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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549

Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2012
Commission File Number

	
AGNICO-EAGLE MINES LIMITED

(Translation of registrant's name into English)	
145 King Street East, Suite 400, Toronto, Ontario M5C 2Y7

(Address of principal executive office)	
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

							
Form 20-F	 	ý	 	Form 40-F	 	o	
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(1):                               
Note:  Regulation S-T Rule 101 (b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(7):                               
Note:  Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

							
Yes	 	o	 	No	 	ý	
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b): 82-                               .

 EXHIBITS

			
Exhibit No. 	 	Exhibit Description	
99.1	 	Second Quarter Report	

 SIGNATURES
        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

					
	 	AGNICO-EAGLE MINES LIMITED 
(Registrant)	
Date: August 8, 2012	 	 	 	 	
	 	By:	 	/s/ R. GREGORY LAING

R. Gregory Laing
General Counsel, Sr. Vice President, Legal
and Corporate Secretary	
Exhibit Number 99.1 submitted with this Form 6-K is hereby incorporated into Agnico-Eagle Mines Limited's registration statements on Form F-10 and Form S-8 (SEC Reg. Nos. 333-156710, 333-130339 and 333-152004).
2

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 Second Quarter Report 2012

 AGNICO-EAGLE MINES LIMITED

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Prepared in accordance with United States GAAP)
for the three months ended June 30, 2012
        This management's discussion and analysis dated August 3, 2012 of Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") should be read in conjunction with our interim unaudited consolidated financial statements for the three months ended June 30, 2012, prepared in accordance with United States generally accepted accounting principles ("US GAAP"). Information pertaining to new accounting pronouncements can also be obtained within our interim unaudited consolidated financial statements. Additionally, this management's discussion and analysis should be read in conjunction with the management's discussion and analysis and consolidated financial statements included in our Annual Report on Form 20-F for the year ended December 31, 2011. Other information regarding critical accounting estimates and risk factors are also available in the Company's Annual Report on Form 20-F. These interim unaudited consolidated financial statements and management's discussion and analysis are presented in United States dollars ("US dollars", "$" or "US$") and all units of measurement are expressed in metric, unless otherwise specified. Certain information in this management's discussion and analysis is presented in Canadian dollars ("C$") or European Union euros ("EUR" or "€"). Additional information relating to the Company, including the Company's Annual Report on Form 20-F for the year ended December 31, 2011, is available on the Canadian Securities Administrators' SEDAR website at www.sedar.com.
Results of Operations
        Agnico-Eagle reported net income of $43.3 million, or $0.25 per share, in the second quarter of 2012 compared with net income of $68.8 million, or $0.41 per share, in the second quarter of 2011. In the second quarter of 2012, the operating margin increased 8.5% to $239.7 million from $220.9 million in the second quarter of 2011 due primarily to an increase in sales volumes and realized gold price. Gold production increased by 10.9% to 265,350 ounces from 239,328 ounces between the second quarter of 2011 and the second quarter of 2012. Cash provided by operating activities amounted to $194.1 million in the second quarter of 2012 compared with $162.8 million in the second quarter of 2011. During the second quarter of 2012, cash costs were $660 per ounce compared with $565 per ounce during the same period in the previous year.
        The table below summarizes variances in the key drivers of net income for the three months and six months ended June 30, 2012 compared with the three months and six months ended June 30, 2011:

								
(millions of United States dollars) 	 	Three Months Ended
June 30, 2012
vs. Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012
vs. Six Months Ended
June 30, 2011	 	
Increase in gold revenue	 	$	56.5	 	$	110.4	 	
Decrease in silver revenue	 	 	(17.8	)	 	(15.8	)	
Decrease in zinc revenue	 	 	(12.0	)	 	(8.9	)	
Increase (decrease) in copper and lead revenue	 	 	(0.8	)	 	1.0	 	
Decrease in production costs due to weaker Canadian dollar and Euro	 	 	8.7	 	 	12.0	 	
Increase in production costs	 	 	(15.9	)	 	(35.6	)	
Increase in amortization of property, plant and mine development	 	 	(7.1	)	 	(9.7	)	
Decrease in non cash foreign currency translation loss	 	 	13.7	 	 	12.3	 	
Decrease in income and mining taxes	 	 	2.0	 	 	5.2	 	
Increase in interest expense	 	 	(0.2	)	 	(0.7	)	
Increase in general and administrative expense	 	 	(7.9	)	 	(6.7	)	
Increase in exploration and corporate development expenses	 	 	(17.0	)	 	(23.1	)	
Impairment loss on available-for-sale securities	 	 	(11.6	)	 	(11.6	)	
Increase in loss on sale of available-for-sale securities	 	 	(7.2	)	 	(11.5	)	
Other	 	 	(9.0	)	 	(9.6	)	
 	 	 	 	 	 	
Total net income variance	 	$	(25.6	)	$	7.7	 	
 	 	 	 	 	 	
1

        In the second quarter of 2012, revenues from mining operations increased to $459.6 million from $433.7 million in the second quarter of 2011 due primarily to an increase in sales volumes and higher gold prices realized. The increase in sales volume was impacted by an increase in the level of production in the second quarter of 2012 largely due to record production at the Meadowbank mine, higher grades at the LaRonde mine and the ramp up of operations at the Creston Mascota deposit at Pinos Altos which achieved commercial production on March 1, 2011.
        In the second quarter of 2012, total cash costs per ounce of gold produced increased to $660 from $565 in the second quarter of 2011 and production costs increased to $219.9 million in the second quarter of 2012 from $212.8 million in the second quarter of 2011. The increase in cash costs per ounce of gold produced in the second quarter of 2012 was largely attributable to lower byproduct revenue, higher costs at the LaRonde mine as a result of transitioning into the deeper LaRonde mine extension and the absence of production from the relatively lower cost Goldex mine. These factors more than offset the positive impact of higher gold production on unit cash costs.
        Exploration and corporate development expenses amounted to $34.3 million in the second quarter of 2012 compared with $17.3 million in the second quarter of 2011. This increase is due primarily to expanded exploration programs in Canada and Mexico during the second quarter of 2012 relative to the second quarter of 2011.
        During the second quarter of 2012, there was a non-cash foreign currency translation gain of $11.0 million mainly attributable to a weakening of the Canadian dollar versus the US dollar at June 30, 2012 relative to March 31, 2012. A non-cash foreign currency translation loss of $2.7 million was recorded during the comparative second quarter of 2011.
        The Kittila mine was operating at full capacity as of June 18, 2012 following a planned maintenance shutdown of the Kittila mill. While the processing facility shutdown was expected to last up to 40 days in the second quarter of 2012, operations resumed after only 18 days due to better than expected conditions inside the autoclave. The balance of the total scheduled mill maintenance downtime has been postponed to the second half of 2012 when two 10-day maintenance shutdowns are scheduled.
        An $11.6 million impairment loss on certain available-for-sale securities was recorded as at June 30, 2012 based on an evaluation of the severity and duration of their individual unrealized loss positions.
        On June 1, 2012, the Company disposed of 11,000,000 shares of Rubicon Minerals Corporation for total proceeds of $30.7 million, recording a $6.7 million loss on sale of available-for-sale securities. After closing the transaction, the Company's interest in Rubicon Minerals Corporation is 10,671,827 shares.
        On October 19, 2011, the Company suspended mining operations and gold production at the Goldex mine due to geotechnical concerns with the rock above the mining horizon of the Goldex Extension Zone ("GEZ"). As of September 30, 2011, Agnico-Eagle wrote down its investment in the Goldex mine (net of expected residual value) and its underground ore stockpile. All of the remaining 1.6 million ounces of proven and probable reserves at the Goldex mine, other than ore stockpiled on surface, were reclassified as mineral resources. An environmental remediation liability has been recorded to reflect anticipated costs of remediation. The Goldex mill completed processing feed from the remaining surface stockpile in October of 2011. During the three months ended June 30, 2012, the Company incurred $6.1 million in remediation costs that were applied against the environmental remediation liability recognized in 2011.
        In 2012, exploration drilling continued on several mineralized zones on the property near the GEZ. A team of independent consultants and Agnico-Eagle staff performed a thorough review, including a preliminary economic assessment based only on the indicated resources, to determine whether future mining operations on the property, including the M and E zones, would be viable. After a review of the assessment, the Board of Directors has approved the M and E zones for development and first gold production is expected in early 2014. All necessary operating permits have been received. The mining operations will include the use of existing Goldex mine infrastructure such as the shaft and mill. The operations in the GEZ remain suspended indefinitely.
2

        During the first quarter of 2011, the kitchen facilities at the employee camp at the Meadowbank mine sustained extensive damage as a result of a fire. The fire was contained to the kitchen and there were no injuries sustained and operations were normalized prior to the end of the second quarter of 2011. The Company continues the process of recovering property damage and business interruption losses and received $0.4 million of insurance proceeds during the second quarter of 2012 and had a remaining insurance receivable of $6.5 million as at June 30, 2012.
Total Production Costs by Mine

														
(thousands of dollars) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
LaRonde mine	 	$	55,483	 	$	54,457	 	$	113,663	 	$	102,342	 	
Goldex mine	 	 	—	 	 	16,357	 	 	—	 	 	34,231	 	
Lapa mine	 	 	18,450	 	 	17,333	 	 	37,107	 	 	34,084	 	
Kittila mine	 	 	23,515	 	 	25,961	 	 	49,545	 	 	54,461	 	
Pinos Altos mine	 	 	40,819	 	 	38,085	 	 	75,980	 	 	68,992	 	
Meadowbank mine	 	 	81,639	 	 	60,561	 	 	158,646	 	 	117,211	 	
 	 	 	 	 	 	 	 	 	 	
Total production costs per consolidated statements of income	 	$	219,906	 	$	212,754	 	$	434,941	 	$	411,321	 	
 	 	 	 	 	 	 	 	 	 	
        The following tables provide a reconciliation of the total cash costs per ounce of gold produced and mine site costs per tonne to the interim consolidated financial statements for the LaRonde, Goldex, Lapa, Kittila, Pinos Altos (includes Creston Mascota deposit at Pinos Altos) and Meadowbank mines:
LaRonde Mine

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	55,483	 	$	54,457	 	$	113,663	 	$	102,342	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Byproduct revenues net of refining and transport fees	 	 	(23,334	)	 	(45,516	)	 	(70,852	)	 	(98,495	)	
Inventory and other adjustments (i)	 	 	(42	)	 	(1,899	)	 	(757	)	 	3,453	 	
Non-cash reclamation provision	 	 	(599	)	 	(684	)	 	(1,203	)	 	(1,384	)	
 	 	 	 	 	 	 	 	 	 	
Cash operating costs	 	$	31,508	 	$	6,358	 	$	40,851	 	$	5,916	 	
 	 	 	 	 	 	 	 	 	 	
Gold production (ounces)	 	 	40,206	 	 	27,525	 	 	83,487	 	 	64,418	 	
 	 	 	 	 	 	 	 	 	 	
Total cash costs (per ounce) (ii)	 	$	784	 	$	231	 	$	489	 	$	92	 	
 	 	 	 	 	 	 	 	 	 	
3

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	55,483	 	$	54,457	 	$	113,663	 	$	102,342	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory and other adjustments (iii)	 	 	113	 	 	(2,055	)	 	(12	)	 	2,462	 	
Non-cash reclamation provision	 	 	(599	)	 	(684	)	 	(1,203	)	 	(1,384	)	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs	 	$	54,997	 	$	51,718	 	$	112,448	 	$	103,420	 	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs (C$)	 	$	55,524	 	$	50,259	 	$	113,254	 	$	100,616	 	
 	 	 	 	 	 	 	 	 	 	
Tonnes of ore milled (thousands of tonnes)	 	 	573	 	 	599	 	 	1,218	 	 	1,184	 	
 	 	 	 	 	 	 	 	 	 	
Minesite costs per tonne (C$) (iv)	 	$	97	 	$	84	 	$	93	 	$	85	 	
 	 	 	 	 	 	 	 	 	 	
Goldex Mine

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	—	 	$	16,357	 	$	—	 	$	34,231	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Byproduct revenues net of refining and transport fees	 	 	—	 	 	107	 	 	—	 	 	194	 	
Inventory and other adjustments (i)	 	 	—	 	 	(224	)	 	—	 	 	(1,533	)	
Non-cash reclamation provision	 	 	—	 	 	(58	)	 	—	 	 	(113	)	
 	 	 	 	 	 	 	 	 	 	
Cash operating costs	 	$	—	 	$	16,182	 	$	—	 	$	32,779	 	
 	 	 	 	 	 	 	 	 	 	
Gold production (ounces)	 	 	—	 	 	41,998	 	 	—	 	 	80,498	 	
 	 	 	 	 	 	 	 	 	 	
Total cash costs (per ounce) (ii)	 	$	—	 	$	385	 	$	—	 	$	407	 	

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	—	 	$	16,357	 	$	—	 	$	34,231	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory and other adjustments (iii)	 	 	—	 	 	(20	)	 	—	 	 	(1,181	)	
Non-cash reclamation provision	 	 	—	 	 	(58	)	 	—	 	 	(113	)	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs	 	$	—	 	$	16,279	 	$	—	 	$	32,937	 	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs (C$)	 	$	—	 	$	15,658	 	$	—	 	$	31,985	 	
 	 	 	 	 	 	 	 	 	 	
Tonnes of ore milled (thousands of tonnes)	 	 	—	 	 	769	 	 	—	 	 	1,484	 	
 	 	 	 	 	 	 	 	 	 	
Minesite costs per tonne (C$) (iv)	 	$	—	 	$	20	 	$	—	 	$	22	 	
 	 	 	 	 	 	 	 	 	 	
4

Lapa Mine

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	18,450	 	$	17,333	 	$	37,107	 	$	34,084	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Byproduct revenues net of refining and transport fees	 	 	115	 	 	157	 	 	176	 	 	223	 	
Inventory and other adjustments (i)	 	 	(685	)	 	(366	)	 	(702	)	 	(208	)	
Non-cash reclamation provision	 	 	(15	)	 	(15	)	 	221	 	 	(30	)	
 	 	 	 	 	 	 	 	 	 	
Cash operating costs	 	$	17,865	 	$	17,109	 	$	36,802	 	$	34,069	 	
 	 	 	 	 	 	 	 	 	 	
Gold production (ounces)	 	 	28,157	 	 	28,552	 	 	56,656	 	 	55,466	 	
 	 	 	 	 	 	 	 	 	 	
Total cash costs (per ounce) (ii)	 	$	634	 	$	599	 	$	650	 	$	614	 	

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	18,450	 	$	17,333	 	$	37,107	 	$	34,084	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory and other adjustments (iii)	 	 	(635	)	 	(274	)	 	(615	)	 	32	 	
Non-cash reclamation provision	 	 	(15	)	 	(15	)	 	221	 	 	(30	)	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs	 	$	17,800	 	$	17,044	 	$	36,713	 	$	34,086	 	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs (C$)	 	$	17,968	 	$	16,289	 	$	36,872	 	$	32,929	 	
 	 	 	 	 	 	 	 	 	 	
Tonnes of ore milled (thousands of tonnes)	 	 	159	 	 	160	 	 	317	 	 	302	 	
 	 	 	 	 	 	 	 	 	 	
Minesite costs per tonne (C$) (iv)	 	$	113	 	$	102	 	$	116	 	$	109	 	
 	 	 	 	 	 	 	 	 	 	
Kittila Mine

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	23,515	 	$	25,961	 	$	49,545	 	$	54,461	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Byproduct revenues net of refining and transport fees	 	 	134	 	 	15	 	 	253	 	 	92	 	
Inventory and other adjustments (i)	 	 	446	 	 	2,920	 	 	886	 	 	2,077	 	
Non-cash reclamation provision	 	 	(99	)	 	(55	)	 	(256	)	 	(105	)	
Stripping costs (v)	 	 	—	 	 	(2,643	)	 	—	 	 	(2,643	)	
 	 	 	 	 	 	 	 	 	 	
Cash operating costs	 	$	23,996	 	$	26,198	 	$	50,428	 	$	53,882	 	
 	 	 	 	 	 	 	 	 	 	
Gold production (ounces)	 	 	35,228	 	 	30,811	 	 	81,986	 	 	71,128	 	
 	 	 	 	 	 	 	 	 	 	
Total cash costs (per ounce) (ii)	 	$	681	 	$	850	 	$	615	 	$	758	 	
 	 	 	 	 	 	 	 	 	 	
5

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	23,515	 	$	25,961	 	$	49,545	 	$	54,461	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory and other adjustments (iii)	 	 	451	 	 	2,920	 	 	891	 	 	2,077	 	
Non-cash reclamation provision	 	 	(99	)	 	(55	)	 	(256	)	 	(105	)	
Stripping costs (v)	 	 	—	 	 	(2,643	)	 	—	 	 	(2,643	)	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs	 	$	23,867	 	$	26,183	 	$	50,180	 	$	53,790	 	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs (EUR)	 	€	18,729	 	€	18,395	 	€	38,187	 	€	38,105	 	
 	 	 	 	 	 	 	 	 	 	
Tonnes of ore milled (thousands of tonnes)	 	 	251	 	 	233	 	 	540	 	 	495	 	
 	 	 	 	 	 	 	 	 	 	
Minesite costs per tonne (EUR) (iv)	 	€	75	 	€	79	 	€	71	 	€	77	 	
 	 	 	 	 	 	 	 	 	 	
Pinos Altos Mine (Includes Creston Mascota Deposit at Pinos Altos)

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	40,819	 	$	38,085	 	$	75,980	 	$	68,992	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Byproduct revenues net of refining and transport fees	 	 	(13,750	)	 	(15,986	)	 	(30,199	)	 	(30,989	)	
Inventory and other adjustments (i)	 	 	(1,149	)	 	292	 	 	605	 	 	5,989	 	
Non-cash reclamation provision	 	 	(195	)	 	(348	)	 	(628	)	 	(630	)	
Stripping costs (v)	 	 	(3,017	)	 	(6,765	)	 	(7,197	)	 	(13,090	)	
 	 	 	 	 	 	 	 	 	 	
Cash operating costs	 	$	22,708	 	$	15,278	 	$	38,561	 	$	30,272	 	
 	 	 	 	 	 	 	 	 	 	
Gold production (ounces)	 	 	63,356	 	 	51,066	 	 	120,372	 	 	99,067	 	
 	 	 	 	 	 	 	 	 	 	
Total cash costs (per ounce) (ii)	 	$	358	 	$	299	 	$	320	 	$	306	 	

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	40,819	 	$	38,085	 	$	75,980	 	$	68,992	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory and other adjustments (iii)	 	 	(1,108	)	 	(181	)	 	646	 	 	4,883	 	
Non-cash reclamation provision	 	 	(195	)	 	(348	)	 	(628	)	 	(630	)	
Stripping costs (v)	 	 	(3,017	)	 	(6,765	)	 	(7,197	)	 	(13,090	)	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs	 	$	36,499	 	$	30,791	 	$	68,801	 	$	60,155	 	
 	 	 	 	 	 	 	 	 	 	
Tonnes of ore milled (thousands of tonnes)	 	 	1,211	 	 	1,114	 	 	2,445	 	 	2,147	 	
 	 	 	 	 	 	 	 	 	 	
Minesite costs per tonne (iv)	 	$	30	 	$	28	 	$	28	 	$	28	 	
 	 	 	 	 	 	 	 	 	 	
6

Meadowbank Mine

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	81,639	 	$	60,561	 	$	158,646	 	$	117,211	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Byproduct revenues net of refining and transport fees	 	 	(484	)	 	(395	)	 	(1,118	)	 	(844	)	
Inventory and other adjustments (i)	 	 	(186	)	 	260	 	 	5,068	 	 	2,686	 	
Non-cash reclamation provision	 	 	(395	)	 	(427	)	 	(789	)	 	(839	)	
Stripping costs (v)	 	 	(1,441	)	 	(5,950	)	 	(1,663	)	 	(5,950	)	
 	 	 	 	 	 	 	 	 	 	
Cash operating costs	 	$	79,133	 	$	54,049	 	$	160,144	 	$	112,264	 	
 	 	 	 	 	 	 	 	 	 	
Gold production (ounces)	 	 	98,403	 	 	59,376	 	 	177,804	 	 	121,113	 	
 	 	 	 	 	 	 	 	 	 	
Total cash costs (per ounce) (ii)	 	$	804	 	$	910	 	$	901	 	$	927	 	

														
(thousands of dollars, except where noted) 	 	Three Months Ended
June 30, 2012	 	Three Months Ended
June 30, 2011	 	Six Months Ended
June 30, 2012	 	Six Months Ended
June 30, 2011	 	
Production costs per consolidated statements of income	 	$	81,639	 	$	60,561	 	$	158,646	 	$	117,211	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory and other adjustments (iii)	 	 	51	 	 	1,193	 	 	5,480	 	 	3,965	 	
Non-cash reclamation provision	 	 	(395	)	 	(427	)	 	(789	)	 	(839	)	
Stripping costs (v)	 	 	(1,441	)	 	(5,950	)	 	(1,663	)	 	(5,950	)	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs	 	$	79,854	 	$	55,377	 	$	161,674	 	$	114,387	 	
 	 	 	 	 	 	 	 	 	 	
Minesite operating costs (C$)	 	$	80,678	 	$	53,939	 	$	162,408	 	$	112,181	 	
 	 	 	 	 	 	 	 	 	 	
Tonnes of ore milled (thousands of tonnes)	 	 	901	 	 	667	 	 	1,788	 	 	1,296	 	
 	 	 	 	 	 	 	 	 	 	
Minesite costs per tonne (C$) (iv)	 	$	90	 	$	81	 	$	91	 	$	87	 	

(i)
Under the Company's revenue recognition policy, revenue is recognized on concentrates when legal title passes. Since total cash costs per ounce are calculated on a production basis, this inventory adjustment reflects the sales margin on the portion of concentrate production for which revenue has not been recognized in the period.

(ii)
Total cash costs per ounce is not a recognized measure under US GAAP and this data may not be comparable to data presented by other gold producers. The Company believes that this generally accepted industry measure is a realistic indication of operating performance and is useful in allowing year over year comparisons. As illustrated in the tables above, this measure is calculated by adjusting production costs as shown in the consolidated statements of income and comprehensive income for net byproduct metals revenues, inventory and hedging adjustments, asset retirement provisions and stripping costs. This measure is intended to provide investors with information about the cash generating capabilities of the Company's mining operations. Management uses this measure to monitor the performance of the Company's mining operations. As market prices for gold are quoted on a per ounce basis, using this per ounce measure allows management to assess a mine's cash generating capabilities at various gold prices. Management is aware that this per ounce measure of performance can be impacted by fluctuations in byproduct metal prices and exchange rates. Management compensates for the limitation inherent with this measure by using it in conjunction with the minesite costs per tonne measure (discussed below) as well as other data prepared in accordance with US GAAP. Management also performs sensitivity analyses in order to quantify the effects of fluctuating metal prices and exchange rates.

(iii)
This inventory adjustment reflects production costs associated with unsold concentrates.

(iv)
Minesite costs per tonne is not a recognized measure under US GAAP and this data may not be comparable to data presented by other gold producers. As illustrated in the tables above, this measure is calculated by adjusting production costs as shown in the consolidated statements of income and comprehensive income for inventory adjustments, asset retirement provisions and stripping costs, and then dividing by tonnes processed through the mill. As total cash costs per ounce data can be affected by fluctuations in byproduct metal prices and exchange rates, management believes minesite costs per tonne provides additional information regarding the performance of mining operations and allows management to monitor operating costs on a more consistent basis as the per tonne measure
7

eliminates the cost variability associated with varying production levels. Management also uses this measure to determine the economic viability of mining blocks. As each mining block is evaluated based on the net realizable value of each tonne mined, in order to be economically viable the estimated revenue on a per tonne basis must be in excess of the minesite costs per tonne. Management is aware that this per tonne measure is impacted by fluctuations in production levels and thus uses this evaluation tool in conjunction with production costs prepared in accordance with US GAAP. This measure supplements production cost information prepared in accordance with US GAAP and allows investors to distinguish between changes in production costs resulting from changes in production versus changes in operating performance.
(v)
The Company reports total cash costs per ounce and minesite costs per tonne using a common industry practice of deferring certain stripping costs that can be attributed to future production. The purpose of adjusting for these stripping costs is to enhance the comparability of total cash costs per ounce and minesite costs per tonne to the majority of the Company's peers within the mining industry.
Liquidity and Capital Resources
        At June 30, 2012, Agnico-Eagle's cash and cash equivalents, short-term investments and restricted cash totaled $289.1 million, while working capital amounted to $491.0 million. At December 31, 2011, the Company had $221.5 million in cash and cash equivalents, short-term investments and restricted cash and $567.1 million in working capital. The Company's policy is to invest excess cash in highly liquid investments of the highest credit quality to eliminate any risks associated with these investments. Such investments with remaining maturities at time of purchase greater than three months are classified as short-term investments and decisions regarding the length of maturities are based on cash flow requirements, rates of return and various other factors.
        Cash provided by operating activities was $194.1 million in the second quarter of 2012 compared with $162.8 million in the second quarter of 2011. In the second quarter of 2012, revenues from mining operations increased to $459.6 million from $433.7 million in the second quarter of 2011 due primarily to increased sales volumes and higher gold prices realized.
        For the three months ended June 30, 2012, capital expenditures amounted to $104.4 million compared with $114.4 million in the three months ended June 30, 2011. The significant capital expenditures during the second quarter of 2012 pertained to sustaining capital for the Company's operating mines, Goose Pit development expenditures and dyke construction at the Meadowbank mine, and Meliadine project development.
        On July 24, 2012, the Company closed a private placement consisting of $200.0 million of guaranteed senior unsecured notes due in 2022 and 2024 (the "2012 Notes") with a weighted average maturity of 11.0 years and weighted average yield of 4.95%. The 2012 Notes contain covenants that restrict, among other things, the ability of the Company to amalgamate or otherwise transfer its assets, sell material assets and carry on a business other than one related to the mining business and the ability of material and certain other subsidiaries of the Company to incur indebtedness. The 2012 Notes also require the Company to maintain the same financial ratios and same minimum tangible net worth as under the Credit Facility and 2010 Notes. The 2012 Notes are permissible debt under the Credit Facility.
        On July 20, 2012, the Company amended and restated its Credit Facility. The total amount available under the Credit Facility remains unchanged at $1.2 billion; however, the maturity date was extended from June 22, 2016 to June 22, 2017. Pricing terms were amended to reflect improved current market conditions.
        On June 26, 2012, the Company entered into a credit agreement with a financial institution relating to a new C$150 million uncommitted letter of credit facility (the "LC Facility"). The obligations of the Company under the LC Facility are guaranteed by certain subsidiaries of Agnico-Eagle. The LC Facility may be used to support the reclamation obligations, non-financial or performance obligations of the Company or its subsidiaries. As at June 30, 2012, no letters of credit were drawn against the LC Facility.
        On August 4, 2011, the Company amended and restated its $1.2 billion credit facility (the "Credit Facility") to extend the scheduled maturity date from June 22, 2014 to June 22, 2016. Terms related to standby fees and drawn amounts were amended to reflect current market conditions. At June 30, 2012, the outstanding balance on the Credit Facility amounted to $230.0 million. As a result, Credit Facility availability amounted to $970.0 million at June 30, 2012.
8

        On April 7, 2010, the Company closed a private placement consisting of $600.0 million of guaranteed senior unsecured notes due in 2017, 2020 and 2022 (the "2010 Notes") with a weighted average maturity of 9.84 years and weighted average yield of 6.59%.
        The Company was in compliance with covenants contained within both the Credit Facility and the 2010 Notes as at June 30, 2012.
        Volatility remains high in global financial markets and weakness in the global economy continues to have a serious impact on the profitability and liquidity of many businesses. Although there are signs of stabilization, the timing of a return to historical market conditions is uncertain. Virtually all industries, including gold mining, have been affected by weak economic conditions and volatile financial markets. The costs of funding for many businesses, particularly for financial institutions with which we do business, remain high compared to historical levels. Continuation of volatility in world markets could have a significant impact on our business. In particular, the global credit/liquidity crisis could continue to affect the cost and availability of financing and our overall liquidity. The volatility in gold, silver, zinc and copper prices directly affects our revenues, earnings and cash flow. Volatile energy prices, commodity and consumables prices and currency exchange rates impact our production costs. The volatility of global stock markets impacts the valuation of our equity investments. The current economic turmoil in Europe is compounding global volatility issues.
Disclosure Controls and Procedures and Internal Controls Over Financial Reporting
        Pursuant to regulations adopted by the US Securities and Exchange Commission, under the Sarbanes-Oxley Act of 2002 and those of the Canadian Securities Administrators, the Company's management evaluates the effectiveness of the design and operation of the Company's disclosure controls and procedures, and internal controls over financial reporting. This evaluation is done under the supervision of, and with the participation of, the President and Chief Executive Officer ("CEO").
        As of the end of the period covered by this quarterly management's discussion and analysis and accompanying unaudited interim consolidated financial statements, the Company's management evaluated the effectiveness of its disclosure controls. Based on that evaluation, the CEO has concluded that the Company's disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by the Company in reports it files was recorded, processed, summarized and reported, within the appropriate time periods.
        Management of the Company, with the participation of the CEO, are responsible for establishing and maintaining adequate internal controls over financial reporting. The Company's internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. There have been no significant changes in the Company's internal control over financial reporting in the first quarter of 2012 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
        The Company's management including the CEO believe that any disclosure controls and procedures and internal controls over financial reporting, no matter how well designed, can have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance that the objectives of the control system are met.
9

AGNICO-EAGLE MINES LIMITED

SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS

(thousands of United States dollars, except where noted)

														
 	 	Three Months Ended
June 30,	 	Six Months Ended
June 30,	 	
 	 	2012	 	2011	 	2012	 	2011	 	
Income Contribution Analysis	 	 	 	 	 	 	 	 	 	 	 	 	 	
LaRonde mine	 	$	29,342	 	$	46,017	 	$	92,608	 	$	95,000	 	
Goldex mine	 	 	—	 	 	46,739	 	 	—	 	 	87,072	 	
Lapa mine	 	 	26,222	 	 	27,737	 	 	53,899	 	 	46,915	 	
Kittila mine	 	 	31,489	 	 	18,934	 	 	80,538	 	 	46,765	 	
Pinos Altos mine (i)	 	 	79,887	 	 	52,568	 	 	149,022	 	 	99,827	 	
Meadowbank mine	 	 	72,715	 	 	28,942	 	 	121,487	 	 	58,859	 	
 	 	 	 	 	 	 	 	 	 	
Operating margin	 	 	239,655	 	 	220,937	 	 	497,554	 	 	434,438	 	
Amortization of property, plant and mine development	 	 	66,310	 	 	59,235	 	 	130,863	 	 	121,164	 	
Corporate expenses	 	 	96,169	 	 	56,936	 	 	182,005	 	 	131,146	 	
 	 	 	 	 	 	 	 	 	 	
Income before income and mining taxes	 	 	77,176	 	 	104,766	 	 	184,686	 	 	182,128	 	
Income and mining taxes	 	 	33,904	 	 	35,941	 	 	62,866	 	 	68,039	 	
 	 	 	 	 	 	 	 	 	 	
Net income for the period	 	$	43,272	 	$	68,825	 	$	121,820	 	$	114,089	 	
 	 	 	 	 	 	 	 	 	 	
Net income per share — basic	 	$	0.25	 	$	0.41	 	$	0.71	 	$	0.68	 	
Net income per share — diluted	 	$	0.25	 	$	0.40	 	$	0.71	 	$	0.66	 	
Cash flows	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash provided by operating activities	 	$	194,082	 	$	162,821	 	$	390,579	 	$	337,587	 	
Cash used in investing activities	 	$	(68,619	)	$	(116,173	)	$	(157,527	)	$	(206,130	)	
Cash used in financing activities	 	$	(29,258	)	$	(22,180	)	$	(161,336	)	$	(94,745	)	
Realized prices	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gold (per ounce)	 	$	1,602	 	$	1,530	 	$	1,642	 	$	1,466	 	
Silver (per ounce)	 	$	26.33	 	$	38.50	 	$	30.75	 	$	37.31	 	
Zinc (per tonne)	 	$	1,901	 	$	2,257	 	$	2,026	 	$	2,340	 	
Copper (per tonne)	 	$	6,455	 	$	8,565	 	$	7,842	 	$	9,377	 	
Payable production (ii)	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gold (ounces)	 	 	 	 	 	 	 	 	 	 	 	 	 	
LaRonde mine	 	 	40,206	 	 	27,525	 	 	83,487	 	 	64,418	 	
Goldex mine	 	 	—	 	 	41,998	 	 	—	 	 	80,498	 	
Lapa mine	 	 	28,157	 	 	28,552	 	 	56,656	 	 	55,466	 	
Kittila mine	 	 	35,228	 	 	30,811	 	 	81,986	 	 	71,128	 	
Pinos Altos mine (i)	 	 	63,356	 	 	51,066	 	 	120,372	 	 	99,067	 	
Meadowbank mine	 	 	98,403	 	 	59,376	 	 	177,804	 	 	121,113	 	
 	 	 	 	 	 	 	 	 	 	
	 	 	265,350	 	 	239,328	 	 	520,305	 	 	491,690	 	
 	 	 	 	 	 	 	 	 	 	
Silver (ounces in thousands)	 	 	 	 	 	 	 	 	 	 	 	 	 	
LaRonde mine	 	 	532	 	 	736	 	 	1,222	 	 	1,416	 	
Pinos Altos mine (i)	 	 	537	 	 	452	 	 	1,044	 	 	858	 	
Meadowbank mine	 	 	26	 	 	13	 	 	44	 	 	26	 	
 	 	 	 	 	 	 	 	 	 	
	 	 	1,095	 	 	1,201	 	 	2,310	 	 	2,300	 	
 	 	 	 	 	 	 	 	 	 	
Zinc (LaRonde mine) (tonnes)	 	 	9,558	 	 	14,678	 	 	22,536	 	 	26,619	 	
Copper (LaRonde mine) (tonnes)	 	 	1,004	 	 	666	 	 	2,330	 	 	1,483	 	
10

AGNICO-EAGLE MINES LIMITED
SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS
(thousands of United States dollars, except where noted)

														
 	 	Three Months Ended
June 30,	 	Six Months Ended
June 30,	 	
 	 	2012	 	2011	 	2012	 	2011	 	
Payable metal sold	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gold (ounces)	 	 	 	 	 	 	 	 	 	 	 	 	 	
LaRonde mine	 	 	39,886	 	 	28,589	 	 	83,631	 	 	66,048	 	
Goldex mine	 	 	—	 	 	41,564	 	 	—	 	 	83,459	 	
Lapa mine	 	 	27,793	 	 	29,749	 	 	55,690	 	 	55,525	 	
Kittila mine	 	 	34,476	 	 	29,794	 	 	78,703	 	 	70,492	 	
Pinos Altos mine (i)	 	 	66,373	 	 	48,847	 	 	118,518	 	 	94,331	 	
Meadowbank mine	 	 	93,299	 	 	58,767	 	 	167,913	 	 	120,695	 	
 	 	 	 	 	 	 	 	 	 	
	 	 	261,827	 	 	237,310	 	 	504,455	 	 	490,550	 	
 	 	 	 	 	 	 	 	 	 	
Silver (ounces in thousands)	 	 	 	 	 	 	 	 	 	 	 	 	 	
LaRonde mine	 	 	482	 	 	726	 	 	1,200	 	 	1,405	 	
Pinos Altos mine (i)	 	 	525	 	 	428	 	 	1,018	 	 	837	 	
Meadowbank mine	 	 	24	 	 	14	 	 	42	 	 	35	 	
 	 	 	 	 	 	 	 	 	 	
	 	 	1,031	 	 	1,168	 	 	2,260	 	 	2,277	 	
 	 	 	 	 	 	 	 	 	 	
Zinc (LaRonde mine) (tonnes)	 	 	10,379	 	 	16,649	 	 	23,411	 	 	24,951	 	
Copper (LaRonde mine) (tonnes)	 	 	1,085	 	 	658	 	 	2,378	 	 	1,478	 	
Total cash costs (per ounce) (iii)	 	 	 	 	 	 	 	 	 	 	 	 	 	
LaRonde mine	 	$	784	 	$	231	 	$	489	 	$	92	 	
Goldex mine	 	 	—	 	 	385	 	 	—	 	 	407	 	
Lapa mine	 	 	634	 	 	599	 	 	650	 	 	614	 	
Kittila mine	 	 	681	 	 	850	 	 	615	 	 	758	 	
Pinos Altos mine (i)	 	 	358	 	 	299	 	 	320	 	 	306	 	
Meadowbank mine	 	 	804	 	 	910	 	 	901	 	 	927	 	
 	 	 	 	 	 	 	 	 	 	
Weighted average	 	$	660	 	$	565	 	$	628	 	$	548	 	

(i)
Includes Creston Mascota deposit at Pinos Altos.

(ii)
Payable production means the quantity of mineral produced during a period contained in products that are or will be sold by the Company, whether such products are sold during the period or held as inventory at the end of the period.

(iii)
Total cash costs per ounce is a non-US GAAP measure of performance that the Company uses to monitor the performance of its operations.
11

AGNICO-EAGLE MINES LIMITED

SUMMARIZED QUARTERLY DATA

(thousands of United States dollars, except where noted)

																										
 	 	Three Months Ended	 	
 	 	September 30,
2010	 	December 31,
2010	 	March 31,
2011	 	June 30,
2011	 	September 30,
2011	 	December 31,
2011	 	March 31,
2012	 	June 30,
2012	 	
Operating margin	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues from mining operations	 	$	398,478	 	$	439,004	 	$	412,068	 	$	433,691	 	$	520,537	 	$	455,503	 	$	472,934	 	$	459,561	 	
Production costs	 	 	196,674	 	 	195,998	 	 	198,567	 	 	212,754	 	 	237,190	 	 	227,567	 	 	215,035	 	 	219,906	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating margin	 	 	201,804	 	 	243,006	 	 	213,501	 	 	220,937	 	 	283,347	 	 	227,936	 	 	257,899	 	 	239,655	 	
Income contribution analysis	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
LaRonde mine	 	 	48,722	 	 	65,516	 	 	48,983	 	 	46,017	 	 	59,081	 	 	34,581	 	 	63,266	 	 	29,342	 	
Goldex mine	 	 	44,349	 	 	50,122	 	 	40,333	 	 	46,739	 	 	48,974	 	 	24,677	 	 	—	 	 	—	 	
Lapa mine	 	 	17,764	 	 	25,477	 	 	19,178	 	 	27,737	 	 	28,286	 	 	23,736	 	 	27,677	 	 	26,222	 	
Kittila mine	 	 	26,838	 	 	17,467	 	 	27,831	 	 	18,934	 	 	34,751	 	 	33,619	 	 	49,049	 	 	31,489	 	
Pinos Altos mine (i)	 	 	15,089	 	 	34,998	 	 	47,259	 	 	52,568	 	 	65,777	 	 	67,111	 	 	69,135	 	 	79,887	 	
Meadowbank mine	 	 	49,042	 	 	49,426	 	 	29,917	 	 	28,942	 	 	46,478	 	 	44,212	 	 	48,772	 	 	72,715	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating margin	 	 	201,804	 	 	243,006	 	 	213,501	 	 	220,937	 	 	283,347	 	 	227,936	 	 	257,899	 	 	239,655	 	
Amortization of property, plant and mine development	 	 	48,145	 	 	69,835	 	 	61,929	 	 	59,235	 	 	67,104	 	 	73,513	 	 	64,553	 	 	66,310	 	
Impairment Loss on Meadowbank mine	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	907,681	 	 	—	 	 	—	 	
Loss on Goldex mine	 	 	—	 	 	—	 	 	—	 	 	—	 	 	298,183	 	 	4,710	 	 	—	 	 	—	 	
Corporate expenses (gains)	 	 	(9,818	)	 	51,268	 	 	74,210	 	 	56,936	 	 	28,644	 	 	92,204	 	 	85,836	 	 	96,169	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before income and mining taxes	 	 	163,477	 	 	121,903	 	 	77,362	 	 	104,766	 	 	(110,584	)	 	(850,172	)	 	107,510	 	 	77,176	 	
Income and mining taxes	 	 	42,016	 	 	33,940	 	 	32,098	 	 	35,941	 	 	(28,970	)	 	(248,742	)	 	28,962	 	 	33,904	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) for the period	 	$	121,461	 	$	87,963	 	$	45,264	 	$	68,825	 	$	(81,614	)	$	(601,430	)	$	78,548	 	$	43,272	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Attributed to non-controlling interest	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	(60	)	$	—	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Attributed to common shareholders	 	$	121,461	 	$	87,963	 	$	45,264	 	$	68,825	 	$	(81,614	)	$	(601,370	)	$	78,548	 	$	43,272	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) per share — basic	 	$	0.73	 	$	0.53	 	$	0.27	 	$	0.41	 	$	(0.48	)	$	(3.53	)	$	0.46	 	$	0.25	 	
Net income (loss) per share — diluted	 	$	0.71	 	$	0.51	 	$	0.26	 	$	0.40	 	$	(0.48	)	$	(3.53	)	$	0.46	 	$	0.25	 	
Cash flows	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash provided by operating activities	 	$	156,829	 	$	90,576	 	$	171,043	 	$	162,821	 	$	197,570	 	$	132,028	 	$	196,497	 	$	194,082	 	
Cash used in investing activities	 	$	(163,798	)	$	(123,353	)	$	(89,957	)	$	(116,173	)	$	(247,772	)	$	(306,583	)	$	(88,908	)	$	(68,619	)	
Cash provided by (used in) financing activities	 	$	531	 	$	(10,408	)	$	(68,842	)	$	(22,180	)	$	29,106	 	$	244,461	 	$	(132,078	)	$	(29,258	)	

(i)
Includes Creston Mascota deposit at Pinos Altos.
12

AGNICO-EAGLE MINES LIMITED

CONSOLIDATED BALANCE SHEETS

(thousands of United States dollars, US GAAP basis)
(Unaudited)

								
 	 	As at
June 30,
2012	 	As at
December 31,
2011	 	
ASSETS	 	 	 	 	 	 	 	
Current	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	250,470	 	$	179,447	 	
Short-term investments	 	 	3,008	 	 	6,570	 	
Restricted cash	 	 	35,574	 	 	35,441	 	
Trade receivables	 	 	75,892	 	 	75,899	 	
Inventories:	 	 	 	 	 	 	 	
Ore stockpiles	 	 	26,537	 	 	28,155	 	
Concentrates and dore bars	 	 	65,211	 	 	57,528	 	
Supplies	 	 	175,100	 	 	182,389	 	
Income taxes recoverable	 	 	—	 	 	371	 	
Available-for-sale securities (note 7)	 	 	76,525	 	 	145,411	 	
Other current assets	 	 	100,575	 	 	110,369	 	
 	 	 	 	 	 	
Total current assets	 	 	808,892	 	 	821,580	 	
 	 	 	 	 	 	
Other assets	 	 	86,200	 	 	88,048	 	
Goodwill	 	 	229,279	 	 	229,279	 	
Property, plant and mine development	 	 	3,943,179	 	 	3,895,355	 	
 	 	 	 	 	 	
	 	$	5,067,550	 	$	5,034,262	 	
 	 	 	 	 	 	
LIABILITIES AND SHAREHOLDERS' EQUITY	 	 	 	 	 	 	 	
Current	 	 	 	 	 	 	 	
Accounts payable and accrued liabilities	 	$	215,408	 	$	203,547	 	
Environmental remediation liability (note 12)	 	 	32,953	 	 	26,069	 	
Interest payable	 	 	9,301	 	 	9,356	 	
Income taxes payable	 	 	43,882	 	 	—	 	
Capital lease obligations	 	 	12,176	 	 	11,068	 	
Fair value of derivative financial instruments (note 9)	 	 	4,129	 	 	4,404	 	
 	 	 	 	 	 	
Total current liabilities	 	 	317,849	 	 	254,444	 	
 	 	 	 	 	 	
Long-term debt (note 8)	 	 	830,000	 	 	920,095	 	
Reclamation provision and other liabilities	 	 	118,072	 	 	145,988	 	
Deferred income and mining tax liabilities	 	 	527,818	 	 	498,572	 	
SHAREHOLDERS' EQUITY	 	 	 	 	 	 	 	
Common shares (note 5)	 	 	 	 	 	 	 	
Outstanding — 171,443,385 common shares issued, less 273,980 shares held in trust	 	 	3,194,581	 	 	3,181,381	 	
Stock options (note 6)	 	 	137,879	 	 	117,694	 	
Warrants	 	 	24,858	 	 	24,858	 	
Contributed surplus	 	 	15,665	 	 	15,166	 	
Deficit	 	 	(75,505	)	 	(129,021	)	
Accumulated other comprehensive loss	 	 	(23,667	)	 	(7,106	)	
 	 	 	 	 	 	
	 	 	3,273,811	 	 	3,202,972	 	
 	 	 	 	 	 	
Non-controlling interest	 	 	—	 	 	12,191	 	
 	 	 	 	 	 	
Total shareholders' equity	 	 	3,273,811	 	 	3,215,163	 	
 	 	 	 	 	 	
	 	$	5,067,550	 	$	5,034,262	 	
 	 	 	 	 	 	
See accompanying notes
13

AGNICO-EAGLE MINES LIMITED

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(thousands of United States dollars, except share and per share amounts, US GAAP basis)
(Unaudited)

														
 	 	Three Months Ended June 30,	 	Six Months Ended June 30,	 	
 	 	2012	 	2011	 	2012	 	2011	 	
REVENUES	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues from mining operations	 	$	459,561	 	$	433,691	 	$	932,495	 	$	845,759	 	
COSTS, EXPENSES AND OTHER INCOME	 	 	 	 	 	 	 	 	 	 	 	 	 	
Production	 	 	219,906	 	 	212,754	 	 	434,941	 	 	411,321	 	
Exploration and corporate development	 	 	34,286	 	 	17,289	 	 	57,394	 	 	34,267	 	
Amortization of property, plant and mine development	 	 	66,310	 	 	59,235	 	 	130,863	 	 	121,164	 	
General and administrative	 	 	32,015	 	 	24,122	 	 	65,943	 	 	59,274	 	
Impairment loss on available-for-sale securities	 	 	11,581	 	 	—	 	 	11,581	 	 	—	 	
Provincial capital tax	 	 	4,001	 	 	—	 	 	4,001	 	 	—	 	
Interest expense	 	 	14,220	 	 	13,989	 	 	28,667	 	 	27,997	 	
Interest and sundry expense (income)	 	 	23	 	 	224	 	 	(246	)	 	(24	)	
Loss (gain) on derivative financial instruments	 	 	4,321	 	 	(981	)	 	3,426	 	 	(2,332	)	
Loss (gain) on sale of available-for-sale securities (note 7)	 	 	6,731	 	 	(420	)	 	6,731	 	 	(4,814	)	
Foreign currency translation loss (gain)	 	 	(11,009	)	 	2,713	 	 	4,508	 	 	16,778	 	
 	 	 	 	 	 	 	 	 	 	
Income before income and mining taxes	 	 	77,176	 	 	104,766	 	 	184,686	 	 	182,128	 	
Income and mining taxes	 	 	33,904	 	 	35,941	 	 	62,866	 	 	68,039	 	
 	 	 	 	 	 	 	 	 	 	
Net income for the period	 	$	43,272	 	$	68,825	 	$	121,820	 	$	114,089	 	
 	 	 	 	 	 	 	 	 	 	
Net income per share — basic (note 5)	 	$	0.25	 	$	0.41	 	$	0.71	 	$	0.68	 	
 	 	 	 	 	 	 	 	 	 	
Net income per share — diluted (note 5)	 	$	0.25	 	$	0.40	 	$	0.71	 	$	0.66	 	
 	 	 	 	 	 	 	 	 	 	
Cash dividends declared per common share	 	$	0.20	 	$	—	 	$	0.40	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	
Comprehensive income	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income for the period	 	$	43,272	 	$	68,825	 	$	121,820	 	$	114,089	 	
 	 	 	 	 	 	 	 	 	 	
Other comprehensive loss:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized gain (loss) on derivative financial instrument hedging activities	 	 	(5,540	)	 	—	 	 	1,734	 	 	—	 	
Adjustments for derivative financial instruments settled during the period	 	 	527	 	 	—	 	 	17	 	 	—	 	
Unrealized gain (loss) on available-for-sale securities	 	 	(10,477	)	 	(3,492	)	 	(25,496	)	 	3,575	 	
Adjustments for realized loss (gain) on available-for-sale securities due to dispositions during the period	 	 	6,731	 	 	(420	)	 	6,731	 	 	(4,814	)	
Change in unrealized gain on pension liability	 	 	1,051	 	 	110	 	 	1,603	 	 	220	 	
Tax effect of other comprehensive income (loss) items	 	 	1,022	 	 	535	 	 	(1,150	)	 	(45	)	
 	 	 	 	 	 	 	 	 	 	
Other comprehensive loss for the period	 	 	(6,686	)	 	(3,267	)	 	(16,561	)	 	(1,064	)	
 	 	 	 	 	 	 	 	 	 	
Comprehensive income for the period	 	$	36,586	 	$	65,558	 	$	105,259	 	$	113,025	 	
 	 	 	 	 	 	 	 	 	 	
See accompanying notes
14

AGNICO-EAGLE MINES LIMITED

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(thousands of United States dollars, US GAAP basis)
(Unaudited)

																										
 	 	Common Shares	 	 	 	 	 	 	 	 	 	 	 	 	 	
 			 	 	 	 	 	 	 	 	 	Accumulated
Other
Comprehensive
Income (Loss)	 	 	 	
 	 	Number of
Shares	 	$ Amount	 	Stock
Options	 	Warrants	 	Contributed
Surplus	 	Retained
Earnings
(Deficit)			 	Non-
controlling
Interest	 	
Six months ended June 30:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance December 31, 2010	 	 	
168,720,355	 	
$	
3,078,217	 	
$	
78,554	 	
$	
24,858	 	
$	
15,166	 	
$	
440,265	 	
$	
28,390	 	
$	
—	 	
Shares issued under employee stock option plan	 	 	217,388	 	 	11,163	 	 	(2,250	)	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	
Stock options	 	 	—	 	 	—	 	 	26,835	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	
Shares issued under the incentive share purchase plan	 	 	146,546	 	 	9,608	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	
Shares issued under the Company's dividend reinvestment plan	 	 	80,331	 	 	4,943	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	
Net income for the period	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	114,089	 	 	—	 	 	—	 	
Other comprehensive loss for the period	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	(1,064	)	 	—	 	
Restricted share unit plan	 	 	(22,800	)	 	(1,790	)	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance June 30, 2011	 	 	169,141,820	 	$	3,102,141	 	$	103,139	 	$	24,858	 	$	15,166	 	$	554,354	 	$	27,326	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance December 31, 2011	 	 	
170,813,736	 	
$	
3,181,381	 	
$	
117,694	 	
$	
24,858	 	
$	
15,166	 	
$	
(129,021	
)	
$	
(7,106	
)	
$	
12,191	 	
Shares issued under employee stock option plan	 	 	15,250	 	 	677	 	 	(126	)	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	
Stock options	 	 	—	 	 	—	 	 	20,311	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	
Shares issued under the incentive share purchase plan	 	 	289,212	 	 	10,590	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	
Shares issued under the Company's dividend reinvestment plan	 	 	210,378	 	 	7,570	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	
Shares issued for purchase of mining property	 	 	68,941	 	 	2,447	 	 	—	 	 	—	 	 	499	 	 	—	 	 	—	 	 	—	 	
Non-controlling interest eliminated upon acquisition	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(12,191	)	
Net income for the period	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	121,820	 	 	—	 	 	—	 	
Dividends declared ($0.40 per share)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(68,304	)	 	 	 	 	 	 	
Other comprehensive loss for the period	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	(16,561	)	 	—	 	
Restricted share unit plan	 	 	(228,112	)	 	(8,084	)	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance June 30, 2012	 	 	171,169,405	 	$	3,194,581	 	$	137,879	 	$	24,858	 	$	15,665	 	$	(75,505	)	$	(23,667	)	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes
15

AGNICO-EAGLE MINES LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(thousands of United States dollars, US GAAP basis)
(Unaudited)

														
 	 	Three Months Ended June 30,	 	Six Months Ended June 30,	 	
 	 	2012	 	2011	 	2012	 	2011	 	
Operating activities	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income for the period	 	$	43,272	 	$	68,825	 	$	121,820	 	$	114,089	 	
Add (deduct) items not affecting cash:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amortization of property, plant and mine development	 	 	66,310	 	 	59,235	 	 	130,863	 	 	121,164	 	
Deferred income and mining taxes	 	 	15,069	 	 	17,035	 	 	25,389	 	 	25,914	 	
Loss (gain) on available-for-sale securities and derivative financial instruments	 	 	24,139	 	 	(534	)	 	23,244	 	 	(6,962	)	
Stock-based compensation	 	 	11,296	 	 	10,465	 	 	27,068	 	 	31,491	 	
Foreign currency translation loss (gain)	 	 	(11,009	)	 	2,713	 	 	4,508	 	 	16,778	 	
Other	 	 	(1,016	)	 	3,957	 	 	2,678	 	 	9,892	 	
Adjustment for settlement of environmental remediation	 	 	(6,059	)	 	—	 	 	(12,291	)	 	—	 	
Changes in non-cash working capital balances:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Trade receivables	 	 	15,000	 	 	6,745	 	 	7	 	 	48,128	 	
Income taxes (payable) recoverable	 	 	24,013	 	 	550	 	 	43,882	 	 	(12,507	)	
Inventories	 	 	(9,295	)	 	(37,667	)	 	2,254	 	 	(54,262	)	
Other current assets	 	 	(8,955	)	 	(9,525	)	 	9,855	 	 	(5,059	)	
Accounts payable and accrued liabilities	 	 	41,209	 	 	51,727	 	 	11,357	 	 	48,856	 	
Interest payable	 	 	(9,892	)	 	(10,705	)	 	(55	)	 	65	 	
 	 	 	 	 	 	 	 	 	 	
Cash provided by operating activities	 	 	194,082	 	 	162,821	 	 	390,579	 	 	337,587	 	
 	 	 	 	 	 	 	 	 	 	
Investing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	
Additions to property, plant and mine development	 	 	(104,368	)	 	(114,402	)	 	(180,363	)	 	(211,251	)	
Acquisition of Grayd Resource Corporation (note 13)	 	 	—	 	 	—	 	 	(9,322	)	 	—	 	
Decrease in short-term investments	 	 	2,983	 	 	1,904	 	 	3,562	 	 	4,105	 	
Net proceeds on available-for-sale securities and other	 	 	30,732	 	 	566	 	 	30,732	 	 	9,330	 	
Purchase of available-for-sale securities	 	 	—	 	 	(2,720	)	 	(2,003	)	 	(7,285	)	
Decrease (increase) in restricted cash	 	 	2,034	 	 	(1,521	)	 	(133	)	 	(1,029	)	
 	 	 	 	 	 	 	 	 	 	
Cash used in investing activities	 	 	(68,619	)	 	(116,173	)	 	(157,527	)	 	(206,130	)	
 	 	 	 	 	 	 	 	 	 	
Financing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	
Dividends paid	 	 	(30,283	)	 	(23,313	)	 	(60,798	)	 	(49,133	)	
Repayment of capital lease obligations	 	 	(2,744	)	 	(4,186	)	 	(5,856	)	 	(7,239	)	
Proceeds from long-term debt	 	 	255,000	 	 	80,000	 	 	255,000	 	 	80,000	 	
Repayment of long-term debt	 	 	(255,000	)	 	(80,000	)	 	(345,000	)	 	(130,000	)	
Long-term debt financing costs	 	 	(327	)	 	—	 	 	(327	)	 	—	 	
Repurchase of common shares for restricted share unit plan	 	 	—	 	 	—	 	 	(12,031	)	 	(3,723	)	
Common shares issued	 	 	4,096	 	 	5,319	 	 	7,676	 	 	15,350	 	
 	 	 	 	 	 	 	 	 	 	
Cash used in financing activities	 	 	(29,258	)	 	(22,180	)	 	(161,336	)	 	(94,745	)	
 	 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash and cash equivalents	 	 	(1,211	)	 	49	 	 	(693	)	 	678	 	
 	 	 	 	 	 	 	 	 	 	
Net increase in cash and cash equivalents during the period	 	 	94,994	 	 	24,517	 	 	71,023	 	 	37,390	 	
Cash and cash equivalents, beginning of period	 	 	155,476	 	 	108,433	 	 	179,447	 	 	95,560	 	
 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents, end of period	 	$	250,470	 	$	132,950	 	$	250,470	 	$	132,950	 	
 	 	 	 	 	 	 	 	 	 	
Supplemental cash flow information	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest paid	 	$	23,887	 	$	23,075	 	$	27,980	 	$	26,304	 	
 	 	 	 	 	 	 	 	 	 	
Income and mining taxes paid	 	$	1,286	 	$	14,537	 	$	5,591	 	$	49,756	 	
 	 	 	 	 	 	 	 	 	 	
See accompanying notes
16

AGNICO-EAGLE MINES LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
1.     BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements of Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") have been prepared in accordance with United States generally accepted accounting principles ("US GAAP") in US dollars. They do not include all of the disclosures required by US GAAP for annual financial statements. Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the fiscal 2011 audited annual consolidated financial statements, including the accounting policies and notes thereto, included in the Annual Report and Annual Information Form/Form 20-F for the year ended December 31, 2011. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, which consist only of normal and recurring adjustments necessary to present fairly the financial position as at June 30, 2012 and the results of operations and cash flows for the three and six months ended June 30, 2012 and June 30, 2011.
Operating results for the three and six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2012.
2.     USE OF ESTIMATES
The preparation of the interim consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the interim consolidated financial statements and accompanying notes. Management believes that the estimates used in the preparation of the interim consolidated financial statements are reasonable and prudent; however, actual results could differ from these estimates.
3.     ACCOUNTING POLICIES
These interim consolidated financial statements follow the same accounting policies and methods of their application as the December 31, 2011 audited annual consolidated financial statements except for the changes discussed below.
Recently Adopted Accounting Pronouncements
Fair Value Accounting
In May 2011, Accounting Standards Codification ("ASC") guidance was issued related to disclosures around fair value accounting. The updated guidance clarifies different components of fair value accounting including the application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity's shareholders' equity and disclosing quantitative information about the unobservable inputs used in fair value measurements that are categorized in Level 3 of the fair value hierarchy. Adoption of this updated guidance, effective for the Company's fiscal year beginning January 1, 2012, had no impact on the Company's financial position, results of operations or cash flows.
Comprehensive Income
In June 2011, ASC guidance was issued related to comprehensive income. Under the updated guidance, an entity will have the option to present the total of comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, the update requires certain disclosure requirements when reporting other comprehensive income. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income must be reclassified to income. In December 2011, updated guidance was issued to defer the effective date pertaining to reclassification adjustments out of accumulated other comprehensive income until the Financial Accounting Standards Board ("FASB") is able to reconsider those paragraphs. Adoption of the portion of this updated guidance effective for the Company's fiscal year beginning January 1, 2012 had no impact on the Company's financial position, results of operations or cash flows.
Goodwill Impairment
In September 2011, ASC guidance was issued related to testing goodwill for impairment. Under the updated guidance, entities are permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test per Topic 350. Previous guidance required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit is less than its carrying amount, then the second step of the test would be performed to measure the amount of the impairment loss, if any. An entity is no longer required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its
17

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
3.     ACCOUNTING POLICIES (Continued)
carrying amount. Adoption of this updated guidance, effective for the Company's fiscal year beginning January 1, 2012, had no impact on the Company's financial position, results of operations or cash flows.
Recently Issued Accounting Pronouncements and Developments
Disclosures about Offsetting Assets and Liabilities
In November 2011, ASC guidance was issued related to disclosures around offsetting financial instrument and derivative instrument assets and liabilities. Under the updated guidance, entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statements of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The update is effective for the Company's fiscal year beginning January 1, 2013. Agnico-Eagle is evaluating the potential impact of adopting this guidance on the Company's consolidated financial position, results of operations and cash flows.
4.     FAIR VALUE MEASUREMENT
ASC 820 — Fair Value Measurement and Disclosure defines fair value, establishes a framework for measuring fair value under US GAAP, and requires expanded disclosures about fair value measurements. The three levels of the fair value hierarchy under the Fair Value Measurements and Disclosure Topic of the FASB Accounting Standards Codification are as follows:
Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 — Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
Fair value is the value at which a financial instrument could be closed out or sold in a transaction with a willing and knowledgeable counterparty over a period of time consistent with the Company's investment strategy. Fair value is based on quoted market prices, where available. If market quotes are not available, fair value is based on internally developed models that use market-based or independent information as inputs. These models could produce a fair value that may not be reflective of future fair value.
The following table summarizes the Company's financial assets measured at fair value as at June 30, 2012 within the fair value hierarchy:

															
 	 	 	Total	 	Level 1	 	Level 2	 	Level 3	 	
 	Financial assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Cash equivalents and short-term investments (i)	 	$	7,153	 	$	—	 	$	7,153	 	$	—	 	
 	Available-for-sale securities (ii)	 	 	76,525	 	 	76,525	 	 	—	 	 	—	 	
 	Trade receivables (iii)	 	 	75,892	 	 	—	 	 	75,892	 	 	—	 	
 	Fair value of derivative financial instruments (iv)	 	 	707	 	 	—	 	 	707	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	
 		 	$	160,277	 	$	76,525	 	$	83,752	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	
 	Financial liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Fair value of derivative financial instruments (v)	 	$	4,836	 	$	—	 	$	4,836	 	$	—	 	

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

(ii)
Available-for-sale securities are recorded at fair value using quoted market prices (classified within Level 1 of the fair value hierarchy).
18

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
4.     FAIR VALUE MEASUREMENT (Continued)
(iii)
Trade receivables from provisional invoices for concentrate sales are valued using quoted forward rates derived from observable market data based on the month of expected settlement (classified within Level 2 of the fair value hierarchy).

(iv)
Recorded at fair value using external pricing service providers with observable inputs (classified within Level 2 of the fair value hierarchy).

(v)
Recorded at fair value based on broker-dealer quotations (classified within Level 2 of the fair value hierarchy)
Both the Company's cash equivalents and short-term investments are classified within Level 2 of the fair value hierarchy because they are held to maturity and are valued using interest rates observable at commonly quoted intervals. Cash equivalents are market securities with remaining maturities of three months or less at the date of purchase. The short-term investments are market securities with remaining maturities of greater than three months at the date of purchase.
The Company's available-for-sale securities that are recorded at fair value using quoted market prices are classified as Level 1 of the fair value hierarchy.
In the event that a decline in the fair value of an investment occurs and the decline in value is considered to be other-than-temporary, an impairment charge is recorded in the interim consolidated statements of income and comprehensive income and a new cost basis for the investment is established. The Company assesses whether a decline in value is considered to be other-than-temporary by considering available evidence, including changes in general market conditions, specific industry and 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 first quarter of 2009, the Company implemented a restricted share unit ("RSU") plan for certain employees. Effective January 1, 2012 the RSU plan was amended to include Directors and Senior Executives of Agnico-Eagle. A deferred compensation balance was recorded for the total grant-date value on the date of the grant. The deferred compensation balance was recorded as a reduction of shareholders' equity and is being amortized as compensation expense (or capitalized to construction in progress) over the applicable vesting period of two to three years.
During the first quarter of 2012, the Company funded the RSU plan by transferring $12.0 million (2011 — $3.7 million) to an employee benefit trust (the "Trust") that then purchased shares of the Company in the open market. The Trust is funded once per year during the first quarter of each year. Compensation cost for the RSU plan incorporates an expected forfeiture rate. The forfeiture rate is estimated based on the Company's historical employee turnover rates and expectations of future forfeiture rates that incorporate various factors that include historical employee stock option plan forfeiture rates. For the years 2009 through 2012, the impact of forfeitures was not material. For accounting purposes, the Trust is treated as a variable interest entity and consolidated in the accounts of the Company. On consolidation, the dividends paid on the shares held by the Trust are eliminated. The shares purchased and held by the Trust are treated as not outstanding for the basic earnings per share ("EPS") calculations. They are included in the basic EPS calculations once they have vested. All of the unvested shares held by the Trust are included in the diluted EPS calculations.
The following table summarizes the maximum number of common shares that would be outstanding if all instruments outstanding at June 30, 2012 were exercised:

						
 	Common shares outstanding at June 30, 2012	 	 	171,169,405	 	
 	Employees' stock options	 	 	11,592,401	 	
 	Warrants	 	 	8,600,000	 	
 	Restricted share unit plan	 	 	273,980	 	
 	 	 	 	 	
 		 	 	191,635,786	 	
 	 	 	 	 	
During the six months ended June 30, 2012, 3,251,000 (2011 — 2,593,785) options were granted with a weighted average exercise price of C$36.98 (2011 — C$76.46), 15,250 (2011 — 217,388) employee stock options were exercised for cash of $0.6 million (2011 — $8.9 million), 120,750 (2011 — 91,750) options were cancelled with a weighted average exercise price of C$60.37 (2011 — C$66.87) and 481,650 (2011 — nil) options expired with a weighted average exercise price of C$47.49 (2011 — nil).
19

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
5.     SHAREHOLDERS' EQUITY (Continued)
During the three months ended June 30, 2012, 23,000 (2011 — 19,000) options were granted with a weighted average exercise price of C$39.46 (2011 — C$63.39), 15,250 (2011 — 53,169) employee stock options were exercised for cash of $0.6 million (2011 — $2.1 million), 30,750 (2011 — nil) options were cancelled with a weighted average exercise price of C$60.56 (2011 — nil) and 32,500 (2011 — nil) options expired with a weighted average exercise price of C$39.18 (2011 — nil).
The following table summarizes the reconciliation for the weighted average number of common shares in the calculation of basic and diluted income per share:

															
 	 	 	Three Months Ended
June 30,	 	Six Months Ended
June 30,	 	
 	 	 	2012	 	2011	 	2012	 	2011	 	
 	Net income for the period	 	$	43,272	 	$	68,825	 	$	121,820	 	$	114,089	 	
 	 	 	 	 	 	 	 	 	 	 	
 	Weighted average number of common shares outstanding — basic (in thousands)	 	 	170,985	 	 	169,029	 	 	170,937	 	 	168,949	 	
 	Add: Dilutive impact of employee stock options	 	 	—	 	 	1,087	 	 	—	 	 	1,087	 	
 	          Dilutive impact of warrants	 	 	—	 	 	2,266	 	 	—	 	 	2,530	 	
 	          Dilutive impact of shares related to RSU plan	 	 	294	 	 	66	 	 	211	 	 	66	 	
 	 	 	 	 	 	 	 	 	 	 	
 	Weighted average number of common shares outstanding — diluted (in thousands)	 	 	171,279	 	 	172,448	 	 	171,148	 	 	172,632	 	
 	 	 	 	 	 	 	 	 	 	 	
 	Net income per share — basic	 	$	0.25	 	$	0.41	 	$	0.71	 	$	0.68	 	
 	 	 	 	 	 	 	 	 	 	 	
 	Net income per share — diluted	 	$	0.25	 	$	0.40	 	$	0.71	 	$	0.66	 	
 	 	 	 	 	 	 	 	 	 	 	
The calculation of diluted net income per share has been computed using the treasury stock method.
For the three and six months ended June 30, 2012, all employee stock options and warrants were excluded from the computation of diluted weighted average common shares because their effect would have been anti-dilutive.
For the three and six months ended June 30, 2011, 2,046,346 and 718,696 employee stock options were excluded from the computation of diluted weighted average common shares, respectively, because their effect would have been anti-dilutive. For the three and six months ended June 30, 2011, all of the Company's warrants were dilutive and were included in the computation of diluted weighted average common shares.
6.     STOCK-BASED COMPENSATION
The following continuity summarizes activity with respect to the Company's outstanding stock options:

									
 	 	 	Six Months Ended
June 30, 2012	 	
 	 	 	Number of Options	 	Weighted average
exercise price	 	
 	Outstanding, beginning of period	 	 	8,959,051	 	C$	62.88	 	
 	Granted	 	 	3,251,000	 	 	36.98	 	
 	Exercised	 	 	(15,250	)	 	37.05	 	
 	Forfeited	 	 	(120,750	)	 	60.37	 	
 	Expired	 	 	(481,650	)	 	47.49	 	
 	 	 	 	 	 	 	
 	Outstanding, end of period	 	 	11,592,401	 	C$	56.32	 	
 	 	 	 	 	 	 	
 	Options exercisable at end of period	 	 	7,209,989	 	C$	59.20	 	
 	 	 	 	 	 	 	
20

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
6.     STOCK-BASED COMPENSATION (Continued)
For the six months ended June 30, 2012 and June 30, 2011, the Company estimated the fair value of options under the Black-Scholes option pricing model using the following weighted average assumptions:

									
 	 	 	Six Months Ended
June 30,	 	
 	 	 	2012	 	2011	 	
 	Risk-free interest rate	 	 	1.25%	 	 	1.96%	 	
 	Expected life of options (in years)	 	 	2.8	 	 	2.5	 	
 	Expected volatility of Agnico-Eagle's share price	 	 	37.5%	 	 	34.6%	 	
 	Expected dividend yield	 	 	2.17%	 	 	0.88%	 	
7.     AVAILABLE-FOR-SALE SECURITIES
During the three months ended June 30, 2012, the Company received proceeds of $30.7 million (2011 — $0.5 million) and recognized a loss before income taxes of $6.7 million (2011 — $0.4 million gain) on the sale of certain available-for-sale securities.
During the six months ended June 30, 2012, the Company received proceeds of $30.7 (2011 — $9.3 million) and recognized a loss before income taxes of $6.7 million (2011 — $4.8 million gain) on the sale of certain available-for-sale securities.
Available-for-sale securities consist of equity securities whose cost basis is determined using the average cost method. Available-for-sale securities are carried at fair value and comprise the following:

									
 	 	 	As at
June 30, 2012	 	As at
December 31, 2011	 	
 	Available-for-sale securities in an unrealized gain position	 	 	 	 	 	 	 	
 	Cost (net of impairments)	 	$	31,005	 	$	127,344	 	
 	Unrealized gains in accumulated other comprehensive loss	 	 	1,896	 	 	16,408	 	
 	 	 	 	 	 	 	
 	Estimated fair value	 	 	32,901	 	 	143,752	 	
 	 	 	 	 	 	 	
 	Available-for-sale securities in an unrealized loss position	 	 	 	 	 	 	 	
 	Cost (net of impairments)	 	 	47,867	 	 	1,717	 	
 	Unrealized losses in accumulated other comprehensive loss	 	 	(4,243	)	 	(58	)	
 	 	 	 	 	 	 	
 	Estimated fair value	 	 	43,624	 	 	1,659	 	
 	 	 	 	 	 	 	
 	Total estimated fair value of available-for-sale securities	 	$	76,525	 	$	145,411	 	
 	 	 	 	 	 	 	
The Company's investments in available-for-sale securities consist primarily of investments in common shares of entities in the mining industry. During the three months ended June 30, 2012, certain investments fell into an unrealized loss position. In each case, the Company evaluated the near-term prospects of the issuers in relation to the severity and duration of the impairment. As a result of these evaluations, the Company recorded an $11.6 million impairment loss on certain available-for-sale securities during the three months ended June 30, 2012 that were considered other-than-temporarily impaired.
At June 30, 2012, the fair value of investments in an unrealized loss position, after recording $4.2 million in other-than-temporary impairment losses, was $43.6 million. The Company also evaluated these securities in relation to the severity and duration (less than three 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 June 30, 2012.
8.     LONG-TERM DEBT
On April 7, 2010, the Company closed a private placement consisting of $600.0 million of guaranteed senior unsecured notes due in 2017, 2020 and 2022 with a weighted average maturity of 9.84 years and weighted average yield of 6.59%. The 2010 Notes contain covenants that restrict, among other things, the ability of the Company to amalgamate or otherwise transfer its assets, sell material
21

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
8.     LONG-TERM DEBT (Continued)
assets and carry on a business other than one related to the mining business and the ability of material and certain other subsidiaries of the Company to incur indebtedness. The 2010 Notes also require the Company to maintain the same financial ratios and same minimum tangible net worth as under the Credit Facility. The Company was in compliance with these covenants as at June 30, 2012.
On August 4, 2011, the Company amended and restated its Credit Facility. The total amount available under the Credit Facility remains unchanged at $1.2 billion; however, the maturity date was extended from June 22, 2014 to June 22, 2016. The Credit Facility contains covenants that restrict, among other things, the ability of the Company to incur additional indebtedness, make distributions in certain circumstances, sell material assets and carry on a business other than one related to the mining business. The Company is also required to maintain a total net debt to EBITDA ratio below a specified maximum value as well as a minimum tangible net worth. The Company was in compliance with these covenants as at June 30, 2012. During the three months ended June 30, 2012, the Company repaid nil, net, on the Credit Facility (2011 — repaid nil, net). At June 30, 2012, the Credit Facility was drawn down by $230.0 million (December 31, 2011 — $320.0 million).
Total long-term debt interest costs incurred during the three and six months ended June 30, 2012 was $10.9 million (2011 — $10.3 million) and $22.4 million (2011 — $20.3 million), respectively. Total interest costs capitalized to property, plant and mine development for the three and six months ended June 30, 2012 was $0.3 million (2011 — $0.2 million) and $0.5 million (2011 — $0.2 million), respectively. The outstanding long-term debt balance as at June 30, 2012 relates to the $600.0 million in outstanding notes and the $230.0 million outstanding on the Credit Facility.
9.     FINANCIAL INSTRUMENTS
Currency Risk Management
The Company utilizes foreign exchange hedges to reduce the variability in expected future cash flows arising from changes in foreign currency exchange. The hedged items represent a portion of the Canadian dollar denominated cash outflows arising from Canadian dollar denominated expenditures in 2012.
As at June 30, 2012, forward contracts with a cash flow hedging relationship that did qualify for hedge accounting under ASC 815 — Derivatives and Hedging, hedged $150.0 million of 2012 expenditures. $25.0 million will expire each month during 2012 at an average rate of US$1.00 = C$1.01. There were no similar effective foreign exchange forward contracts during the three and six months ended June 30, 2011. The effective hedges that expired for the three and six months ended June 30, 2012 resulted in a net realized loss of $0.5 million and nil, respectively. As of June 30, 2012, the Company recognized a mark-to-market loss of $2.3 million in Accumulated other comprehensive loss ("AOCL"). Amounts deferred in AOCL are reclassified to Production costs, as applicable, when the derivative financial instrument has settled.
In March 2011, the Company entered into a foreign exchange forward contract at a rate of US$1.00 = C$0.99 with an ineffective cash flow hedging relationship that did not qualify for hedge accounting. There were no forward contracts with ineffective cash flow hedging relationships purchased or outstanding during the three and six months ended June 30, 2012. The risk hedged in 2011 was the variability in expected future cash flows arising from changes in foreign currency exchange. The hedged items represented a portion of the unhedged forecasted Canadian dollar denominated cash outflows arising from Canadian dollar denominated expenditures in 2011. In 2011, the forward contract hedged $90.0 million of 2011 expenditures. $10.0 million was scheduled to expire each month starting in April 2011 and to be completely expired by December 31, 2011. The ineffective hedges that expired during the second quarter of 2011 resulted in a realized gain of $0.9 million for the three and six months ended June 30, 2011. As of June 30, 2011, the Company recognized a mark-to-market gain of $1.4 million in the Loss (gain) on derivative financial instruments line item of the interim consolidated statements of income and comprehensive income.
Mark-to-market gains (losses) related to foreign exchange derivative financial instruments are based on broker-dealer quotations that utilize period end forward pricing of the currency hedged to calculate fair value.
The Company's other foreign currency derivative strategies in 2012 and 2011 consisted mainly of writing US dollar call options with short maturities to generate premiums that would, in essence, enhance the spot transaction rate received when exchanging US dollars for Canadian dollars. All of these derivative transactions expired prior to period-end such that no derivatives were outstanding on June 30, 2012 or June 30, 2011. For the three and six months ended June 30, 2012, the Company's foreign currency derivative financial instruments generated $0.6 million and $1.0 million, respectively, (2011 — $1.2 million and $2.5 million, respectively) in call option premiums that were recognized in the Loss (gain) on derivative financial instruments line item of the interim consolidated statements of income and comprehensive income.
22

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
9.     FINANCIAL INSTRUMENTS (Continued)
Commodity Price Risk Management
During the three and six months ended June 30, 2012, the Company recorded intra-quarter zinc derivative financial instruments realized gains of nil and $0.5 million, respectively, (2011 — nil) that were recognized in the Loss (gain) on derivative financial instruments line item of the interim consolidated statements of income and comprehensive income. There were no intra-quarter zinc derivative financial instruments outstanding at June 30, 2012 and no intra-quarter zinc derivative financial instruments were purchased during the three and six months ended June 30, 2011.
In the first quarter of 2011, to mitigate the risks associated with fluctuating zinc prices, the Company entered into a zero-cost collar to hedge the price on a portion of zinc associated with the LaRonde mine's 2011 production. The purchase of zinc put options was financed through selling zinc call options at a higher level such that the net premium payable to the counterparty by the Company was nil. All zinc financial instruments expired or were realized in 2011. There were no zinc zero-cost collars purchased or outstanding during the three or six months ended June 30, 2012.
In 2011, a total of 20,000 metric tonnes of zinc call options were written at a strike price of $2,500 per metric tonne with 2,000 metric tonnes expiring each month beginning February 28, 2011. A total of 20,000 metric tonnes of zinc put options were purchased at a strike price of $2,200 per metric tonne with 2,000 metric tonnes expiring each month beginning February 28, 2011. While setting a minimum price, the zero-cost collar strategy also limits participation to zinc prices above $2,500 per metric tonne. These contracts did not qualify for hedge accounting. Gains or losses, along with mark-to-market adjustments were recognized in the Loss (gain) on derivative financial instruments line item of the interim consolidated statements of income and comprehensive income. The options that expired during the three months ended June 30, 2011 expired out of the money. The options that expired during the six months ended June 30, 2011 resulted in a realized gain of $0.1 million. As at June 30, 2011, the Company recorded an unrealized mark-to-market gain of $0.7 million relating to zinc derivative financial instruments.
The Company recognized a gain of nil on intra-quarter silver derivative financial instruments associated with timing of sales of silver products during the three and six months ended June 30, 2012 (2011 — losses of $1.3 million and $3.4 million, respectively) that were recognized in the Loss (gain) on derivative financial instruments line item of the interim consolidated statements of income and comprehensive income. There were no silver financial instruments purchased or outstanding during the three and six months ended June 30, 2012.
In the second quarter of 2012, to mitigate the risks associated with fluctuating diesel fuel prices, the Company entered into financial contracts to hedge the price on a portion of diesel fuel costs associated with the Meadowbank mine's diesel fuel exposure as it relates to operating costs. Financial contracts expiring in 2012 and totaling 9.5 million gallons of heating oil were entered into at an average price of $2.97 per gallon, which is approximately 55% of Meadowbank's expected 2012 diesel fuel exposure. In addition, financial contracts expiring in 2013 and totaling 0.5 million gallons of heating oil were entered into at an average price of $2.45 per gallon, which is approximately 3% of Meadowbank's expected 2013 diesel fuel exposure. The contracts expiring in 2012 did not qualify for hedge accounting and the related $2.5 million mark-to-market loss as at June 30, 2012 was recognized in the Loss (gain) on derivative financial instruments line item of the interim consolidated statements of income and comprehensive income. The contracts expiring in 2013 did qualify for hedge accounting and the related nil market-to-market gain as at June 30, 2012 was recognized in AOCL. No heating oil financial contracts expired during the first six months ended June 30, 2012 and no similar derivative financial instruments existed for the Company in 2011. Amounts deferred in AOCL are reclassified to Production costs, as applicable, when the derivative financial instrument has settled. Mark-to-market gains (losses) related to heating oil derivative financial instruments are based on broker-dealer quotations that utilize period end forward pricing to calculate fair value.
The fair value of the Company's derivative financial instruments are reported on the Fair value of derivative financial instruments line item of the interim consolidated balance sheets.
23

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
9.     FINANCIAL INSTRUMENTS (Continued)
The following table summarizes the changes in the Accumulated other comprehensive income (loss) balances recorded in the interim consolidated financial statements pertaining to derivative financial instrument hedging activities:

															
 	 	 	Three Months Ended
June 30,	 	Six Months Ended
June 30,	 	
 	 	 	2012	 	2011	 	2012	 	2011	 	
 	Accumulated other comprehensive income (loss), beginning of period	 	$	2,360	 	$	—	 	$	(4,404	)	$	—	 	
 	Adjustments for derivative financial instruments settled during the period (i)	 	 	527	 	 	—	 	 	17	 	 	—	 	
 	Other comprehensive (loss) gain — foreign exchange derivative financial instruments	 	 	(5,192	)	 	—	 	 	2,082	 	 	—	 	
 	Other comprehensive gain — heating oil derivative financial instruments	 	 	46	 	 	—	 	 	46	 	 	—	 	
 	Other comprehensive loss — other derivative financial instruments	 	 	(394	)	 	—	 	 	(394	)	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	
 	Accumulated other comprehensive loss, end of period	 	$	(2,653	)	$	—	 	$	(2,653	)	$	—	 	

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

															
 	 	 	Three Months Ended
June 30,	 	Six Months Ended
June 30,	 	
 	 	 	2012	 	2011	 	2012	 	2011	 	
 	Premiums realized on written foreign exchange call options	 	$	608	 	$	1,189	 	$	1,027	 	$	2,549	 	
 	Realized gain on derivative financial instruments settled during the period	 	 	—	 	 	879	 	 	—	 	 	879	 	
 	Mark-to-market (loss) gain on foreign exchange derivative financial instruments	 	 	—	 	 	(115	)	 	—	 	 	1,433	 	
 	Realized gain on zinc derivative financial instruments	 	 	—	 	 	149	 	 	476	 	 	149	 	
 	Mark-to-market gain on zinc derivative financial instruments	 	 	—	 	 	209	 	 	—	 	 	725	 	
 	Realized loss on silver derivative financial instruments	 	 	—	 	 	(1,330	)	 	—	 	 	(3,403	)	
 	Loss on heating oil derivative financial instruments and other	 	 	(4,929	)	 	—	 	 	(4,929	)	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	
 	(Loss) gain on derivative financial instruments	 	$	(4,321	)	$	981	 	$	(3,426	)	$	2,332	 	
 	 	 	 	 	 	 	 	 	 	 	
10.   COMMITMENTS AND CONTINGENCIES
As part of its ongoing business and operations, the Company has been required to provide assurance in the form of letters of credit for environmental and site restoration costs, custom credits, government grants and other general corporate purposes. As at June 30, 2012, the total amount of these guarantees was $129.2 million.
11.   SEGMENTED INFORMATION
Agnico-Eagle operates in a single industry, namely exploration for and production of gold. The Company's primary operations are in Canada, Mexico and Finland. The Company identifies its reportable segments as those operations whose operating results are reviewed by the Chief Executive Officer and that represent more than 10% of the combined revenue, profit or loss or total assets of all operating
24

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
11.   SEGMENTED INFORMATION (Continued)
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 interim consolidated balance sheets at June 30, 2012, $200.1 million relates to the Meliadine project that is a component of the Canada segment and $29.2 million relates to the La India project that is a component of the Latin America segment.
Corporate Head Office assets are included in the "Canada" segment and specific corporate income and expense items are noted separately below.
The Creston Mascota deposit at Pinos Altos achieved commercial production on March 1, 2011. The LaRonde mine extension achieved commercial production on December 1, 2011.

																					
 	Three Months Ended June 30, 2012 	 	Revenues
from
Mining
Operations	 	Production
Costs	 	Amortization of
Property, Plant
and Mine
Development	 	Exploration and
Corporate
Development	 	Foreign
Currency
Translation
Loss (Gain)	 	Segment
Income
(Loss)	 	
 	Canada	 	$	283,851	 	$	155,572	 	$	48,799	 	$	12,250	 	$	(6,946	)	$	74,176	 	
 	Europe	 	 	55,004	 	 	23,515	 	 	7,056	 	 	—	 	 	152	 	 	24,281	 	
 	Latin America	 	 	120,706	 	 	40,819	 	 	10,455	 	 	—	 	 	(3,953	)	 	73,385	 	
 	Exploration	 	 	—	 	 	—	 	 	—	 	 	22,036	 	 	(262	)	 	(21,774	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 		 	$	459,561	 	$	219,906	 	$	66,310	 	$	34,286	 	$	(11,009	)	$	150,068	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Segment income	 	$	150,068	 	
 	Corporate and Other:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	    Interest and sundry expense	 	 	(23	)	
 	    Impairment loss on available-for-sale securities	 	 	(11,581	)	
 	    Loss on sale of available-for-sale securities	 	 	(6,731	)	
 	    Loss on derivative financial instruments	 	 	(4,321	)	
 	    General and administrative	 	 	(32,015	)	
 	    Provincial capital tax	 	 	(4,001	)	
 	    Interest expense	 	 	(14,220	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Income before income and mining taxes	 	$	77,176	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
25

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
11.   SEGMENTED INFORMATION (Continued)

																					
 	Three Months Ended June 30, 2011 	 	Revenues
from
Mining
Operations	 	Production
Costs	 	Amortization of
Property, Plant
and Mine
Development	 	Exploration and
Corporate
Development	 	Foreign
Currency
Translation
Loss (Gain)	 	Segment
Income
(Loss)	 	
 	Canada	 	$	298,143	 	$	148,231	 	$	45,870	 	$	—	 	$	1,383	 	$	102,659	 	
 	Europe	 	 	44,895	 	 	26,192	 	 	5,509	 	 	—	 	 	(76	)	 	13,270	 	
 	Latin America	 	 	90,653	 	 	38,331	 	 	7,856	 	 	—	 	 	772	 	 	43,694	 	
 	Exploration	 	 	—	 	 	—	 	 	—	 	 	17,289	 	 	634	 	 	(17,923	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 		 	$	433,691	 	$	212,754	 	$	59,235	 	$	17,289	 	$	2,713	 	$	141,700	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Segment income	 	$	141,700	 	
 	Corporate and Other:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	    Interest and sundry expense	 	 	(224	)	
 	    Gain on sale of available-for-sale securities	 	 	420	 	
 	    Gain on derivative financial instruments	 	 	981	 	
 	    General and administrative	 	 	(24,122	)	
 	    Interest expense	 	 	(13,989	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Income before income and mining taxes	 	$	104,766	 	

																					
 	Six Months Ended June 30, 2012 	 	Revenues
from
Mining
Operations	 	Production
Costs	 	Amortization of
Property, Plant
and Mine
Development	 	Exploration and
Corporate
Development	 	Foreign
Currency
Translation
Loss (Gain)	 	Segment
Income
(Loss)	 	
 	Canada	 	$	577,410	 	$	309,416	 	$	95,904	 	$	23,963	 	$	1,667	 	$	146,460	 	
 	Europe	 	 	130,083	 	 	49,545	 	 	14,451	 	 	—	 	 	1,216	 	 	64,871	 	
 	Latin America	 	 	225,002	 	 	75,980	 	 	20,508	 	 	—	 	 	1,791	 	 	126,723	 	
 	Exploration	 	 	—	 	 	—	 	 	—	 	 	33,431	 	 	(166	)	 	(33,265	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 		 	$	932,495	 	$	434,941	 	$	130,863	 	$	57,394	 	$	4,508	 	$	304,789	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Segment income	 	$	304,789	 	
 	Corporate and Other:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	    Interest and sundry income	 	 	246	 	
 	    Impairment loss on available-for-sale securities	 	 	(11,581	)	
 	    Loss on sale of available-for-sale securities	 	 	(6,731	)	
 	    Loss on derivative financial instruments	 	 	(3,426	)	
 	    General and administrative	 	 	(65,943	)	
 	    Provincial capital tax	 	 	(4,001	)	
 	    Interest expense	 	 	(28,667	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Income before income and mining taxes	 	$	184,686	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
26

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
11.   SEGMENTED INFORMATION (Continued)

																					
 	Six Months Ended June 30, 2011 	 	Revenues
from
Mining
Operations	 	Production
Costs	 	Amortization of
Property, Plant
and Mine
Development	 	Exploration and
Corporate
Development	 	Foreign
Currency
Translation
Loss	 	Segment
Income
(Loss)	 	
 	Canada	 	$	575,714	 	$	287,391	 	$	92,971	 	$	—	 	$	11,688	 	$	183,664	 	
 	Europe	 	 	101,226	 	 	54,692	 	 	12,777	 	 	—	 	 	3,787	 	 	29,970	 	
 	Latin America	 	 	168,819	 	 	69,238	 	 	15,416	 	 	—	 	 	669	 	 	83,496	 	
 	Exploration	 	 	—	 	 	—	 	 	—	 	 	34,267	 	 	634	 	 	(34,901	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 		 	$	845,759	 	$	411,321	 	$	121,164	 	$	34,267	 	$	16,778	 	$	262,229	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Segment income	 	$	262,229	 	
 	Corporate and Other:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	    Interest and sundry income	 	 	24	 	
 	    Gain on sale of available-for-sale securities	 	 	4,814	 	
 	    Gain on derivative financial instruments	 	 	2,332	 	
 	    General and administrative	 	 	(59,274	)	
 	    Interest expense	 	 	(27,997	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Income before income and mining taxes	 	$	182,128	 	

									
 	 	 	Total Assets as at	 	
 	 	 	June 30, 2012	 	December 31, 2011	 	
 	Canada	 	$	3,224,312	 	$	3,205,158	 	
 	Europe	 	 	813,156	 	 	771,714	 	
 	Latin America	 	 	984,590	 	 	1,020,078	 	
 	Exploration	 	 	45,492	 	 	37,312	 	
 	 	 	 	 	 	 	
 		 	$	5,067,550	 	$	5,034,262	 	
 	 	 	 	 	 	 	
12.   ENVIRONMENTAL REMEDIATION LIABILITY
Due to the suspension of mining operations at the Goldex mine on October 19, 2011, an environmental remediation liability was recognized. During the three months ended June 30, 2012, the Company incurred $6.1 million in remediation costs that were applied against the environmental remediation liability recognized in 2011. As at June 30, 2012, the remaining Goldex mine environmental remediation liability was $33.0 million and was classified as a current liability. The Company's other non-Goldex mine related accrued reclamation and closure costs are long-term in nature and thus no portion of these costs has been classified as current liabilities. 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. The Goldex mine is part of the "Canada" segment as shown in Note 11.
13.   ACQUISITIONS
On November 18, 2011, the Company acquired 94.77% of the outstanding shares of Grayd Resource Corporation ("Grayd"), on a fully-diluted basis, by way of a take-over bid. The November 18, 2011 purchase price of $222.1 million was comprised of $166.0 million in cash and 1,250,477 newly issued Agnico-Eagle shares. The acquisition was accounted for as a business combination and goodwill of $29.2 million was recognized on the Company's consolidated balance sheets.
On January 23, 2012, the Company acquired the remaining outstanding shares of Grayd it did not already own, pursuant to a previously announced compulsory acquisition carried out under the provisions of the Business Corporations Act (British Columbia). The January 23, 2012 purchase price of $11.8 million was comprised of $9.3 million in cash and 68,941 newly issued Agnico-Eagle shares valued at $2.4 million. The non-controlling interest as reported on the December 31, 2011 consolidated balance sheets of the Company has now been eliminated as a result of this transaction.
27

AGNICO-EAGLE MINES LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2012
14.   GENERAL AND ADMINISTRATIVE
Due to a kitchen fire at the Meadowbank mine in March 2011, the Company recognized a loss on disposal of the kitchen of $6.9 million, incurred related costs of $7.4 million, and recognized an insurance receivable for $11.2 million. The difference of $3.1 million was recognized in the General and administrative line item of the interim consolidated statements of income and comprehensive income during the three months ended March 31, 2011.
During the subsequent months of 2011, the Company received $2.4 million of insurance proceeds and had a remaining insurance receivable of $8.8 million as at December 31, 2011 within the Other current assets line item of the interim consolidated balance sheets. During the first six months of 2012, the Company received $2.3 million of insurance proceeds and had a remaining insurance receivable of $6.5 million as at June 30, 2012.
15.   SUBSEQUENT EVENTS
On July 20, 2012, the Company amended and restated its Credit Facility. The total amount available under the Credit Facility remains unchanged at $1.2 billion; however, the maturity date was extended from June 22, 2016 to June 22, 2017. Pricing terms were amended to reflect improved current market conditions.
On July 24, 2012, the Company closed a private placement consisting of $200.0 million of guaranteed senior unsecured notes due in 2022 and 2024 (the "2012 Notes") with a weighted average maturity of 11.0 years and weighted average yield of 4.95%. The 2012 Notes contain covenants that restrict, among other things, the ability of the Company to amalgamate or otherwise transfer its assets, sell material assets and carry on a business other than one related to the mining business and the ability of material and certain other subsidiaries of the Company to incur indebtedness. The 2012 Notes also require the Company to maintain the same financial ratios and same minimum tangible net worth as under the Credit Facility and 2010 Notes. The 2012 Notes are permissible debt under the Credit Facility.
On July 25, 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 September 17, 2012 to holders of record of the common shares of the Company on September 4, 2012.
16.   SECURITIES CLASS ACTION LAWSUITS
On November 7 and 22, 2011, the Company and certain current and former officers who also are, or were, directors were named as defendants in two putative class action lawsuits, styled Jerome Stone v. Agnico-Eagle Mines Ltd., et al. , and Chris Hastings v. Agnico-Eagle Mines Limited, et al. , which were filed in the United States District Court for the Southern District of New York. On February 6, 2012, the court entered an order consolidating the actions under the caption In re Agnico-Eagle Mines Ltd. Securities Litigation and appointed a lead plaintiff (not one of the plaintiffs who filed the original complaints). On April 6, 2012, the lead plaintiff served its Consolidated Complaint (the "Complaint"). The Complaint names the Company, its current chief executive officer and its former president and chief operating officer as defendants and purports to be brought on behalf of all persons and entities who purchased or otherwise acquired the Company's publicly traded securities in the United States or on a U.S. exchange during the period July 28, 2010 through October 19, 2011 (the "Class Period"). The Complaint alleges, among other things, that defendants violated U.S. securities laws by misrepresenting the Company's gold reserves and the status, ability to operate and projected production of its Goldex mine. The Complaint seeks, among other things, (i) a determination that the action is a proper class action and (ii) an award of unspecified damages, attorneys' fees and expenses. On June 6, 2012, the Company and the other defendants filed a motion, pursuant to the Private Securities Litigation Reform Act and Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the Consolidated Complaint, for failure to state a claim upon which relief could be granted. The plaintiff has not yet responded to the motion.
On March 8, 2012 and April 10, 2012 a Notice of Action and Statement of Claim under the laws of the Province of Ontario (collectively, the "Ontario Claim") were issued by William Leslie AFA Livforsakringsaktiebolag and certain other entities against the Company and certain current and former officers, two of whom also are, or were, directors. The Ontario Claim, which has now been served, alleges that the Company's public disclosure concerning water flow issues at its Goldex mine was misleading. The Ontario Claim was issued by the plaintiffs on behalf of all persons and entities who acquired securities of the Company during the period March 26, 2010 to October 19, 2011. The plaintiffs seek, among other things, damages of $250.0 million and to certify the Ontario Claim as a class action. The Company intends to vigorously defend the Ontario Claim.
On March 28, 2012, a Motion for Leave to Institute a Class Action and for the Appointment of a Representative Plaintiff under the laws of the Province of Quebec was issued against the Company and certain current and former officers, two of whom also are, or were, directors in the Quebec Superior Court (the "Quebec Action"). The Quebec Action, which has now been served, is on behalf of all persons and entities who acquired securities of the Company between March 26, 2010 and October 19, 2011. The plaintiffs in the Quebec Action seek damages arising as a result of allegedly misleading disclosure by the Company concerning its operations at the Goldex mine. The Company intends to vigorously defend the action.
17.   COMPARATIVE FIGURES
Certain figures in the comparative consolidated financial statements have been reclassified from statements previously presented to conform to the presentation of the 2012 interim consolidated financial statements.
28

QuickLinks
Second Quarter Report 2012
 AGNICO-EAGLE MINES LIMITED MANAGEMENT'S DISCUSSION AND ANALYSIS (Prepared in accordance with United States GAAP) for the three months ended June 30, 2012
 AGNICO-EAGLE MINES LIMITED SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS (thousands of United States dollars, except where noted)
AGNICO-EAGLE MINES LIMITED SUMMARIZED QUARTERLY DATA (thousands of United States dollars, except where noted)
 AGNICO-EAGLE MINES LIMITED CONSOLIDATED BALANCE SHEETS (thousands of United States dollars, US GAAP basis) (Unaudited)
AGNICO-EAGLE MINES LIMITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (thousands of United States dollars, except share and per share amounts, US GAAP basis) (Unaudited)
 AGNICO-EAGLE MINES LIMITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (thousands of United States dollars, US GAAP basis) (Unaudited)
AGNICO-EAGLE MINES LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (thousands of United States dollars, US GAAP basis) (Unaudited)
 AGNICO-EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) (Unaudited) June 30, 2012