TORONTO - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ('Agnico Eagle' or the 'Company') today reported quarterly net income of $114.5 million, or net income of $0.47 per share, for the third quarter of 2021.
This result includes non-cash mark-to-market losses on warrants of $15.6 million ($0.06 per share), derivative losses on financial instruments of $10.7 million ($0.05 per share), foreign currency translation losses on deferred tax liabilities and non-recurring tax adjustments of $8.8 million ($0.04 per share), non-cash foreign currency translation gains of $6.5 million ($0.03 per share) and various other adjustment losses of $2.3 million ($0.01 per share). Excluding these items would result in adjusted net income1 of $145.4 million or $0.60 per share for the third quarter of 2021. For the third quarter of 2020, the Company reported net income of $222.7 million or net income of $0.92 per share.
Included in the third quarter of 2021 net income, and not adjusted above, is a non-cash stock option expense of $3.9 million ($0.02 per share).
In the first nine months of 2021, the Company reported net income of $440.2 million, or net income of $1.81 per share. This compares with the first nine months of 2020, when net income was $306.4 million, or net income of $1.27 per share.
The decrease in net income in the third quarter of 2021, compared to the prior-year period, is primarily due to lower operating margins2 (lower average realized metal prices and higher production costs, partially offset by higher sales volumes), unrealized losses for non-cash items related to mark-to-market adjustments on financial instruments, higher amortization of property, plant and mine development from higher production volumes and the contribution of the Hope Bay mine and higher exploration expenses, partially offset by foreign exchange gains.
The increase in net income in the first nine months of 2021, compared to the prior-year period, is primarily due to higher operating margins (from higher sales volumes and higher average realized metal prices), partially offset by unrealized losses for non-cash items related to mark-to-market adjustments on financial instruments owned by the Company, higher amortization of property, plant and mine development from higher production volumes and the contribution of the Hope Bay mine, higher exploration expenses and higher income and mining taxes driven by higher operating margins.
In the third quarter of 2021, cash provided by operating activities was $291.0 million ($413.6 million before changes in non-cash components of working capital), compared to the third quarter of 2020 when cash provided by operating activities was $462.5 million ($434.4 million before changes in non-cash components of working capital).
In the first nine months of 2021, cash provided by operating activities was $1,054.3 million ($1,261.0 million before changes in non-cash components of working capital), compared to the first nine months of 2020 when cash provided by operating activities was $788.5 million ($824.3 million before changes in non-cash components of working capital).
The decrease in cash provided by operating activities (before changes in non-cash components of working capital) in the third quarter of 2021, compared to the prior-year period, is primarily due to a decrease in mine operating margins that resulted from the reasons described above.
The increase in cash provided by operating activities in the first nine months of 2021, compared to the prior-year period, is primarily due to an increase in operating margins that resulted from the reasons described above, partially offset by higher cash taxes related to the higher mine operating margins and payments for taxes related to the 2020 tax year in the first quarter of 2021.
'Another strong quarterly operating performance, including record gold production, continues to demonstrate our ability to optimize our assets and steadily grow output over the next several years. During the quarter, the Abitibi and Meliadine mines continued to be key drivers to the Company's ongoing operational success,' said Sean Boyd, Agnico Eagle's Chief Executive Officer. 'These strong production platforms will be integral components in the proposed merger of equals with Kirkland Lake Gold, which was announced late in the quarter. The combination is expected to unlock additional value through the realization of significant operational synergies while creating a low risk global gold mining leader with growing production and gold reserves, increased operating cash flow and the financial resources and long-life assets to maintain a high-quality sustainable business while increasing capital distributions to shareholders,' added Mr. Boyd.
Agnico Eagle and Kirkland Lake Gold Merger of Equals
On September 28, 2021, Agnico Eagle and Kirkland Lake Gold Ltd. (TSX:KL, NYSE:KL, ASX:KLA) ('Kirkland Lake Gold') announced that they entered into an agreement (the 'Merger Agreement') pursuant to which Agnico Eagle will acquire all of the common shares of Kirkland Lake Gold in a merger of equals (the 'Merger'), with the combined company to continue under the name 'Agnico Eagle Mines Limited'.
The Merger will establish the new Agnico Eagle as a high-quality senior producer with the lowest all-in sustaining costs, highest EBITDA margin6 and lowest-risk portfolio7 of operating mines among its Senior Gold Peers8, together with industry-leading best practices in key areas of ESG.
Pursuant to the Merger Agreement, Kirkland Lake Gold shareholders will receive 0.7935 of an Agnico Eagle common share for each Kirkland Lake Gold common share held. Upon closing, existing Agnico Eagle and Kirkland Lake Gold shareholders will own approximately 54% and 46% of the combined company, respectively.
Canadian Competition Act approval was received on October 4, 2021. Additionally, Agnico Eagle and Kirkland Lake Gold have received relief from the Australian Securities and Investments Commission from compliance with the prospectus and secondary sale requirements of Part 6D.2 and Part 6D.3 of the Australian Corporations Act.
The joint management information circular is expected to be mailed on November 3, 2021 and meetings of Agnico Eagle shareholders and Kirkland Lake Gold shareholders have each been scheduled for November 26, 2021. The Merger is expected to close in December 2021 or in the first quarter of 2022, subject to satisfaction of the conditions under the Merger Agreement.
Unless otherwise stated in this News Release, the forward looking information contained herein, including forward looking information regarding the Company's production and costs does not include the effect of the Merger with Kirkland Lake Gold.
Contact:
Tel: +1 (416) 947-1212
Fax: +1 (416) 367-4681
AGNICO EAGLE MINES LIMITED 
