1.     BASIS OF PRESENTATION

• The accompanying unaudited interim consolidated financial statements of Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") have been prepared in accordance with United States generally accepted accounting principles ("GAAP") in US dollars. They do not include all of the disclosures required by GAAP for annual financial statements. Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the fiscal 2009 annual consolidated financial statements, including the accounting policies and notes thereto, included in the Annual Report and Annual Information Form/Form 20-F for the year ended December 31, 2009. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, which consist only of normal and recurring adjustments necessary to present fairly the financial position as at March 31, 2010 and the results of operations and cash flows for the three months ended March 31, 2010 and 2009.

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

2.     USE OF ESTIMATES

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

3.     ACCOUNTING POLICIES

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

  Recently Adopted Accounting Pronouncements

  Variable Interest Entities

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

  Fair Value Accounting

  In January 2010, the FASB guidance for fair value measurements and disclosures was updated to require additional disclosures. The updated guidance was effective for the Company's fiscal year beginning January 1, 2010, with the exception of the level 3 disaggregation which is effective for the Company's fiscal year beginning January 2, 2011. Based on the Company's assessment, these changes do not have an impact on the Company's required disclosures.

4.     FAIR VALUE MEASUREMENT

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

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

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

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

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

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

(1)

Fair value approximates the carrying amounts due to the short-term nature.

(2)

Recorded at fair value using quoted market prices.

(3)

Recorded at fair value based on broker-dealer quotations.

(4)

Assets for the defined benefit pension plan consists of deposits on hand with regulatory authorities which are refundable when benefit payments are made on the ultimate wind-up of the plan.

(5)

Recorded at cost. This line item also includes accrued interest.

• Both the Company's cash equivalents and short-term investments are classified within Level 2 of the fair value hierarchy because they are held to maturity and are valued using interest rates observable at commonly quoted intervals. Cash equivalents are market securities with remaining maturities of three months or less at the date of purchase. The short-term investments are market securities with remaining maturities of over three months at the date of purchase.

  The Company's available-for-sale equity securities valued using quoted market prices in active markets are classified as Level 1 of the fair value hierarchy. The fair value of these securities are calculated as the quoted market price of the security multiplied by the quantity of shares held by the Company. The Company's available-for-sale securities classified as Level 2 of the fair value hierarchy consist of equity warrants. The fair value of these Level 2 securities are calculated based on the broker-dealer quotation multiplied by the quantity of equity warrants held by the Company.

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

5.     SHAREHOLDERS' EQUITY

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

  During the three months ended March 31, 2010, the Company transferred $4.0 million (2009 — $3.0 million) to an employee benefit trust (the "Trust") that then purchased shares of the Company in the open market. For accounting purposes, the Trust is treated as a variable interest entity and consolidated in the accounts of the Company. On consolidation, the dividends paid on the shares held by the Trust were eliminated. The shares purchased and held by the Trust are treated as not being outstanding for the basic earnings per share ("EPS") calculations. They are amortized back into basic EPS over the vesting period. All of the shares held by the Trust were included in the diluted EPS calculations.

  For the three months ended March 31, 2010 and 2009, the Company's warrants were dilutive and were included in the calculation of diluted net income per share.

  The following table presents the maximum number of common shares that would be outstanding if all instruments outstanding at March 31, 2010 were exercised:

• During the three months ended March 31, 2010, 2,755,080 (2009 — 2,251,000) options were granted with an exercise price of C$56.95 (2009 — C$62.77), 59,325 (2009 — 602,300) employee stock options were exercised for cash of $1.3 million (2009 — $15.0 million), and 10,550 (2009 — 70,000) options were cancelled with a weighted average exercise price of C$49.88 (2009 — C$56.50).

  The following table illustrates the changes in capital stock for the three months ended March 31, 2010:

6.     STOCK-BASED COMPENSATION

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

• For the three months ended March 31, 2010 and 2009, the Company estimated the fair value of options under the Black-Scholes option pricing model using the following weighted average assumptions:

7.     AVAILABLE-FOR-SALE SECURITIES

• During the three months ended March 31, 2010, the Company received proceeds of $0.5 million (2009 — $0.5 million) from the sale of certain available-for-sale securities and recognized a gain before taxes of $0.4 million (2009 — $0.2 million).

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

• The Company holds a position in Goldcorp Inc. warrants that were in an unrealized loss position of $3.3 million at March 31, 2010 (December 31, 2009 — $nil). The Company believes the impairment is not other than temporary as the duration of the unrealized loss was less than three months and that subsequent to the first quarter of 2010 the unrealized loss had fully reversed. The Goldcorp warrants have an exercise price of C$34.76 and expire in June 2011.

8.     LONG-TERM DEBT

• During the three months ended March 31, 2010, the Company drew down an additional $20.0 million from the credit facilities (2009 — $215.0 million) and incurred $7.0 million of interest costs (2009 — $1.1 million), of which $4.6 million was capitalized to property, plant and mine development (2009 — $1.1 million).

  At March 31, 2010, the credit facilities were drawn down by a total of $735.0 million (December 31, 2009 — $715.0 million).

9.     INCOME TAXES

• On December 12, 2008, the Company executed a Canadian federal tax election to start using the US dollar as its functional currency for federal Canadian income tax purposes. As the related tax legislation was enacted in the first quarter of 2009, this election applies to taxation years ended December 31, 2008 and subsequent. It was determined upon filing the 2008 income tax return that this election resulted in a deferred tax benefit of $21.0 million for the period ended March 31, 2009.

  The tax effect of other comprehensive income ("OCI") for the period is comprised of the following amounts:

10.   FINANCIAL INSTRUMENTS

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

  A total of 15,000 metric tonnes of zinc call options were written at a strike price of $2,500 per metric tonne with 1,500 metric tonnes expiring each month beginning March 31, 2010. A total of 15,000 metric tonnes of zinc put options were purchased at a strike price of $2,200 per metric tonne with 1,500 metric tonnes expiring each month beginning March 31, 2010. While setting a minimum price, the zero-cost collar strategy also limits participation to zinc prices above $2,500 per metric tonne. These contracts did not qualify for hedge accounting under ASC 815 — Derivatives and Hedging. Gains or losses, along with mark-to-market adjustments are recognized in the loss on derivative financial instruments component of the consolidated statements of income. The March options expired out of the money and as of March 31, 2010, a mark-to-market loss of $0.5 million was recognized. There were no metal derivative positions in the three months ended March 31, 2009.

  The fair values of the Company's current financial assets and liabilities approximate their carrying values as at March 31, 2010.

11.   COMMITMENTS, CONTINGENCIES, AND GUARANTEES

• As part of its ongoing business and operations, the Company has been required to provide assurance in the form of letters of credit for environmental and site restoration costs, custom credits, government grants and other general corporate purposes. As at March 31, 2010, the total amount of these guarantees was $120.5 million.

12.   SEGMENTED INFORMATION

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

• Specific Corporate Head Office income and expense items are noted separately below.

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

13.   SUBSEQUENT EVENTS

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

  Also subsequent to the first quarter of 2010, the Company and Comaplex Minerals Corp. ("Comaplex") jointly announced that they entered into a definitive agreement whereby the Company will acquire all of the shares of Comaplex that it does not already own. Under the terms of the transaction, each shareholder of Comaplex other than Agnico-Eagle, will receive 0.1576 of an Agnico-Eagle share per Comaplex share. Additionally, at closing, each Comaplex shareholder other than Agnico-Eagle and Perfora Investments S.a.r.l. ("Perfora") will receive one common share of a newly formed, wholly owned, subsidiary of Comaplex ("New Comaplex") in respect of each Comaplex share. The Company expects to issue approximately 10.2 million shares to the shareholders of Comaplex other than Agnico-Eagle.

  The transaction contemplates that Comaplex will transfer to New Comaplex all assets and related liabilities other than those relating to the Meliadine properties and related assets. These assets include all of Comaplex's net cash, the non-Meliadine mineral properties, all oil and gas properties, and investments. The shares of New Comaplex will be distributed to the shareholders of Comaplex, other than Agnico-Eagle and Perfora.

  The transaction is subject to approval by Comaplex shareholders and court and regulatory approvals, with an expected closing date in July 2010.

14.   COMPARATIVE FIGURES

• Certain items in the comparative interim consolidated financial statements have been reclassified from statements previously presented to conform to the presentation of the March 31, 2010 interim consolidated financial statements.