010  
 

Total future lease payments

  $ 40,630   $ 54,476  
 

Less: interest

    3,378     5,865  
             
 

 

    37,252     48,611  
 

Less: current portion

    11,068     10,592  
             
 

Long-term portion of capital lease obligations

  $ 26,184   $ 38,019  
             
 
    Minimum
Lease Payments
 
 

2012

  $ 1,676  
 

2013

    946  
 

2014

    755  
 

2015

    696  
 

2016

    696  
 

Thereafter

    3,822  
         
 

Total

  $ 8,591  
         
 
FINANCIAL INSTRUMENTS (Tables)
    2011   2010  
 

AOCI, beginning of year

  $   $  
 

Loss reclassified from AOCI into production cost

    1,459      
 

Loss recognized in OCI

    (5,863 )    
             
 

AOCI, end of year

  $ (4,404 ) $  
             
 
    2011   2010   2009  
 

Premiums realized on written foreign exchange call options

  $ 4,995   $ 4,845   $ 4,494  
 

Realized gain on foreign exchange extendible flat forward

        1,797      
 

Realized loss on foreign exchange forwards

    (1,407 )        
 

Realized gain on foreign exchange collar

        711      
 

Mark-to-market gain on foreign exchange extendible flat forward

        142      
 

Realized gain (loss) on zinc financial instruments

    3,419     3,733     (752 )
 

Realized gain (loss) on copper financial instruments

    79     (558 )   (150 )
 

Realized loss on silver financial instruments

    (3,403 )   (3,058 )    
                 
 

 

  $ 3,683   $ 7,612   $ 3,592  
                 
 
LOSS ON GOLDEX MINE (Tables)
Schedule of loss on Goldex Mine
 

Impairment loss on Goldex mine property, plant, and mine development

  $ 237,110  
 

Loss on underground ore stockpile

    16,641  
 

Supplies inventory obsolescence provision

    1,915  
 

Increase in environmental remediation liability

    47,227  
         
 

Loss on Goldex mine (before income and mining taxes)

  $ 302,893  
         
 
SEGMENTED INFORMATION (Tables)
 
Year
Ended
December 31,
2011
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization   Exploration
and Corporate
Development
  Foreign
Currency
Translation
Loss
(Gain)
  Loss on
Goldex Mine
  Impairment
Loss on
Meadowbank
Mine
  Segment
Income
(Loss)
 
 

Canada

  $ 1,217,858   $ 619,987   $ 198,219   $   $ 2,825   $ 302,893   $ 907,681   $ (813,747 )
 

Europe

    225,612     110,477     26,574         1,063             87,498  
 

Latin America

    378,329     145,614     36,988         (4,955 )           200,682  
 

Exploration

                75,721     (15 )           (75,706 )
                                     
 

 

  $ 1,821,799   $ 876,078   $ 261,781   $ 75,721   $ (1,082 ) $ 302,893   $ 907,681   $ (601,273 )
                                     

 

Segment loss

  $ (601,273 )
 

Corporate and Other

       
 

Interest and sundry expense

    (5,188 )
 

Net loss on sale and write-down of available-for-sale securities

    (3,662 )
 

Gain on derivative financial instruments

    3,683  
 

General and administrative

    (107,926 )
 

Provincial capital tax

    (9,223 )
 

Interest expense

    (55,039 )
         
 

Loss before income and mining taxes

  $ (778,628 )
         

 

 
Year
Ended
December 31, 2010
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization   Exploration
and Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 1,086,744   $ 499,621   $ 140,024   $   $ 22,815   $ 424,284  
 

Europe

    160,140     87,735     31,231         (2,780 )   43,954  
 

Latin America

    175,637     90,116     21,134         (2,126 )   66,513  
 

Exploration

            97     54,958     1,627     (56,682 )
                             
 

 

  $ 1,422,521   $ 677,472   $ 192,486   $ 54,958   $ 19,536   $ 478,069  
                             

 

Segment income

  $ 478,069  
 

Corporate and Other

       
 

Interest and sundry income

    10,254  
 

Gain on acquisition of Comaplex, net

    57,526  
 

Gain on sale of available-for-sale securities

    19,487  
 

Gain on derivative financial instruments

    7,612  
 

General and administrative

    (94,327 )
 

Provincial capital tax

    6,075  
 

Interest expense

    (49,493 )
         
 

Income before income and mining taxes

  $ 435,203  
         

 

 
Year
Ended
December 31, 2009
  Revenues
from
Mining
Operations
  Production
Costs
  Amortization   Exploration
and Corporate
Development
  Foreign Currency
Translation Loss
(Gain)
  Segment
Income
(Loss)
 
 

Canada

  $ 538,123   $ 252,035   $ 60,028   $   $ 36,499   $ 189,561  
 

Europe

    61,457     42,464     10,909         3,582     4,502  
 

Latin America

    14,182     11,819     1,524         (250 )   1,089  
 

Exploration

                36,279         (36,279 )
                             
 

 

  $ 613,762   $ 306,318   $ 72,461   $ 36,279   $ 39,831   $ 158,873  
                             

 

Segment income

  $ 158,873  
 

Corporate and Other

       
 

Interest and sundry income

    12,580  
 

Gain on sale of available-for-sale securities

    10,142  
 

Gain on derivative financial instruments

    3,592  
 

General and administrative

    (63,687 )
 

Provincial capital tax

    (5,014 )
 

Interest expense

    (8,448 )
         
 

Income before income and mining taxes

  $ 108,038  
         
    Total Assets as at  
 
  December 31, 2011   December 31, 2010  
 

Canada

  $ 3,205,158   $ 4,179,446  
 

Europe

    771,714     679,258  
 

Latin America

    1,020,078     619,263  
 

Exploration

    37,312     22,384  
             
 

 

  $ 5,034,262   $ 5,500,351  
             
 
    Capital Expenditures  
    2011   2010   2009  
 

Canada

  $ 319,728   $ 1,004,129   $ 435,098  
 

Europe

    95,549     67,894     84,955  
 

Latin America

    313,669     103,131     136,706  
 

Exploration

    8,418     97      
                 
 

 

  $ 737,364   $ 1,175,251   $ 656,759  
                 
 
TRADE RECEIVABLES AND REVENUES FROM MINING OPERATIONS (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Accounts receivable
 
 
 
Dore bars awaiting settlement
 
$ 24,281 
 
Concentrates awaiting settlement
75,899 
88,668 
 
Trade receivables
75,899 
112,949 
 
Product Information
 
 
 
Revenue from mining operation
1,821,799 
1,422,521 
613,762 
Percentage of revenue from precious metal to total revenue from mining operations
95.00% 
93.00% 
87.00% 
Gold
 
 
 
Product Information
 
 
 
Revenue from mining operation
1,563,760 
1,216,249 
474,875 
Silver
 
 
 
Product Information
 
 
 
Revenue from mining operation
171,725 
104,544 
59,155 
Zinc
 
 
 
Product Information
 
 
 
Revenue from mining operation
70,522 
77,544 
57,034 
Percentage of revenue from byproduct metals to total revenue from mining operations (as a percent)
4.00% 
5.00% 
9.00% 
Copper
 
 
 
Product Information
 
 
 
Revenue from mining operation
14,451 
22,219 
22,571 
Percentage of revenue from byproduct metals to total revenue from mining operations (as a percent)
1.00% 
2.00% 
4.00% 
Lead
 
 
 
Product Information
 
 
 
Revenue from mining operation
$ 1,341 
$ 1,965 
$ 127 
OTHER ASSETS (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Other current assets
 
 
 
Federal, provincial and other sales taxes receivable
$ 51,603,000 
$ 63,553,000 
 
Prepaid expenses
25,540,000 
10,449,000 
 
Meadowbank insurance receivable
8,765,000 
 
 
Prepaid royalty
7,684,000 
5,282,000 
 
Employee loans receivable
5,567,000 
4,498,000 
 
Other
11,210,000 
5,191,000 
 
Government refundables for local community improvements
 
803,000 
 
Other current assets, total
110,369,000 
89,776,000 
 
Schedule of Available-for-sale Securities
 
 
 
Proceeds from available-for-sale securities
9,400,000 
36,600,000 
41,000,000 
Gain on sale and write-down of available-for-sale securities
4,907,000 
19,487,000 
10,142,000 
Estimated fair value
145,411,000 
99,109,000 
 
Long-term ore in stockpile
64,392,000 
27,409,000 
 
Other assets
 
 
 
Deferred financing costs, less accumulated amortization
15,777,000 
16,780,000 
 
Accumulated amortization of non-current deferred financing costs
5,809,000 
2,249,000 
 
Prepaid royalty
 
8,777,000 
 
Other
7,879,000 
8,536,000 
 
Other assets non-current
88,048,000 
61,502,000 
 
Pinos Altos mine
 
 
 
Schedule of Available-for-sale Securities
 
 
 
Long-term ore in stockpile
7,100,000 
12,400,000 
 
Kittila mine
 
 
 
Schedule of Available-for-sale Securities
 
 
 
Long-term ore in stockpile
8,000,000 
 
 
Meadowbank mine
 
 
 
Schedule of Available-for-sale Securities
 
 
 
Long-term ore in stockpile
49,300,000 
 
 
Goldex mine
 
 
 
Schedule of Available-for-sale Securities
 
 
 
Long-term ore in stockpile
 
15,000,000 
 
Available-for-sale securities in an unrealized gain position
 
 
 
Schedule of Available-for-sale Securities
 
 
 
Cost (net of impairments)
127,344,000 
50,958,000 
 
Unrealized gains (losses) in accumulated other comprehensive income
16,408,000 
48,151,000 
 
Estimated fair value
143,752,000 
99,109,000 
 
Available-for-sale securities in an unrealized loss position
 
 
 
Schedule of Available-for-sale Securities
 
 
 
Cost (net of impairments)
1,717,000 
 
 
Unrealized gains (losses) in accumulated other comprehensive income
(58,000)
 
 
Estimated fair value
1,659,000 
 
 
Pre-impairment fair value of investments
1,700,000 
 
 
Total unrealized loss on the pre-impairment of investments
100,000 
 
 
Duration of impairment for securities not considered other-than-temporarily impaired (in months)
 
 
Write down of certain available-for-sale securities
$ 8,600,000 
 
 
Percentage of total fair value of investments in an unrealized loss position
1.10% 
 
 
PROPERTY, PLANT AND MINE DEVELOPMENT (Details) (USD $)
12 Months Ended
Dec. 31, 2011
period
Dec. 31, 2010
Property, Plant and Mine Development
 
 
Cost
$ 4,635,027,000 
$ 5,103,162,000 
Accumulated Amortization
739,672,000 
538,599,000 
Net Book Value
3,895,355,000 
4,564,563,000 
Capitalized costs of computer software
100,000 
300,000 
Amortization expense of computer software
800,000 
800,000 
Unamortized capitalized cost of computer software
4,400,000 
5,000,000 
Unamortized capitalized cost for leasehold improvements
3,200,000 
3,300,000 
Number of renewal periods after life of the lease that leasehold improvements are amortized over
 
Canada
 
 
Property, Plant and Mine Development
 
 
Net Book Value
2,433,527,000 
3,456,809,000 
Europe
 
 
Property, Plant and Mine Development
 
 
Net Book Value
674,258,000 
605,283,000 
Latin America
 
 
Property, Plant and Mine Development
 
 
Net Book Value
776,892,000 
500,211,000 
U.S.A.
 
 
Property, Plant and Mine Development
 
 
Net Book Value
10,678,000 
2,260,000 
Mining properties
 
 
Property, Plant and Mine Development
 
 
Cost
1,228,523,000 
1,885,476,000 
Accumulated Amortization
111,567,000 
44,823,000 
Net Book Value
1,116,956,000 
1,840,653,000 
Plant and equipment
 
 
Property, Plant and Mine Development
 
 
Cost
2,467,300,000 
2,123,191,000 
Accumulated Amortization
437,706,000 
321,907,000 
Net Book Value
2,029,594,000 
1,801,284,000 
Mine development costs
 
 
Property, Plant and Mine Development
 
 
Cost
869,746,000 
853,927,000 
Accumulated Amortization
190,399,000 
171,869,000 
Net Book Value
679,347,000 
682,058,000 
LaRonde Mine extension
 
 
Property, Plant and Mine Development
 
 
Cost
 
185,905,000 
Net Book Value
 
185,905,000 
Creston Mascota deposit at Pinos Altos
 
 
Property, Plant and Mine Development
 
 
Cost
 
54,663,000 
Net Book Value
 
54,663,000 
Meliadine Project
 
 
Property, Plant and Mine Development
 
 
Cost
69,458,000 
 
Net Book Value
69,458,000 
 
Meadowbank mine
 
 
Property, Plant and Mine Development
 
 
Net Book Value
$ 1,700,000,000 
 
FAIR VALUE MEASUREMENT (Details) (Fair value measured on recurring basis, USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
M
Total
 
Financial assets:
 
Cash equivalents and short-term investments
$ 7,645 
Available-for-sale securities
145,411 
Trade receivables
75,899 
Total financial assets
228,955 
Maximum term of maturity from the date of purchase to classify marketable securities as cash equivalents (in months)
Minimum term of maturity from the date of purchase to classify marketable securities as short-term investments (in months)
Financial liabilities:
 
Fair value of derivative financial instruments
4,404 
Level 1
 
Financial assets:
 
Available-for-sale securities
142,490 
Total financial assets
142,490 
Level 2
 
Financial assets:
 
Cash equivalents and short-term investments
7,645 
Available-for-sale securities
2,921 
Trade receivables
75,899 
Total financial assets
86,465 
Financial liabilities:
 
Fair value of derivative financial instruments
$ 4,404 
LONG-TERM DEBT (Details)
12 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2009
USD ($)
Dec. 31, 2008
USD ($)
Dec. 31, 2011
Credit Facilities
USD ($)
Dec. 31, 2010
Credit Facilities
USD ($)
Dec. 31, 2009
Credit Facilities
USD ($)
Dec. 31, 2011
Credit Facilities
CAD ($)
Aug. 4, 2011
Credit Facilities
USD ($)
Jun. 22, 2010
Credit Facilities
USD ($)
Dec. 31, 2011
First Credit Facility
Y
Jan. 10, 2008
First Credit Facility
USD ($)
Jun. 15, 2009
Second Credit Facility
USD ($)
Sep. 4, 2008
Second Credit Facility
USD ($)
Jan. 10, 2008
Secured revolving credit facility
USD ($)
Dec. 31, 2010
Unsecured financial security issuance agreement
CAD ($)
Apr. 30, 2010
Guaranteed senior unsecured notes
USD ($)
Dec. 31, 2011
Guaranteed senior unsecured notes
USD ($)
Dec. 31, 2010
Guaranteed senior unsecured notes
USD ($)
Apr. 30, 2010
Series A maturing 2017
USD ($)
Apr. 7, 2010
Series A maturing 2017
Apr. 30, 2010
Series B maturing 2020
USD ($)
Apr. 7, 2010
Series B maturing 2020
Apr. 30, 2010
Series C maturing 2022
USD ($)
Apr. 7, 2010
Series C maturing 2022
Debt instrument
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity of line of credit
 
 
 
 
 
 
 
 
 
 
 
$ 300,000,000 
 
$ 300,000,000 
 
 
 
 
 
 
 
 
 
 
 
Amount of secured revolving credit facility that was terminated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
300,000,000 
 
 
 
 
 
 
 
 
 
 
Lenders' percentage of aggregate commitments needed to extend the term of the facility
 
 
 
 
 
 
 
 
 
 
66.67% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional term of credit facility (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
300,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Amount available under credit facilities after amendment
 
 
 
 
 
 
 
 
1,200,000,000 
1,200,000,000 
 
 
600,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Amount drawn down on the credit facility
 
 
 
 
320,000,000 
50,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount available under credit facilities for future draw downs
 
 
 
 
849,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding letters of credit
 
 
 
 
 
 
 
79,600,000 
 
 
 
 
 
 
 
75,600,000 
 
 
 
 
 
 
 
 
 
Proceeds from private placement of guaranteed senior unsecured notes
475,000,000 
1,311,000,000 
625,000,000 
300,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
600,000,000 
 
 
115,000,000 
 
360,000,000 
 
125,000,000 
 
Interest rate (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.13% 
 
6.67% 
 
6.77% 
Interest expense
55,039,000 
49,493,000 
8,448,000 
2,952,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash interest payments
52,833,000 
41,429,000 
17,189,000 
 
1,700,000 
12,300,000 
14,000,000 
 
 
 
 
 
 
 
 
 
 
39,500,000 
19,800,000 
 
 
 
 
 
 
Cash standby fees
 
 
 
 
8,600,000 
6,700,000 
2,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense capitalized to construction in progress
$ 1,000,000 
$ 4,600,000 
$ 15,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average interest rate (as a percent)
5.02% 
5.43% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RECLAMATION PROVISION AND OTHER LIABILITIES (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Y
Dec. 31, 2010
Y
Dec. 31, 2009
RECLAMATION PROVISION AND OTHER LIABILITIES
 
 
 
Reclamation and closure costs
$ 105,443,000 
$ 91,641,000 
 
Long-term portion of capital lease obligations
26,184,000 
38,019,000 
 
Pension benefits
13,991,000 
11,307,000 
 
Goldex mine government grant and other
370,000 
4,569,000 
 
Reclamation provision and other liabilities
145,988,000 
145,536,000 
 
Environmental remediation liability, current
26,100,000 
 
 
Asset retirement obligations and environmental remediation liabilities
 
 
 
Asset retirement obligations, beginning of year
91,641,000 
62,847,000 
 
Current year additions and changes in estimate, net
9,653,000 
23,058,000 
 
Current year accretion
4,953,000 
3,176,000 
 
Liabilities settled
 
277,000 
 
Foreign exchange revaluation
(804,000)
2,837,000 
 
Asset retirement obligations and environmental remediation liabilities, end of year
105,443,000 
91,641,000 
 
Maximum percentage of government grants repayable
50.00% 
 
 
Period for repayment of grants (in years)
 
 
Average gold price above which the Goldex Grant must be repaid
620 
 
 
Goldex mine government grant
1,452,000 
1,485,000 
 
Executives Plan
 
 
 
Components of net pension plan expense
 
 
 
Service cost - benefits earned during the year
996,000 
981,000 
509,000 
Interest cost on projected benefit obligation
663,000 
613,000 
448,000 
Amortization of net transition asset, past service liability and net experience gains
171,000 
164,000 
148,000 
Prior service cost
26,000 
25,000 
23,000 
Recognized net actuarial loss (gain)
245,000 
 
(142,000)
Net pension plan expense
2,101,000 
1,783,000 
986,000 
Accumulated benefit obligation
11,400,000 
9,600,000 
 
Unamortized transition asset (liability)
500,000 
681,000 
 
Accrued employee benefit liability
7,292,000 
6,634,000 
 
Accumulated other comprehensive income
 
 
 
Initial transition obligation
500,000 
681,000 
 
Past service liability
76,000 
104,000 
 
Net experience losses
3,550,000 
2,179,000 
 
Net liability
11,418,000 
9,598,000 
 
Components of the expected recognition in 2012 of amounts in accumulated other comprehensive income
 
 
 
Transition obligation
166,000 
 
 
Past service cost
25,000 
 
 
Net actuarial loss
704,000 
 
 
Expected recognition in 2012 of amounts in accumulated other comprehensive income (loss)
895,000 
 
 
Reconciliation of the market value of plan assets
 
 
 
Fair value of plan assets, beginning of year
2,443,000 
1,635,000 
 
Agnico-Eagle's contribution
1,156,000 
1,397,000 
 
Benefit payments
(578,000)
(699,000)
 
Effect of exchange rate changes
(69,000)
110,000 
 
Fair value of plan assets, end of year
2,952,000 
2,443,000 
1,635,000 
Reconciliation of projected benefit obligation
 
 
 
Projected benefit obligation, beginning of year
12,041,000 
7,998,000 
 
Service cost
996,000 
981,000 
 
Interest cost
663,000 
613,000 
 
Actuarial losses
1,704,000 
2,718,000 
 
Benefit payments
(696,000)
(812,000)
 
Effect of exchange rate changes
(338,000)
543,000 
 
Projected benefit obligation, end of year
14,370,000 
12,041,000 
7,998,000 
Deficiency of plan assets compared with projected benefit obligation
(11,418,000)
(9,598,000)
 
Comprised of :
 
 
 
Unamortized transition liability
(500,000)
(681,000)
 
Unamortized net experience loss
(3,626,000)
(2,283,000)
 
Accrued liabilities
(7,292,000)
(6,634,000)
 
Excess (deficiency) of plan assets over projected benefit obligation
(11,418,000)
(9,598,000)
 
Weighted-average assumptions to determine benefit obligation
 
 
 
Weighted average discount rate - net periodic pension cost (as a percent)
5.20% 
7.00% 
 
Weighted average discount rate - projected benefit obligation (as a percent)
4.45% 
5.20% 
 
Weighted average rate of compensation increase (as a percent)
3.00% 
3.00% 
 
Estimated average remaining service life for the plan (in years)
3.0 
4.0 
 
Estimated future benefit paid from each plan
 
 
 
2012
415,000 
 
 
2013
472,000 
 
 
2014
469,000 
 
 
2015
465,000 
 
 
2016
461,000 
 
 
2017-2021
$ 2,229,000 
 
 
RECLAMATION PROVISION AND OTHER LIABILITIES (Details 2) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Basic defined contribution pension plan
 
 
 
Defined contribution plan
 
 
 
Employer contribution to defined contribution plan, percentage of base employment compensation (as a percent)
5.00% 
 
 
Defined contribution pension plan expenses
$ 10.7 
$ 8.8 
$ 6.5 
Supplemental defined contribution pension plan
 
 
 
Defined contribution plan
 
 
 
Additional contribution by employer to defined contribution plan (as a percent)
10.00% 
 
 
Defined contribution pension plan expenses
$ 0.9 
$ 1.1 
$ 0.9 
SHAREHOLDERS' EQUITY (Details)
1 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended
Feb. 28, 2012
USD ($)
Jul. 31, 2010
USD ($)
Dec. 31, 2008
USD ($)
Y
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2009
USD ($)
Dec. 31, 2009
CAD ($)
Dec. 3, 2008
USD ($)
Jul. 31, 2009
Goldex mine
USD ($)
Nov. 30, 2011
Grayd
Nov. 18, 2011
Grayd
USD ($)
May 31, 2009
Abitibi
USD ($)
claim
May 26, 2009
Abitibi
Jul. 31, 2010
Meliadine Mine Project
Jul. 6, 2010
Meliadine Mine Project
USD ($)
SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issued common shares including treasury shares
 
 
 
170,859,604 
168,763,496 
 
 
 
 
 
 
 
 
 
 
Treasury shares related to restricted share unit plan
 
 
 
45,868 
43,141 
 
 
 
 
 
 
 
 
 
 
Dividends declared (in dollars per share)
$ 0.2 
 
 
$ 0 
$ 0.64 
$ 0.18 
 
 
 
 
 
 
 
 
 
Shares issued under flow-through share private placements
 
 
 
 
 
358,900 
358,900 
 
 
 
 
 
 
 
 
Increase in share capital due to common shares issued under flow-through share private placements, net of issuance costs (in dollars)
 
 
 
 
 
$ 19,200,000 
 
 
 
 
 
 
 
 
 
Amount renounced to investors for income tax purposes (in dollars)
 
 
 
 
 
 
30,600,000 
 
 
 
 
 
 
 
 
Units issued in private placement (in shares)
 
 
9,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
Common shares included in each unit of private placement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common share purchase warrants included in each unit of private placement
 
 
0.5 
 
 
 
 
 
 
 
 
 
 
 
 
Warrant exercise price (in dollars per share)
 
 
 
 
 
 
 
$ 47.25 
 
 
 
 
 
 
 
Warrant exercise period (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional warrants issued as consideration for the lead purchaser's commitment (in shares)
 
 
4,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Net proceeds from private placement (in dollars)
 
 
281,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Share issuance costs (in dollars)
 
 
8,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
Additional common shares issued if all outstanding warrants are exercised
 
 
8,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
Business and Properties Acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares issued for acquisition of mining claims and properties
 
15,000 
 
 
 
 
 
 
18,000 
1,250,477 
 
15,825 
 
10,210,848 
 
Cost of acquisition of mining located in Abitibi region of Quebec (in dollars)
 
 
 
 
 
 
 
 
 
 
 
900,000 
 
 
 
Agnico-Eagle shares issued for acquisition (in dollars)
 
 
 
 
 
 
 
 
 
 
56,146,000 
 
 
 
579,000,000 
Percentage of interest acquired in mining located in Abitibi region of Quebec
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
Number of mining claims acquired
 
 
 
 
 
 
 
 
 
 
 
52 
 
 
 
Amount received per share for shares issued under options granted by predecessor to the Company (in dollars per share)
 
 
 
 
 
 
 
 
$ 500 
 
 
 
 
 
 
Amount received as consideration for shares issued in connection with the exercise of an option granted relating to the acquisition of certain properties relating to the Goldex Mine (in dollars)
 
800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated other comprehensive income (loss), net of tax
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative translation adjustment from electing US dollar as principal reporting currency
 
 
 
(16,206,000)
(16,206,000)
 
 
 
 
 
 
 
 
 
 
Unrealized gain on available-for-sale securities
 
 
 
16,350,000 
48,151,000 
 
 
 
 
 
 
 
 
 
 
Unrealized loss on derivative contracts
 
 
 
(4,404,000)
 
 
 
 
 
 
 
 
 
 
 
Unrealized loss on pension liability
 
 
 
(5,219,000)
(4,420,000)
 
 
 
 
 
 
 
 
 
 
Tax effect of unrealized loss on derivative contracts
 
 
 
1,491,000 
 
 
 
 
 
 
 
 
 
 
 
Tax effect of unrealized loss on pension liability
 
 
 
882,000 
865,000 
 
 
 
 
 
 
 
 
 
 
Realized gain on disposition of available-for-sale securities reclassified due to disposition of securities
 
 
 
$ 4,900,000 
$ 19,500,000 
$ 10,100,000 
 
 
 
 
 
 
 
 
 
Net income (loss) per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding - basic
 
 
 
169,352,896 
162,342,686 
155,942,151 
155,942,151 
 
 
 
 
 
 
 
 
Add : Dilutive impact of employee stock options (in shares)
 
 
 
 
1,192,530 
1,256,103 
1,256,103 
 
 
 
 
 
 
 
 
Dilutive impact of warrants (in shares)
 
 
 
 
2,263,902 
1,392,752 
1,392,752 
 
 
 
 
 
 
 
 
Dilutive impact of shares related to RSU plan
 
 
 
 
43,141 
29,882 
29,882 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding - diluted
 
 
 
169,352,896 
165,842,259 
158,620,888 
158,620,888 
 
 
 
 
 
 
 
 
Anti-dilutive shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee stock options excluded from the computation of diluted weighted average common shares (in shares)
 
 
 
 
58,750 
42,500 
42,500 
 
 
 
 
 
 
 
 
STOCK-BASED COMPENSATION (Details)
In Millions, except Share data, unless otherwise specified
12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Dec. 31, 2011
USD ($)
Y
Dec. 31, 2011
CAD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2010
CAD ($)
Dec. 31, 2009
USD ($)
Dec. 31, 2009
CAD ($)
Jan. 31, 2012
Employee Stock Option Plan
CAD ($)
Jan. 31, 2010
Employee Stock Option Plan
CAD ($)
Dec. 31, 2011
Employee Stock Option Plan
USD ($)
Dec. 31, 2011
Employee Stock Option Plan
CAD ($)
Dec. 31, 2010
Employee Stock Option Plan
USD ($)
Dec. 31, 2010
Employee Stock Option Plan
CAD ($)
Dec. 31, 2009
Employee Stock Option Plan
USD ($)
Dec. 31, 2009
Employee Stock Option Plan
CAD ($)
Dec. 31, 2008
Employee Stock Option Plan
Dec. 31, 2006
Employee Stock Option Plan
Dec. 31, 2004
Employee Stock Option Plan
Dec. 31, 2001
Employee Stock Option Plan
May 31, 2001
Employee Stock Option Plan
May 31, 2008
Incentive Share Purchase Plan
Dec. 31, 2011
Incentive Share Purchase Plan
USD ($)
Dec. 31, 2010
Incentive Share Purchase Plan
USD ($)
Dec. 31, 2009
Incentive Share Purchase Plan
USD ($)
Dec. 31, 2011
Restricted Share Unit Plan
USD ($)
Dec. 31, 2010
Restricted Share Unit Plan
USD ($)
Dec. 31, 2009
Restricted Share Unit Plan
USD ($)
STOCK-BASED COMPENSATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum number of shares subject to options as a percentage of company's common shares issued and outstanding
5.00% 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation arrangements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum term of options granted before April 24, 2001 under ESOP (in years)
10 
10 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum term of options granted after April 24, 2001 under ESOP (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares reserved for issuance before increase in the number of shares approved
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,500,000 
 
 
 
 
 
 
Additional number of shares reserved for issuance
 
 
 
 
 
 
 
 
3,000,000 
3,000,000 
1,300,000 
1,300,000 
 
 
6,000,000 
3,000,000 
2,000,000 
2,000,000 
 
 
 
 
 
 
 
 
Common shares reserved for issuance, authorized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,000,000 
6,000,000 
5,000,000 
 
 
 
 
 
 
Common shares reserved for issuance
 
 
 
 
 
 
 
 
8,959,051 
8,959,051 
 
 
 
 
 
 
 
 
 
 
2,150,088 
2,510,921 
2,740,504 
 
 
 
Stock options granted (in shares)
 
 
 
 
 
 
3,072,000 
 
2,630,785 
2,630,785 
2,926,080 
2,926,080 
2,276,000 
2,276,000 
 
 
 
 
 
 
 
 
 
 
 
 
Stock options vested (in shares)
 
 
 
 
 
 
768,000 
 
657,696 
657,696 
731,520 
731,520 
569,000 
569,000 
 
 
 
 
 
 
 
 
 
 
 
 
Stock options vesting period that are not vested immediately (in years)
 
 
 
 
 
 
3 years 
3 years 
3 years 
3 years 
3 years 
3 years 
3 years 
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
Stock options activity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options outstanding, beginning of year (in shares)
 
 
 
 
 
 
8,959,051 
5,707,940 
6,762,704 
6,762,704 
5,707,940 
5,707,940 
4,752,440 
4,752,440 
 
 
 
 
 
 
 
 
 
 
 
 
Options granted (in shares)
 
 
 
 
 
 
3,072,000 
 
2,630,785 
2,630,785 
2,926,080 
2,926,080 
2,276,000 
2,276,000 
 
 
 
 
 
 
 
 
 
 
 
 
Options exercised (in shares)
 
 
 
 
 
 
 
 
(308,688)
(308,688)
(1,627,766)
(1,627,766)
(1,238,000)
(1,238,000)
 
 
 
 
 
 
 
 
 
 
 
 
Options forfeited (in shares)
 
 
 
 
 
 
 
 
(125,750)
(125,750)
(243,550)
(243,550)
(82,500)
(82,500)
 
 
 
 
 
 
 
 
 
 
 
 
Options outstanding, end of year (in shares)
 
 
 
 
 
 
 
 
8,959,051 
8,959,051 
6,762,704 
6,762,704 
5,707,940 
5,707,940 
 
 
 
 
 
 
 
 
 
 
 
 
Options exercisable at end of period (in shares)
 
 
 
 
 
 
 
 
5,122,047 
5,122,047 
2,972,857 
2,972,857 
2,445,615 
2,445,615 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Exercise Price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding, beginning of year, weighted average exercise price (in Canadian dollars per share)
 
 
 
 
 
 
$ 62.88 
$ 53.85 
 
$ 56.94 
 
$ 53.85 
 
$ 44.57 
 
 
 
 
 
 
 
 
 
 
 
 
Granted, weighted average exercise price (in Canadian dollars per share)
 
 
 
 
 
 
 
 
 
$ 76.12 
 
$ 57.55 
 
$ 62.65 
 
 
 
 
 
 
 
 
 
 
 
 
Exercised, weighted average exercise price (in Canadian dollars per share)
 
 
 
 
 
 
 
 
 
$ 43.62 
 
$ 47.02 
 
$ 34.28 
 
 
 
 
 
 
 
 
 
 
 
 
Cancelled, weighted average exercise price (in Canadian dollars per share)
 
 
 
 
 
 
 
 
 
$ 67.47 
 
$ 58.03 
 
$ 55.99 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding, end of year, weighted average exercise price (in Canadian dollars per share)
 
 
 
 
 
 
 
 
 
$ 62.88 
 
$ 56.94 
 
$ 53.85 
 
 
 
 
 
 
 
 
 
 
 
 
Non-vested Stock Options
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested, beginning of year (in shares)
 
 
 
 
 
 
3,780,879 
 
3,789,847 
3,789,847 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted (in shares)
 
 
 
 
 
 
 
 
2,630,785 
2,630,785 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested (in shares)
 
 
 
 
 
 
 
 
(2,537,253)
(2,537,253)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forfeited (unvested) (in shares)
 
 
 
 
 
 
 
 
(102,500)
(102,500)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested, end of year (in shares)
 
 
 
 
 
 
 
 
3,780,879 
3,780,879 
3,789,847 
3,789,847 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Grant Date Fair Value - Non-Vested Stock Options
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested, beginning of year (in Canadian dollars per share)
 
 
 
 
 
 
 
 
 
$ 17.79 
 
$ 18.71 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted (in Canadian dollars per share)
 
$ 17.05 
 
$ 16.31 
 
$ 24.52 
 
 
 
$ 17.05 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested (in Canadian dollars per share)
 
 
 
 
 
 
 
 
 
$ 18.40 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forfeited (unvested) (in Canadian dollars per share)
 
 
 
 
 
 
 
 
 
$ 17.77 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested, end of year (in Canadian dollars per share)
 
 
 
 
 
 
 
 
 
$ 17.79 
 
$ 18.71 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash received for options exercised
$ 13.6 
 
$ 74.7 
 
$ 36.6 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total intrinsic value of options exercised
8.0 
 
46.5 
 
43.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average grant-date fair value of options granted (in Canadian dollars per share)
 
$ 17.05 
 
$ 16.31 
 
$ 24.52 
 
 
 
$ 17.05 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fair value of options vested
 
 
 
 
 
 
 
 
46.7 
 
36.7 
 
27.4 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contribution limit as a percentage of annual salary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.00% 
 
 
 
 
 
Company match, as a percentage of employee contribution
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
 
Share-based compensation cost recognized
 
 
 
 
 
 
 
 
42.2 
 
37.8 
 
27.7 
 
 
 
 
 
 
 
6.4 
5.0 
3.8 
3.3 
3.0 
 
Number of common shares subscribed under the Purchase Plan
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
360,833 
229,583 
196,649 
 
 
 
Value of common shares subscribed under the Purchase Plan
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
19.2 
15.0 
11.3 
 
 
 
Contribution by the company to employee benefit trust
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.7 
4.0 
3.0 
Compensation cost capitalized as a part of property, plant and mine development
 
 
 
 
 
 
 
 
1.4 
 
1.3 
 
8.7 
 
 
 
 
 
 
 
 
 
 
 
0.1 
 
Compensation expense included in production, administration and exploration expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 3.3 
$ 2.9 
 
STOCK-BASED COMPENSATION (Details 2)
In Millions, except Share data, unless otherwise specified
1 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Jan. 31, 2012
Employee Stock Option Plan
Dec. 31, 2011
Employee Stock Option Plan
USD ($)
Y
Dec. 31, 2010
Employee Stock Option Plan
USD ($)
Y
Dec. 31, 2009
Employee Stock Option Plan
USD ($)
Y
Dec. 31, 2011
Employee Stock Option Plan
CAD ($)
Dec. 31, 2011
Restricted Share Unit Plan
USD ($)
Dec. 31, 2010
Restricted Share Unit Plan
USD ($)
Dec. 31, 2009
Restricted Share Unit Plan
Dec. 31, 2011
C$23.02 - C$83.08
Employee Stock Option Plan
USD ($)
Dec. 31, 2011
C$23.02 - C$83.08
Employee Stock Option Plan
CAD ($)
Y
Dec. 31, 2011
C$23.02 - C$36.23
Employee Stock Option Plan
USD ($)
Dec. 31, 2011
C$23.02 - C$36.23
Employee Stock Option Plan
CAD ($)
Y
Dec. 31, 2011
C$39.18 - C$59.71
Employee Stock Option Plan
USD ($)
Dec. 31, 2011
C$39.18 - C$59.71
Employee Stock Option Plan
CAD ($)
Y
Dec. 31, 2011
C$60.72 - C$83.08
Employee Stock Option Plan
USD ($)
Dec. 31, 2011
C$60.72 - C$83.08
Employee Stock Option Plan
CAD ($)
Y
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Range of exercise price, low end of the range (in dollars per share)
 
 
 
 
 
 
 
 
$ 23.02 
 
$ 23.02 
 
$ 39.18 
 
$ 60.72 
 
Range of exercise price, high end of the range (in dollars per share)
 
 
 
 
 
 
 
 
$ 83.08 
 
$ 36.23 
 
$ 59.71 
 
$ 83.08 
 
Options Outstanding, Number (in shares)
 
 
 
 
 
 
 
 
 
8,959,051 
 
16,000 
 
4,361,866 
 
4,581,185 
Options Outstanding, Weighted Average Remaining Contractual Life (in years)
 
 
 
 
 
 
 
 
 
2.59 
 
1.84 
 
2.00 
 
3.16 
Options Outstanding, Weighted Average Exercise Price (in Canadian dollars per share)
 
 
 
 
 
 
 
 
 
$ 62.88 
 
$ 33.26 
 
$ 54.94 
 
$ 70.55 
Options Exercisable, Number (in shares)
 
 
 
 
 
 
 
 
 
5,178,172 
 
16,000 
 
3,070,576 
 
2,091,596 
Options Exercisable, Weighted Average Exercise Price (in Canadian dollars per share)
 
 
 
 
 
 
 
 
 
$ 59.38 
 
$ 33.26 
 
$ 54.17 
 
$ 67.22 
Weighted average remaining contractual term of options exercisable (in years)
 
2.6 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common shares reserved for issuance
 
8,959,051 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of un-optioned shares available for granting of options
 
3,262,135 
2,771,420 
4,155,750 
 
 
 
 
 
 
 
 
 
 
 
 
Stock options vested (in shares)
768,000 
657,696 
731,520 
569,000 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum term of options granted under ESOP (in years)
 
 
 
 
 
 
 
2 years 
 
 
 
 
 
 
 
 
Fair value of options weighted average assumptions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pricing model used for valuation of options
 
 
 
 
 
Black-Scholes 
 
 
 
 
 
 
 
 
 
 
Risk-free interest rate (as a percent)
 
1.95% 
1.86% 
1.27% 
 
 
 
 
 
 
 
 
 
 
 
 
Expected life of options (in years)
 
2.5 
2.5 
2.5 
 
 
 
 
 
 
 
 
 
 
 
 
Expected volatility of the Company's share price (as a percent)
 
34.70% 
43.80% 
64.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Expected dividend yield (as a percent)
 
0.89% 
0.42% 
0.42% 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate intrinsic value of options outstanding
 
 
 
 
$ (231.4)
 
 
 
 
 
 
 
 
 
 
 
Aggregate intrinsic value of options exercisable
 
 
 
 
(115.6)
 
 
 
 
 
 
 
 
 
 
 
The total compensation expense for the ESOP recognized in the general and administrative line item of the consolidated statements of income (loss)
 
42.2 
37.8 
27.7 
 
3.3 
3.0 
 
 
 
 
 
 
 
 
 
Total compensation cost related to non-vested options not yet recognized
 
32.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average period over which unrecognized compensation cost expected to be recognized (in years)
 
1.7 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation cost capitalized as a part of property, plant and mine development
 
$ 1.4 
$ 1.3 
$ 8.7 
 
 
$ 0.1 
 
 
 
 
 
 
 
 
 
INCOME AND MINING TAXES (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income and mining taxes recovery
 
 
 
Current provision
$ 62,470,000 
$ 36,159,000 
$ 1,171,000 
Deferred provision (recovery)
(272,143,000)
66,928,000 
20,329,000 
Total income and mining tax
(209,673,000)
103,087,000 
21,500,000 
Cash income and mining taxes paid
110,900,000 
25,200,000 
8,800,000 
Reconciliation of income tax rates
 
 
 
Combined federal and composite provincial tax rates (as a percent)
27.80% 
29.60% 
30.90% 
Increase (decrease) in tax rates resulting from:
 
 
 
Provincial mining duties (as a percent)
5.90% 
6.80% 
16.10% 
Tax law change (US$ election) (as a percent)
(2.70%)
(5.10%)
(24.40%)
Impact of foreign tax rates (as a percent)
(0.20%)
(0.50%)
(4.90%)
Permanent differences (as a percent)
(1.60%)
(4.20%)
2.20% 
Valuation allowance (as a percent)
(0.30%)
(0.20%)
 
Effect of changes in income tax rates (as a percent)
(2.00%)
(2.70%)
 
Actual rate as a percentage of pre-tax income
26.90% 
23.70% 
19.90% 
Deferred income and mining tax assets and liabilities
 
 
 
Mining properties future income and mining tax liabilities
704,379,000 
966,485,000 
 
Net operating and capital loss carry-forwards future income and mining tax liabilities
(104,332,000)
(133,042,000)
 
Mining duties future income and mining tax liabilities
(88,670,000)
(71,492,000)
 
Reclamation provisions future income and mining tax liabilities
(51,926,000)
(30,752,000)
 
Valuation allowance future income and mining tax liabilities
39,121,000 
4,855,000 
 
Deferred income and mining tax liabilities
498,572,000 
736,054,000 
 
Reconciliation of the beginning and ending amount of unrecognized tax benefits
 
 
 
Unrecognized tax benefit, beginning of year
1,630,000 
5,608,000 
 
Reductions
(430,000)
(3,978,000)
 
Unrecognized tax benefit, end of year
1,200,000 
1,630,000 
5,608,000 
Canada
 
 
 
Income and mining taxes recovery
 
 
 
Current provision
58,752,000 
34,217,000 
1,171,000 
Deferred provision (recovery)
(337,408,000)
47,083,000 
27,083,000 
Mexico
 
 
 
Income and mining taxes recovery
 
 
 
Current provision
3,496,000 
1,942,000 
 
Deferred provision (recovery)
54,996,000 
18,759,000 
 
Finland
 
 
 
Income and mining taxes recovery
 
 
 
Current provision
222,000 
 
 
Deferred provision (recovery)
$ 10,269,000 
$ 1,086,000 
$ (6,754,000)
ACQUISITIONS (Details) (USD $)
1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended 12 Months Ended
Jul. 31, 2010
Dec. 31, 2010
Jan. 31, 2012
Grayd
Nov. 30, 2011
Grayd
Dec. 31, 2011
Grayd
Dec. 31, 2010
Grayd
Nov. 18, 2011
Grayd
Jan. 31, 2012
Grayd
Acquisition
Jan. 23, 2012
Grayd
Acquisition
Sep. 30, 2011
La India Mine Project
Dec. 31, 2011
Tarachi exploration property
Dec. 20, 2011
Summit Gold Project
Jul. 31, 2010
Meliadine Mine Project
Dec. 31, 2010
Meliadine Mine Project
Dec. 31, 2009
Meliadine Mine Project
Jul. 6, 2010
Meliadine Mine Project
Apr. 2, 2010
Meliadine Mine Project
Business acquisition details
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Agnico-Eagle shares Comaplex shareholders received for each Comaplex share held
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.1576 
Number of Geomark shares Comaplex shareholders other than Agnico-Eagle and Performa received for each Comaplex share held
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of outstanding shares (fully diluted) of Comaplex held by Perfora prior to the acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
17.30% 
Percentage of outstanding shares (fully diluted) of Comaplex held by Agnico-Eagle prior to the acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12.30% 
Number of shares issued for acquisition of mining claims and properties
15,000 
 
68,941 
1,250,477 
 
 
 
68,941 
 
 
 
 
10,210,848 
 
 
 
 
Transaction costs associated with the acquisition
 
 
 
 
 
 
$ 3,800,000 
 
 
 
 
 
 
 
 
$ 7,000,000 
 
Total purchase price:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comaplex shares previously purchased
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
88,683,000 
 
Maximum cash payable to total consideration
 
 
 
 
 
 
165,954,000 
 
9,300,000 
 
 
8,500,000 
 
 
 
 
 
Agnico-Eagle shares issued for acquisition
 
 
 
 
 
 
56,146,000 
 
 
 
 
 
 
 
 
578,955,000 
 
Total purchase price to allocate
 
 
 
 
 
 
222,100,000 
 
11,800,000 
 
 
 
 
 
 
667,638,000 
 
Fair value of assets acquired:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property
 
 
 
 
 
 
282,000,000 
 
 
 
 
 
 
 
 
642,610,000 
 
Goodwill
 
 
 
 
 
 
29,215,000 
 
 
 
 
 
 
 
 
200,064,000 
 
Cash and cash equivalents
 
 
 
 
 
 
2,907,000 
 
 
 
 
 
 
 
 
 
 
Trade receivables
 
 
 
 
 
 
469,000 
 
 
 
 
 
 
 
 
 
 
Other current assets
 
 
 
 
 
 
1,700,000 
 
 
 
 
 
 
 
 
 
 
Supplies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
542,000 
 
Equipment
 
 
 
 
 
 
56,000 
 
 
 
 
 
 
 
 
2,381,000 
 
Accounts payable and accrued liabilities
 
 
 
 
 
 
(9,767,000)
 
 
 
 
 
 
 
 
 
 
Asset retirement obligation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3,400,000)
 
Non-controlling interest
 
 
 
 
 
 
12,251,000 
 
 
 
 
 
 
 
 
 
 
Deferred tax liability
 
 
 
 
 
 
(72,229,000)
 
 
 
 
 
 
 
 
(174,559,000)
 
Net assets acquired
 
 
 
 
 
 
222,100,000 
 
 
 
 
 
 
 
 
667,638,000 
 
Cost base of Comaplex shares previously purchased
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
24,100,000 
 
Non-cash gain on acquisition of Comaplex
 
64,508,000 
 
 
 
 
 
 
 
 
 
 
 
64,508,000 
 
 
 
Pro forma results of operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pro forma net income (loss) attributed to common shareholders
 
 
 
 
$ (582,762,000)
$ 324,708,000 
 
 
 
 
 
 
 
$ 331,516,000 
$ 85,371,000 
 
 
Pro forma net income (loss) per share-basic (in dollars per share)
 
 
 
 
$ (3.42)
$ 1.98 
 
 
 
 
 
 
 
$ 2.04 
$ 0.55 
 
 
Percentage of outstanding shares acquired
 
 
 
 
 
 
94.77% 
 
 
100.00% 
100.00% 
100.00% 
 
 
 
 
 
Percentage of net smelter return the Company has to pay in royalties
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
 
 
Trade payables
$ 104,699 
$ 91,974 
Wages payable
27,247 
21,583 
Accrued liabilities
47,462 
33,390 
Goldex mine government grant
1,452 
1,485 
Other liabilities
22,687 
11,943 
Accounts payable and accrued liabilities
$ 203,547 
$ 160,375 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 20, 2011
Summit Gold Project
Dec. 31, 2011
Kittila mine
M
Dec. 31, 2011
Meadowbank mine
Dec. 31, 2011
Meadowbank mine
Maximum
Dec. 31, 2011
Pinos Altos mine
Minimum
Dec. 31, 2011
Pinos Altos mine
Maximum
Dec. 31, 2011
Abitibi
Minimum
Dec. 31, 2011
Abitibi
Maximum
COMMITMENTS AND CONTINGENCIES
 
 
 
 
 
 
 
 
 
Guarantees provided in the form of letters of credit
$ 119,000,000 
 
 
 
 
 
 
 
 
Payment of royalty
 
 
 
 
 
 
 
 
 
Number of months after mining operations commence that the Company has to start paying royalties
 
 
12 
 
 
 
 
 
 
Percentage of net smelter return the Company has to pay in royalties
 
2.00% 
2.00% 
 
 
 
 
 
 
Percentage of net profits interest royalty
 
 
 
12.00% 
 
 
 
 
 
Percentage of gross revenue which annual deductions are limited to
 
 
 
 
85.00% 
 
 
 
 
Royalty Payment Percentage of Adjusted Net Profit
 
 
 
 
14.00% 
 
 
 
 
Percentage of net profits interest royalty and net smelter return royalty
 
 
 
 
 
2.50% 
3.50% 
0.50% 
5.00% 
Purchase commitments
 
 
 
 
 
 
 
 
 
2012
11,481,000 
 
 
 
 
 
 
 
 
2013
7,141,000 
 
 
 
 
 
 
 
 
2014
7,853,000 
 
 
 
 
 
 
 
 
2015
4,671,000 
 
 
 
 
 
 
 
 
2016
4,716,000 
 
 
 
 
 
 
 
 
Subsequent years
26,452,000 
 
 
 
 
 
 
 
 
Total
$ 62,314,000 
 
 
 
 
 
 
 
 
LEASES (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Y
Dec. 31, 2010
agreement
Dec. 31, 2009
agreement
LEASES
 
 
 
Number of sale-leaseback agreements
 
Average Effective Annual Interest Rate (as a percent)
6.18% 
 
 
Average Length of Contract (in years)
4.5 
 
 
Gross amount of assets under sale-leaseback
$ 33.6 
$ 33.6 
 
LEASES (Details 2) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Future minimum lease payment under capital lease
 
 
 
2012
$ 12,714,000 
 
 
2013
15,520,000 
 
 
2014
8,829,000 
 
 
2015
3,567,000 
 
 
Total minimum lease payments
40,630,000 
54,476,000 
 
Less amount representing interest
3,378,000 
5,865,000 
 
Present value of net minimum lease payments
37,252,000 
48,611,000 
 
Less: current portion
11,068,000 
10,592,000 
 
Long-term portion of capital lease obligations
26,184,000 
38,019,000 
 
Gross amount of assets under capital leases
56,900,000 
56,900,000 
51,700,000 
Minimum Lease Payment under operating leases
 
 
 
2012
1,676,000 
 
 
2013
946,000 
 
 
2014
755,000 
 
 
2015
696,000 
 
 
2016
696,000 
 
 
Thereafter
3,822,000 
 
 
Total
8,591,000 
 
 
Total rental expense for operating leases
$ 900,000 
$ 4,100,000 
$ 3,700,000 
Kittila mine
 
 
 
Capital lease of lessee
 
 
 
Capital lease period (in years)
 
 
Effective Annual Interest Rate (as a percent)
4.99% 
 
 
Meadowbank mine
 
 
 
Capital lease of lessee
 
 
 
Capital lease period (in years)
 
 
Effective Annual Interest Rate (as a percent)
5.64% 
 
 
RESTRICTED CASH (Details) (USD $)
1 Months Ended
Dec. 31, 2011
Dec. 31, 2010
RESTRICTED CASH
 
 
Restricted cash
$ 35,441,000 
$ 2,510,000 
Contribution to qualified environmental trust ("QET")
$ 32,000,000 
 
FINANCIAL INSTRUMENTS (Details)
12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2009
USD ($)
Dec. 31, 2011
Zinc
USD ($)
usdperMT
Dec. 31, 2010
Zinc
USD ($)
usdperMT
Dec. 31, 2009
Zinc
USD ($)
Dec. 31, 2011
Silver
USD ($)
Dec. 31, 2010
Silver
USD ($)
Dec. 31, 2011
Copper
USD ($)
Dec. 31, 2010
Copper
USD ($)
Dec. 31, 2009
Copper
USD ($)
Dec. 31, 2011
Call Options Written
USD ($)
Dec. 31, 2010
Call Options Written
USD ($)
Dec. 31, 2009
Call Options Written
USD ($)
Dec. 31, 2011
Call Options Written
Zinc
MT
usdperMT
Dec. 31, 2010
Call Options Written
Zinc
MT
usdperMT
Dec. 31, 2011
Foreign exchange forward contract
USD ($)
Dec. 31, 2010
Foreign exchange forward contract
USD ($)
Dec. 31, 2011
Foreign exchange forward contract
Designated as hedges
USD ($)
Dec. 31, 2011
Foreign exchange forward contract
Designated as hedges
CAD ($)
Dec. 31, 2011
Foreign exchange forward contract
Not designated as hedges
USD ($)
Dec. 31, 2011
Foreign exchange forward contract
Not designated as hedges
CAD ($)
Dec. 31, 2011
Extendible foreign exchange flat forward
USD ($)
Dec. 31, 2010
Extendible foreign exchange flat forward
USD ($)
Dec. 31, 2011
Put options purchased
Zinc
MT
usdperMT
Dec. 31, 2010
Put options purchased
Zinc
MT
usdperMT
Derivative
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of expenditures hedged
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 60,000,000 
 
$ 150,000,000 
 
 
 
 
 
Amount of expenditures hedged, expiring each month
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25,000,000 
 
 
 
 
 
 
 
Exchange rate under foreign exchange forward contract (in CAD per US dollar)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.99 
 
0.99 
 
 
 
 
Exchange rate under foreign exchange forward contract for expiry (in CAD per US dollar)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.01 
 
 
 
 
 
 
Amount of future expenditures hedged
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
300,000,000 
 
 
 
 
 
 
 
Loss on derivative financial instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,500,000 
 
1,400,000 
 
 
 
 
 
Gain (Loss) on derivative financial instruments
 
 
 
3,400,000 
3,700,000 
 
(3,400,000)
(3,100,000)
 
 
 
 
 
 
 
 
 
1,797,000 
(4,400,000)
 
 
 
(1,407,000)
 
 
 
Call option premiums generated
 
 
 
 
 
 
 
 
 
 
 
5,000,000 
4,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Zinc options (in metric tonnes)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,000 
15,000 
 
 
 
 
 
 
 
 
20,000 
15,000 
Strike price for option (in dollars per metric tonne)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,500 
2,500 
 
 
 
 
 
 
 
 
2,200 
2,200 
Options expiring each month, beginning from February 28 (2011) or March 31 (2010) (in metric tonnes)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,000 
1,500 
 
 
 
 
 
 
 
 
2,000 
1,500 
Limit for participation, zinc prices set by zero-cost collar strategy (in dollars per metric tonne)
 
 
 
2,500 
2,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in AOCI balances recorded in consolidated financial statements pertaining to the foreign exchange hedging activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AOCI, beginning of year
28,390,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss reclassified from AOCI into production cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,459,000 
 
 
 
 
 
 
 
 
 
Loss recognized in OCI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(5,863,000)
 
 
 
 
 
 
 
 
 
AOCI, end of year
(7,106,000)
28,390,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(4,404,000)
 
 
 
 
 
 
 
 
 
Gain on derivative financial instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums realized on written foreign exchange call option
 
 
 
 
 
 
 
 
 
 
 
4,995,000 
4,845,000 
4,494,000 
 
 
 
 
 
 
 
 
 
 
 
 
Realized gain on foreign exchange extendible flat forward
 
 
 
3,400,000 
3,700,000 
 
(3,400,000)
(3,100,000)
 
 
 
 
 
 
 
 
 
1,797,000 
(4,400,000)
 
 
 
(1,407,000)
 
 
 
Realized gain on foreign exchange collar
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
711,000 
 
 
Unrealized mark-to-market gain
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
142,000 
 
 
Gain (Loss) on derivative financial instruments
3,683,000 
7,612,000 
3,592,000 
3,419,000 
3,733,000 
(752,000)
(3,403,000)
(3,058,000)
79,000 
(558,000)
(150,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exposure to interest rate risk
 
 
 
 
 
 
 
 
 
 
 
$ 221,500,000 
$ 104,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed weighted average interest rate on short-term investments and cash equivalents (as a percent)
 
 
 
 
 
 
 
 
 
 
 
0.61% 
0.56% 
 
 
 
 
 
 
 
 
 
 
 
 
 
GENERAL AND ADMINISTRATIVE (Details) (USD $)
1 Months Ended 12 Months Ended
Mar. 31, 2011
Dec. 31, 2011
GENERAL AND ADMINISTRATIVE
 
 
Insurance receivable
 
$ 8,765,000 
Meadowbank Mine Fire
 
 
GENERAL AND ADMINISTRATIVE
 
 
Loss on disposal due to kitchen fire at Meadowbank Mine
6,900,000 
 
Costs related to disposal of property
7,400,000 
 
Insurance receivable
11,200,000 
8,800,000 
Loss due to fire recognized in the General and Administrative
3,100,000 
 
Maximum exposure to insurance losses
3,100,000 
 
Insurance proceeds received
 
$ 2,400,000 
LOSS ON GOLDEX MINE (Details) (Goldex mine, USD $)
In Thousands, unless otherwise specified
1 Months Ended
Oct. 31, 2011
ounce
Goldex mine
 
Loss on suspended operations
 
Proven and probable gold reserves (in ounces)
1,600,000 
Impairment loss on Goldex mine property, plant, and mine development
$ 237,110 
Loss on underground ore stockpile
16,641 
Supplies inventory obsolescence provision
1,915 
Increase in environmental remediation liability
47,227 
Loss on Goldex mine (before income and mining taxes)
$ 302,893 
IMPAIRMENT LOSS ON MEADOWBANK MINE (Details)
12 Months Ended
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2011
Meadowbank mine
USD ($)
USDperounce
Dec. 31, 2011
Meadowbank mine
CAD ($)
Property, Plant and Equipment [Line Items]
 
 
 
 
Impairment loss on Meadowbank mine (note 18)
$ 907,681,000 
 
 
 
Property, plant and mine development book value
3,895,355,000 
4,564,563,000 
1,700,000,000 
 
Old long-term gold prices (in dollars per ounce)
 
 
1,250 
1,250 
Long-term gold prices (in dollars per ounce)
 
 
1,553 
1,553 
Old foreign exchange rates (in dollars per share)
 
 
$ 0.92 
$ 1 
Exchange rate under foreign exchange forward contract (in CAD per US dollar)
 
 
$ 0.97 
$ 1 
Percentage of average gold recovery
 
 
92.90% 
92.90% 
Percentage of Interest rate used to calculated fair value by discounting the estimated future net cash flows (as a percent)
 
 
5.00% 
5.00% 
SEGMENTED INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
SEGMENTED INFORMATION
 
 
 
 
Minimum required percentage of combined revenue, profit or loss or total assets of reported operating segments
10.00% 
 
 
 
Segment reporting Information
 
 
 
 
Goodwill (note 10)
$ 229,279 
$ 200,064 
 
 
Revenues from Mining Operations
1,821,799 
1,422,521 
613,762 
 
Production Costs
876,078 
677,472 
306,318 
 
Amortization
261,781 
192,486 
72,461 
 
Exploration and Corporate Development
75,721 
54,958 
36,279 
 
Foreign currency translation loss (gain)
(1,082)
19,536 
39,831 
 
Loss on Goldex mine
302,893 
 
 
 
Impairment loss on Meadowbank mine (note 18)
907,681 
 
 
 
Segment Income (Loss)
(601,273)
478,069 
158,873 
 
Interest and sundry expense
(5,188)
10,254 
12,580 
 
Gain on sale and write-down of available-for-sale securities
4,907 
19,487 
10,142 
 
Gain on acquisition of Comaplex
 
57,526 
 
 
General and administrative expenses
(107,926)
(94,327)
(63,687)
 
Provincial capital tax
(9,223)
6,075 
(5,014)
 
Interest expense
(55,039)
(49,493)
(8,448)
(2,952)
Income (loss) before income and mining taxes
(778,628)
435,203 
108,038 
 
Capital Expenditures
737,364 
1,175,251 
656,759 
 
TOTAL ASSETS
5,034,262 
5,500,351 
 
 
Meliadine Mine Project
 
 
 
 
Segment reporting Information
 
 
 
 
Goodwill (note 10)
200,100 
 
 
 
La India Mine Project
 
 
 
 
Segment reporting Information
 
 
 
 
Goodwill (note 10)
29,200 
 
 
 
Canada
 
 
 
 
Segment reporting Information
 
 
 
 
Revenues from Mining Operations
1,217,858 
1,086,744 
538,123 
 
Production Costs
619,987 
499,621 
252,035 
 
Amortization
198,219 
140,024 
60,028 
 
Foreign currency translation loss (gain)
2,825 
22,815 
36,499 
 
Loss on Goldex mine
302,893 
 
 
 
Impairment loss on Meadowbank mine (note 18)
907,681 
 
 
 
Segment Income (Loss)
(813,747)
424,284 
189,561 
 
Capital Expenditures
319,728 
1,004,129 
435,098 
 
TOTAL ASSETS
3,205,158 
4,179,446 
 
 
Europe
 
 
 
 
Segment reporting Information
 
 
 
 
Revenues from Mining Operations
225,612 
160,140 
61,457 
 
Production Costs
110,477 
87,735 
42,464 
 
Amortization
26,574 
31,231 
10,909 
 
Foreign currency translation loss (gain)
1,063 
(2,780)
3,582 
 
Segment Income (Loss)
87,498 
43,954 
4,502 
 
Capital Expenditures
95,549 
67,894 
84,955 
 
TOTAL ASSETS
771,714 
679,258 
 
 
Latin America
 
 
 
 
Segment reporting Information
 
 
 
 
Revenues from Mining Operations
378,329 
175,637 
14,182 
 
Production Costs
145,614 
90,116 
11,819 
 
Amortization
36,988 
21,134 
1,524 
 
Foreign currency translation loss (gain)
(4,955)
(2,126)
(250)
 
Segment Income (Loss)
200,682 
66,513 
1,089 
 
Capital Expenditures
313,669 
103,131 
136,706 
 
TOTAL ASSETS
1,020,078 
619,263 
 
 
Exploration
 
 
 
 
Segment reporting Information
 
 
 
 
Amortization
 
97 
 
 
Exploration and Corporate Development
75,721 
54,958 
36,279 
 
Foreign currency translation loss (gain)
(15)
1,627 
 
 
Segment Income (Loss)
(75,706)
(56,682)
(36,279)
 
Capital Expenditures
8,418 
97 
 
 
TOTAL ASSETS
37,312 
22,384 
 
 
Corporate and Other Income (Loss)
 
 
 
 
Segment reporting Information
 
 
 
 
Interest and sundry expense
(5,188)
10,254 
12,580 
 
Gain on sale and write-down of available-for-sale securities
 
19,487 
10,142 
 
Loss on sale and write-down of available-for-sale securities
(3,662)
 
 
 
Gain (Loss) on derivative financial instruments
(3,683)
(7,612)
(3,592)
 
Gain on acquisition of Comaplex
 
57,526 
 
 
General and administrative expenses
(107,926)
(94,327)
(63,687)
 
Provincial capital tax
(9,223)
6,075 
(5,014)
 
Interest expense
(55,039)
(49,493)
(8,448)
 
Income (loss) before income and mining taxes
$ (778,628)
$ 435,203 
$ 108,038 
 
SUBSEQUENT EVENTS (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
1 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended
Feb. 28, 2012
Jul. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Jan. 31, 2012
Grayd
Nov. 30, 2011
Grayd
Nov. 18, 2011
Grayd
Jan. 31, 2012
Acquisition
Grayd
Jan. 23, 2012
Acquisition
Grayd
Subsequent event disclosures
 
 
 
 
 
 
 
 
 
 
Total purchase price to allocate (in dollars)
 
 
 
 
 
 
 
$ 222,100 
 
$ 11,800 
Maximum cash payable to total consideration (in dollars)
 
 
 
 
 
 
 
$ 165,954 
 
$ 9,300 
Shares issued for acquisition of mining property (in shares)
 
15,000 
 
 
 
68,941 
1,250,477 
 
68,941 
 
Cash dividends declared per common share (in dollars per share)
$ 0.2 
 
$ 0 
$ 0.64 
$ 0.18