CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Thousands | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 |
Current | ||
Cash and cash equivalents | $160,280 | $68,382 |
Short-term investments | 3,313 | |
Restricted cash (note 14) | 30,999 | |
Trade receivables (note 1) | 93,571 | 45,640 |
Inventories: | ||
Ore stockpiles | 41,286 | 24,869 |
Concentrates and dore bars | 31,579 | 5,013 |
Supplies | 100,885 | 40,014 |
Available-for-sale securities (note 2(a)) | 111,967 | 70,383 |
Other current assets (note 2(a)) | 61,159 | 65,994 |
Total current assets | 604,040 | 351,294 |
Other assets (note 2(b)) | 33,641 | 8,383 |
Future income and mining tax assets (note 8) | 27,878 | 21,647 |
Property, plant and mine development, net (note 3) | 3,581,798 | 2,997,500 |
TOTAL ASSETS | 4,247,357 | 3,378,824 |
Current: | ||
Accounts payable and accrued liabilities (note 10) | 155,432 | 139,795 |
Dividends payable | 28,199 | 28,304 |
Income taxes payable | 4,501 | 4,814 |
Interest payable | 1,666 | 146 |
Fair value of derivative financial instruments (note 15) | 662 | 12,823 |
Total current liabilities | 190,460 | 185,882 |
Bank debt (note 4) | 715,000 | 200,000 |
Reclamation provision and other liabilities (note 5) | 96,255 | 71,770 |
Future income and mining tax liabilities (note 8) | 493,881 | 403,416 |
SHAREHOLDERS' EQUITY | ||
Common Shares (note 6(a)) | 2,378,759 | 2,299,747 |
Stock options (note 7(a)) | 65,771 | 41,052 |
Warrants (notes 6(c)) | 24,858 | 24,858 |
Contributed surplus | 15,166 | 15,166 |
Retained earnings | 216,158 | 157,541 |
Accumulated other comprehensive income (loss) (note 6(e)) | 51,049 | (20,608) |
Total shareholders' equity | 2,751,761 | 2,517,756 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $4,247,357 | $3,378,824 |
Contingencies and commitments (notes 5, 12 and 13(b)) |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) | |||
In Thousands, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
REVENUES: | |||
Revenues from mining operations (note 1) | $613,762 | $368,938 | $432,205 |
Interest and sundry income | 16,172 | 11,721 | 25,142 |
Gain on sale of available-for-sale securities (note 2(a)) | 10,142 | 25,626 | 4,088 |
TOTAL REVENUES | 640,076 | 406,285 | 461,435 |
COSTS AND EXPENSES | |||
Production | 306,318 | 186,862 | 166,104 |
Exploration and corporate development | 36,279 | 34,704 | 25,507 |
Amortization of plant and mine development | 72,461 | 36,133 | 27,757 |
General and administrative | 63,687 | 47,187 | 38,167 |
Write-down of available-for-sale securities | 74,812 | ||
Loss on derivative financial instruments | 5,829 | ||
Provincial capital tax | 5,014 | 5,332 | 3,202 |
Interest (note 4) | 8,448 | 2,952 | 3,294 |
Foreign currency translation loss (gain) | 39,831 | (77,688) | 32,297 |
Income before income, mining and federal capital taxes | 108,038 | 95,991 | 159,278 |
Income and mining tax (note 8) | 21,500 | 22,824 | 19,933 |
Net income for the year | 86,538 | 73,167 | 139,345 |
Net income per share - basic (note 6(f)) (in dollars per share) | 0.55 | 0.51 | 1.05 |
Net income per share - diluted (note 6(f)) (in dollars per share) | 0.55 | 0.5 | 1.04 |
Comprehensive income: | |||
Net income for the year | 86,538 | 73,167 | 139,345 |
Other comprehensive income (loss): | |||
Unrealized gain (loss) on hedging activities | 16,287 | (8,888) | |
Unrealized gain (loss) on available-for-sale securities | 76,037 | (911) | (5,436) |
Adjustments for derivative instruments maturing during the year | (7,399) | 1,653 | |
Adjustments for realized loss (gain) on available-for-sale securities due to dispositions and write-downs during the year | (10,142) | 8,997 | (1,918) |
Change in unrealized gain (loss) on pension liability (note 5(c)) | (727) | 1,822 | (16) |
Tax effect of other comprehensive income items | (2,399) | 2,084 | 4 |
Other comprehensive income (loss) for the year | 71,657 | 3,104 | (5,713) |
Comprehensive income for the year | $158,195 | $76,271 | $133,632 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | |||||||
In Thousands, except Share data | Common Stock
| Stock Options Outstanding
| Warrants
| Contributed Surplus
| Retained Earnings
| Accumulated Other Comprehensive Loss
| Total
|
Balance at Dec. 31, 2006 | $1,230,654 | $5,884 | $15,723 | $15,128 | $3,015 | ($17,999) | |
Balance (in shares) at Dec. 31, 2006 | 121,025,635 | ||||||
Changes in Shareholders' Equity during the period | |||||||
Shares issued under Employee Stock Option Plan (note 7(a)) | 10,232 | ||||||
Shares issued under Employee Stock Option Plan (note 7(a)) (in shares) | 536,116 | ||||||
Stock options | 17,689 | ||||||
Shares issued under the Incentive Share Purchase Plan (note 7(b)) | 7,100 | ||||||
Shares issued under the Incentive Share Purchase Plan (note 7(b)) (in shares) | 167,378 | ||||||
Shares issued for purchase of Cumberland Resources Ltd. (note 9) | 536,556 | ||||||
Shares issued for purchase of Cumberland Resources Ltd. (note 9) (in shares) | 13,768,510 | ||||||
Shares issued under the Company's dividend reinvestment plan | 812 | ||||||
Shares issued under the Company's dividend reinvestment plan (in shares) | 32,550 | ||||||
Shares issued on exercise of warrants | 146,313 | (15,723) | 38 | ||||
Shares issued on exercise of warrants (in shares) | 6,873,190 | ||||||
Net income for the year | 139,345 | 139,345 | |||||
Dividends declared ($0.18 per share) (note 6(a)) | (25,633) | ||||||
Future tax asset adjustment upon the adoption of FIN 48 (note 8) | (4,487) | ||||||
Other comprehensive income (loss) for the year | (5,713) | (5,713) | |||||
Balance at Dec. 31, 2007 | 1,931,667 | 23,573 | 15,166 | 112,240 | (23,712) | ||
Balance (in shares) at Dec. 31, 2007 | 142,403,379 | ||||||
Changes in Shareholders' Equity during the period | |||||||
Shares issued under Employee Stock Option Plan (note 7(a)) | 41,392 | ||||||
Shares issued under Employee Stock Option Plan (note 7(a)) (in shares) | 1,340,484 | ||||||
Stock options | 17,479 | ||||||
Shares issued under the Incentive Share Purchase Plan (note 7(b)) | 9,545 | ||||||
Shares issued under the Incentive Share Purchase Plan (note 7(b)) (in shares) | 154,998 | ||||||
Shares issued under flow-through share private placement (note 6(b)) | 22,042 | ||||||
Shares issued under flow-through share private placement (note 6(b)) (in shares) | 779,250 | ||||||
Shares issued under the Company's dividend reinvestment plan | 2,210 | ||||||
Shares issued under the Company's dividend reinvestment plan (in shares) | 30,807 | ||||||
Shares issued under public offering (note 6(d)) | 34,200 | ||||||
Shares issued under public offering (note 6(d)) (in shares) | 900,000 | ||||||
Shares issued under private placement of units (note 6(c)) | 258,691 | 24,858 | |||||
Shares issued under private placement of units (note 6(c)) (in shares) | 9,200,000 | ||||||
Net income for the year | 73,167 | 73,167 | |||||
Dividends declared ($0.18 per share) (note 6(a)) | (27,866) | ||||||
Other comprehensive income (loss) for the year | 3,104 | 3,104 | |||||
Balance at Dec. 31, 2008 | 2,299,747 | 41,052 | 24,858 | 15,166 | 157,541 | (20,608) | 2,517,756 |
Balance (in shares) at Dec. 31, 2008 | 154,808,918 | ||||||
Changes in Shareholders' Equity during the period | |||||||
Shares issued under Employee Stock Option Plan (note 7(a)) | 48,313 | ||||||
Shares issued under Employee Stock Option Plan (note 7(a)) (in shares) | 1,238,000 | ||||||
Stock options | 24,719 | ||||||
Shares issued under the Incentive Share Purchase Plan (note 7(b)) | 11,290 | ||||||
Shares issued under the Incentive Share Purchase Plan (note 7(b)) (in shares) | 196,649 | ||||||
Shares issued under flow-through share private placement (note 6(b)) | 19,153 | ||||||
Shares issued under flow-through share private placement (note 6(b)) (in shares) | 358,900 | ||||||
Shares issued under the Company's dividend reinvestment plan | 912 | ||||||
Shares issued under the Company's dividend reinvestment plan (in shares) | 18,764 | ||||||
Shares issued for purchase of mining property (note 6(c)) | 894 | ||||||
Shares issued for purchase of mining property (note 6(c)) (in shares) | 33,825 | ||||||
Net income for the year | 86,538 | 86,538 | |||||
Dividends declared ($0.18 per share) (note 6(a)) | (27,921) | ||||||
Other comprehensive income (loss) for the year | 71,657 | 71,657 | |||||
Restricted share unit plan (note 7(c)) | (1,550) | ||||||
Restricted share unit plan (note 7(c)) (in shares) | (29,882) | ||||||
Balance at Dec. 31, 2009 | $2,378,759 | $65,771 | $24,858 | $15,166 | $216,158 | $51,049 | $2,751,761 |
Balance (in shares) at Dec. 31, 2009 | 156,625,174 |
1_CONSOLIDATED STATEMENTS OF ST
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | |||
12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | |||
Dividends declared, per share | 0.18 | 0.18 | 0.18 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | |||
In Thousands | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Operating activities | |||
Net income for the year | $86,538 | $73,167 | $139,345 |
Add (deduct) items not affecting cash: | |||
Amortization of plant and mine development | 72,461 | 36,133 | 27,757 |
Future income and mining taxes | 20,309 | 16,681 | 16,380 |
Loss (gain) on sale of securities, net | (20,677) | 49,186 | (4,088) |
Stock-based compensation | 28,753 | 16,061 | 12,155 |
Foreign currency translation loss (gain) | 39,831 | (77,688) | 32,297 |
Other | 5,321 | 4,642 | 14,921 |
Changes in non-cash working capital balances | |||
Trade receivables | (47,930) | 33,779 | 5,568 |
Income taxes (payable)/recoverable | (313) | 4,814 | (14,231) |
Inventories | (90,772) | (45,904) | (1,187) |
Other current assets | 4,834 | (24,334) | (39,055) |
Accounts payable and accrued liabilities | 28,552 | 34,492 | 55,661 |
Prepaid royalty | (13,321) | ||
Interest payable | 1,520 | 146 | |
Cash provided by operating activities | 115,106 | 121,175 | 245,523 |
Investing activities | |||
Additions to property, plant and mine development | (657,175) | (908,853) | (523,793) |
Purchase of gold derivatives (note 9) | (15,875) | ||
Cash acquired on acquisition of Cumberland Resources Ltd. net of transaction costs (note 9) | 84,207 | ||
Recoverable value-added tax on acquisition of Pinos Altos property | 9,750 | ||
Sale (purchase) of Stornoway Diamond Corporation debentures | 10,720 | (8,519) | |
Decrease (increase) in short-term investments | (3,313) | 78,770 | 91,272 |
Net proceeds on available-for-sale securities | 48,258 | 43,583 | 5,393 |
Purchase of available-for-sale securities | (6,380) | (113,225) | (13,079) |
Decrease (increase) in restricted cash | 30,999 | (28,544) | (2,455) |
Cash used in investing activities | (587,611) | (917,549) | (373,099) |
Financing activities | |||
Dividends paid | (27,132) | (23,779) | (13,406) |
Repayment of capital lease obligations | (13,177) | (16,178) | (3,418) |
Sale-leaseback financing | 21,389 | ||
Proceeds from bank debt | 625,000 | 300,000 | |
Repayment of bank debt | (110,000) | (100,000) | |
Credit facility financing costs | (4,784) | (3,094) | |
Common shares issued | 68,522 | 376,265 | 144,138 |
Warrants issued | 24,858 | ||
Cash provided by financing activities | 559,818 | 558,072 | 127,314 |
Effect of exchange rate changes on cash and cash equivalents | 4,585 | (8,110) | 26,481 |
Net increase (decrease) in cash and cash equivalents during the year | 91,898 | (246,412) | 26,219 |
Cash and cash equivalents, beginning of year | 68,382 | 314,794 | 288,575 |
Cash and cash equivalents, end of year | 160,280 | 68,382 | 314,794 |
Supplemental cash flow information: | |||
Interest paid during the year | 17,189 | 6,345 | 2,406 |
Income, mining and capital taxes paid during the year | $8,792 | $3,802 | $22,138 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These consolidated financial statements of Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") are expressed in thousands of UnitedStates dollars ("USdollars", "US$" or "$"), except where noted, and have been prepared in accordance with UnitedStates generally accepted accounting principles ("USGAAP"). Since a precise determination of assets and liabilities depends on future events, the preparation of consolidated financial statements for a period necessarily involves the use of estimates and approximations. Actual results may differ from such estimates and approximations. The consolidated financial statements have, in management's opinion, been prepared within reasonable limits of materiality and within the framework of the significant accounting policies referred tobelow. Basis of consolidation These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and entities in which it has a controlling financial interest after the elimination of intercompany accounts and transactions. The Company has a controlling financial interest if it owns a majority of the outstanding voting common stock or has significant control over an entity through contractual or economic interests of which the Company is the primary beneficiary. Cash and cash equivalents Cash and cash equivalents include cash on hand and short-term investments in money market instruments with remaining maturities of three months or less at the date of purchase. Short-term investments are designated as held to maturity for accounting purposes and are carried at amortized cost, which approximates market value given the short-term nature of these investments. Agnico-Eagle places its cash and cash equivalents and short-term investments in high quality securities issued by government agencies, financial institutions and major corporations and limits the amount of credit exposure by diversifying itsholdings. Inventories Inventories consist of ore stockpiles, concentrates, gold dore bars and supplies. Amounts are removed from inventory based on average cost. The current portion of stockpiles, ore on leach pads and inventories is determined based on the expected amounts to be processed within the next 12months. Stockpiles, ore on leach pads and inventories not expected to be processed within the next 12months are classified as long-term. Stockpiles Stockpiles consist of coarse ore that has been mined and hoisted from underground or delivered from the open pit that is available for further processing and in-stope ore inventory in the form of drilled and blasted stopes ready to be mucked and hoisted to the surface. The stockpiles are measured by estimating the tonnage, contained ounces (based on assays) and recovery percentages (based on actual recovery rates achieved for processing similar ore). Specific tonnages are verified and compared to original estimates once the stockpile is milled. The ore stockpile is valued at the lower of net realizable value and mining costs incurred up to the point of stockpiling the ore. The net realizable value of stockpiled ore is asse |
TRADE RECEIVABLES AND REVENUES
TRADE RECEIVABLES AND REVENUES FROM MINING OPERATIONS | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
TRADE RECEIVABLES AND REVENUES FROM MINING OPERATIONS | 1.TRADE RECEIVABLES AND REVENUES FROM MINING OPERATIONS Agnico-Eagle is a gold mining company with operations in Canada, Finland, Mexico and an advanced-stage construction project in northern Canada. The Company earns a significant proportion of its sales revenues from the production and sale of gold in both dore bars and concentrate form. The remainder of revenue and cash flow is generated by the production and sale of byproduct metals. The revenue from byproduct metals are mainly generated by production at the LaRonde Mine in Canada (silver, zinc, copper and lead) and the Pinos Altos Mine in Mexico (silver). Sales revenues are generated from operations in Canada, Finland, and Mexico. The cash flow and profitability of the Company's operations are significantly affected by the market price of gold, and to a lesser extent, silver, zinc, copper, and lead. The prices of these metals can fluctuate widely and are affected by numerous factors beyond the Company's control. As gold can be sold through numerous gold market traders worldwide, the Company is not economically dependent on a limited number of customers for the sale of itsproduct. Trade receivables are recognized once the transfer of ownership for the metals sold has occurred and reflect the amounts owing to the Company in respect of its sales of bullion or concentrates to third parties prior to the satisfaction in full of payment obligations of the thirdparties. 2009 2008 Bullion awaiting settlement $ 3,488 $ Concentrates awaiting settlement 90,083 45,640 $ 93,571 $ 45,640 2009 2008 2007 Revenues from mining operations (thousands): Gold $ 474,875 $ 227,576 $ 171,537 Silver 59,155 59,398 70,028 Zinc 57,034 54,364 156,340 Copper 22,571 27,600 34,300 Lead 127 $ 613,762 $ 368,938 $ 432,205 In 2009, precious metals accounted for 87% of Agnico-Eagle's revenues from mining operations (200878%; 200756%). The remaining revenues from mining operations consisted of net byproduct metals revenues. In 2009, these net byproduct revenues as a percentage of total revenues from mining operations were 9% from zinc (200815%; 200736%) and 4% from copper (20087%; 20078%). |
OTHER ASSETS
OTHER ASSETS | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
OTHER ASSETS | 2.OTHER ASSETS (a) Other current assets 2009 2008 Federal, provincial and other sales taxes receivable $ 37,847 $ 52,669 Interest receivable 163 154 Prepaid expenses 4,797 3,880 Employee loans receivable 3,640 2,530 Government refundables for local community improvements 1,764 572 Prepaid royalty 5,377 Other 7,571 6,189 $ 61,159 $ 65,994 In 2009, the Company realized $41.0million (2008$40.5million; 2007$5.4million) in proceeds and recorded a gain of $10.1million (2008$25.6million; 2007$4.1million) in the consolidated statements of income on the sale of 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 determined asfollows: 2009 2008 Cost $ 44,470 $ 68,691 Unrealized gains 67,508 1,692 Unrealized losses (11 ) Estimated fair value of available-for-sale securities $ 111,967 $ 70,383 (b) Other assets 2009 2008 Deferred financing costs, less accumulated amortization of $2,732 (2008$1,192) $ 7,516 $ 5,126 Non-current ore in stockpile(i) 11,684 Prepaid royalty(ii) 13,321 Finnish government grants 2,981 Other 1,120 276 $ 33,641 $ 8,383 (i) Due to the structure of the Goldex Mine ore body, a significant amount of drilling and blasting is incurred in the early years of its mine life resulting in a long-term stockpile. (ii) The prepaid royalty relates to the Pinos Altos Mine in Mexico. |
PROPERTY, PLANT AND MINE DEVELO
PROPERTY, PLANT AND MINE DEVELOPMENT | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
PROPERTY, PLANT AND MINE DEVELOPMENT | 3.PROPERTY, PLANT AND MINE DEVELOPMENT 2009 2008 Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Mining properties $ 1,221,646 $ 27,865 $ 1,193,781 $ 1,192,079 $ 24,469 $ 1,167,610 Plant and equipment 1,389,081 197,794 1,191,287 541,081 135,794 405,287 Mine development costs 445,628 111,674 333,954 288,923 94,465 194,458 Construction in progress: Goldex Mine LaRonde Mine extension 121,102 121,102 83,340 83,340 Pinos Altos Mine 212,751 212,751 Meadowbank Mine 741,674 741,674 479,392 479,392 Kittila Mine 302,954 302,954 Lapa Mine 151,708 151,708 $ 3,919,131 $ 337,333 $ 3,581,798 $ 3,252,228 $ 254,728 $ 2,997,500 Geographic Information Net Book Value 2009 Net Book Value 2008 Canada $ 2,592,704 $ 2,217,634 Europe 568,620 494,574 Latin America 418,214 283,032 U.S.A 2,260 2,260 Total $ 3,581,798 $ 2,997,500 In 2009, Agnico-Eagle capitalized $0.4million of costs (2008$0.8million) and recognized $0.8million of amortization expense (2008$0.6million) related to computer software. The unamortized capitalized cost for computer software at the end of 2009 was $5.2million (2008$5.6million). The unamortized capitalized cost for leasehold improvements at the end of 2009 was $2.5million (2008$2.7million), which is being amortized straight-line over the life of the lease plus one renewalperiod. The amortization of assets recorded under capital leases is included in the amortization of property, plant and mine-development component of the consolidated statements of income. |
BANK DEBT
BANK DEBT | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
BANK DEBT | 4.BANK DEBT The Company entered into a credit agreement on January10, 2008 with a group of financial institutions relating to a new $300million unsecured revolving credit facility (the"First Credit Facility"); the Company's previous $300million secured revolving credit facility was terminated. The First Credit Facility matures on January10, 2013, however, the Company, with the consent of lenders representing 662/3% of the aggregate commitments under the facility, has the option to extend the term of this facility for additional one-yearterms. On September4, 2008, the Company entered into a further credit agreement with a separate group of financial institutions relating to an additional $300million unsecured revolving credit facility (the"Second Credit Facility" and together with the First Credit Facility, the "Credit Facilities"). The Second Credit Facility was scheduled to mature on September4,2010. On June15, 2009, the Company amended and restated the Credit Facilities. The amounts available under the Second Credit Facility was increased by $300million to $600million and the maturity date extended to June2012. Payment and performance of the Company's obligations under each of the Credit Facilities are guaranteed by certain material subsidiaries of the Company. The restrictive covenants and events of default under each of the Credit Facilities are identical. Each of the Credit Facilities 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 certain financial ratios as well as a minimum tangible net worth. In addition, each of the Credit Facilities requires the Company to utilize funds available under the Credit Facilities on a prorata basis, subject to a permitted utilization differential threshold and exclusion of advances under the First Credit Facility that are letters of credit or swing line advances. At December31, 2009, the Credit Facilities were drawn down by $715million (2008$200million). These drawdowns, together with outstanding letters of credit under the First Credit Facility, decrease the amounts available under the Credit Facilities such that $162.5million was available for future drawdowns at December31,2009. In addition, on June2, 2009, Agnico-Eagle executed an unsecured C$95million financial security issuance agreement with Export Development Canada. This agreement matures June2014 and will be used to provide letters of credit for environmental obligations or in relation to license or permit bonds relating to the Meadowbank Mine. As at December31, 2009, outstanding letters of credit drawn against this agreement totalled C$60.4million. For the year ended December31, 2009, interest expense was $8.4million (2008$3.0million; 2007$3.3million) and total cash interest payments were $17.2million (2008$6.3million; 2007$2.4million). In 2009, cash interest on the Credit Facilities was $14.0million (2008$4.6million; 2007nil) and cash standby fees on the Credit Facilities were $ |
RECLAMATION PROVISION AND OTHER
RECLAMATION PROVISION AND OTHER LIABILITIES | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
RECLAMATION PROVISION AND OTHER LIABILITIES | 5.RECLAMATION PROVISION AND OTHER LIABILITIES Reclamation provision and other liabilities consist of the following: 2009 2008 Reclamation and closure costs (note5(a)) $ 62,847 $ 52,125 Long-term portion of capital lease obligations (note13a) 21,981 12,079 Pension benefits (note5(c)) 8,109 5,153 Goldex Mine government grant and other (note5(b)) 3,318 2,413 $ 96,255 $ 71,770 (a) Reclamation and closure costs Reclamation estimates are based on current legislation, third party estimates and feasibility study calculations. All of the accrued reclamation and closure costs are long-term in nature and thus no portion of these costs has been reclassified to current liabilities. The Company does not currently have assets that are restricted for the purposes of settling these obligations. The following table reconciles the beginning and ending carrying amounts of the asset retirement obligations. 2009 2008 Asset retirement obligations, beginning of year $ 52,125 $ 44,690 Current year additions and changes in estimate 13,698 Current year accretion 2,916 1,363 Foreign exchange revaluation 7,806 (7,626 ) Asset retirement obligations, end of year $ 62,847 $ 52,125 (b) Goldex Mine grant The Company has received funds (the"Grant") from the Quebec government in respect of the construction of the Goldex Mine. The Company has agreed to repay a portion of the Grant to the Quebec government, to a maximum amount of 50% of the Grant. The repayment amount is calculated and paid annually for fiscal years 2010, 2011 and 2012 if the agreed criteria are met. For each of these three years, if the yearly average gold price is higher than $620 per ounce, 50% of one third of the grant must be repaid. The Company believes the gold price will be higher than $620 per ounce during the years 2010, 2011 and 2012 and that the criteria for recognition of a loss contingency accrual in accordance with FASB ASC 450Contingencies (Prior authoritative literature: FASBStatement No.5, "Accounting for Contingencies") have beenmet. (c) Pension benefits Effective July1, 1997, Agnico-Eagle's defined benefit pension plan for active employees (the"Employees Plan") was converted to a defined contribution plan. Employees who retired prior to that date remained in the Employees Plan. In addition, Agnico-Eagle provides a non-registered executive supplementary defined benefit plan for certain senior officers (the"Executives Plan"). The funded status of the Executives Plan is based on actuarial valuations as of July1, 2008 and projected to December31, 2009. The funded status of the Employees Plan in 2007 was based on an actuarial valuation as of January1, 2006 and projected to December31, 2007. During 2008 however, the Employees Plan was closed as a result of annuities having been purchased for all remaining members. Recognition of the settlement has been reflected in the 2008 net periodic pensionscost. The components of Agnico-Eagle's net pension plan ex |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
SHAREHOLDERS' EQUITY | 6.SHAREHOLDERS' EQUITY (a) Common shares The Company's authorized capital stock includes an unlimited number of common shares with issued common shares of 156,655,056 (2008154,808,918), less 29,882treasury shares related to the restricted share unit plan (2008nil). In 2009, the Company declared dividends on its common shares of $0.18 per share (2008$0.18 per share; 2007$0.18pershare). (b) Flow-through common share private placements In 2009, Agnico-Eagle issued 358,900 (2008779,250; 2007nil) common shares under flow-through share private placements that increased share capital by $19.2million (2008$43.5million; 2007nil), net of share issue costs. Effective December31, 2009, the Company renounced to its investors C$30.6million (2008C$54.5million; 2007C$10.1million) of such expenses for income tax purposes. The Company does not have an obligation to incur any exploration expenditures related to the expenditures previously renounced. The difference between the flow-through share issuance price and the market price of Agnico-Eagle's shares at the time of purchase is recorded as a liability at the time the flow-through shares are issued. This liability terminates when the exploration expenditures are renounced to investors. The difference between the flow-through share issuance price and market price reduces the future tax expense charged to income as this difference represents proceeds received by the Company for the sale of future tax deductions to investors in the flow-through shares. (c) Private placements On December3, 2008, the Company closed a private placement of 9.2million units. Each unit consisted of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share of the Company at a price of $47.25 per share at any time during the five-year term of the warrant. As consideration for the lead purchaser's commitment, the Company issued to the lead purchaser an additional 4million warrants. The net proceeds of the private placement were approximately $281million, after deducting share issue costs of $8.8million. If all outstanding warrants are exercised, the Company would issue an additional 8.6million commonshares. On May26, 2009, the Company issued 15,825shares with a market value of $0.9million in connection with the acquisition of a 100% participating interest in 52mining claims, located in the Abitibi region ofQuebec. On July24, 2009, the Company issued 18,000shares for consideration of $500 in connection with the exercise of an option granted by a predecessor to the Company relating to the acquisition of certain properties relating to the GoldexMine. (d) Public offering of common shares In December2008, the Company issued 900,000shares at a price of $38 per share under a prospectus supplement to its base shelf prospectus to fund a purchase of surface rights and advance royalty payments in connection with the development of the Pinos Altos property. The net proceeds of the issuance were approximately $34.2million. There were no public offerings of common shares in 2009. (e) Accumulated other comprehensive income ( |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
STOCK-BASED COMPENSATION | 7.STOCK-BASED COMPENSATION (a) Employee Stock Option Plan ("ESOP") The Company's ESOP provides for the granting of options to directors, officers, employees and service providers to purchase common shares. Under this plan, options are granted at the fair market value of the underlying shares on the day prior to the date of grant. The number of shares subject to option for any one person may not exceed 5% of the Company's common shares issued and outstanding at the date ofgrant. Up to May31, 2001, the number of common shares reserved for issuance under the ESOP was 6,000,000 and options granted under the ESOP had a maximum term of ten years. On April24, 2001, the Compensation Committee of the Board of Directors adopted a policy pursuant to which options granted after that date shall have a maximum term of five years. In 2001, the shareholders approved a resolution to increase the number of common shares reserved for issuance under the ESOP by 2,000,000 to 8,000,000. In 2004 and 2006, the shareholders approved a further 2,000,000 and 3,000,000common shares for issuance under the ESOP, respectively. In 2008, the shareholders approved a further 6,000,000common shares for issuance under theESOP. Of the 2,276,000options granted under the ESOP in 2009, 569,000options granted vested immediately and expire in 2014. The remaining options expire in 2014 and vest in equal installments, on each anniversary date of the grant, over a three-year period. Of the 2,549,400options granted under the ESOP in 2008, 637,350options granted vested immediately and expire in 2013. The remaining options expire in 2013 and vest in equal installments, on each anniversary date of the grant, over a three-year period. Of the 1,380,000options granted under the ESOP in 2007, 345,000options granted vested immediately and expire in 2012. The remaining options expire in 2012 and vest in equal installments, on each anniversary date of the grant, over a three-year period. As a result of the acquisition of Cumberland ResourcesLtd. ("Cumberland"), 326,250options in Cumberland were converted to options of the Company. All these options vested immediately. Upon the exercise of stock options under the ESOP, the Company issues new common shares to settle the obligation. The following summary sets out the activity with respect to Agnico-Eagle's outstanding stockoptions: 2009 2008 2007 Options Weighted average exercise price Options Weighted average exercise price Options Weighted average exercise price Outstanding, beginning of year 4,752,440 C$ 44.57 3,609,924 C$ 30.34 2,478,790 C$ 19.55 Granted 2,276,000 62.65 2,549,400 54.84 1,706,250 41.74 Exercised (1,238,000 ) 34.28 (1,340,484 ) 25.46 (536,116 ) 17.56 Cancelled (82,500 ) 55.99 (66,400 ) 51.32 (39,000 ) 19.16 Outstanding, end of year 5,707,940 C$ 53.85 4,752,440 C$ 44.57 3,609,924 C$ 30.34 Options exercisable at end of year 2,445,615 1,860,890 1,908,049 |
INCOME AND MINING TAXES
INCOME AND MINING TAXES | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
INCOME AND MINING TAXES | 8.INCOME AND MINING TAXES Income and mining taxes recovery is made up of the following geographic components: 2009 2008 2007 Current provision Canada $ 1,171 $ 6,143 $ 3,272 Future provision (recovery) Canada 27,083 25,580 20,363 Finland (6,754 ) (8,899 ) (3,702 ) $ 21,500 $ 22,824 $ 19,933 Cash income and mining taxes paid in 2009 were $8.8million (2008$3.8million; 2007$22.1million). The income and mining taxes recovery is different from the amount that would have been computed by applying the Canadian statutory income tax rate as a result of thefollowing: 2009 2008 2007 Combined federal and composite provincial tax rates 30.9 % 31.1 % 32.6 % Increase (decrease) in taxes resulting from: Provincial mining duties 16.1 6.9 12.3 Tax law change (US$ election) (24.4 ) Impact of foreign tax rates (4.9 ) (2.3 ) Permanent differences 2.2 (13.4 ) (0.9 ) Valuation allowance 5.8 Effect of changes in income tax rates (6.6 ) (29.2 ) Actual rate as a percentage of pre-tax income 19.9 % 23.8 % 12.5 % As at December31, 2009 and 2008, Agnico-Eagle's future income and mining tax assets and liabilities were asfollows: 2009 2008 Assets Liabilities Assets Liabilities Mining properties $ $ 572,964 $ $ 471,553 Net operating and capital loss carry-forwards 27,878 (24,692 ) 21,647 (14,906 ) Mining duties (44,967 ) (38,669 ) Reclamation provisions (20,774 ) (22,892 ) Valuation allowance 11,350 8,330 Future income and mining tax assets and liabilities $ 27,878 $ 493,881 $ 21,647 $ 403,416 All of Agnico-Eagle's future income tax assets and liabilities were denominated in local currency based on the jurisdiction in which the Company paid taxes and were translated into US dollars using the exchange rate in effect at the consolidated balance sheet dates. The increase in future income tax liabilities was due in part to the weaker US dollar in relation to the Canadian dollar. On December12, 2008 however, the Company executed a Canadian federal tax election to commence using the US dollar as its functional currency for federal Canadian income tax purposes. This election applies to taxation years ended December31, 2008 and subsequent. This election resulted in a deferred tax benefit of $21.0million for the period ended December31,2009. At December31, 2009, asset and liability amounts were translated into US dollars at an exchange rate of C$1.0466 per $1.00, and at an exchange rate of SEK7.2125per $1.00, whereas at December31, 2008, asset and liability amounts were translated at an exchange rate of C$1.2240 per $1.00, and at an exchange rate of SEK 7.8770per$1.00. The Company operates in different jurisdictio |
ACQUISITIONS
ACQUISITIONS | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
ACQUISITIONS | 9.ACQUISITIONS Cumberland ResourcesLtd. On February14, 2007, the Company and Agnico-Eagle Acquisition Corporation ("Agnico Acquisition"), a wholly-owned subsidiary of the Company, signed an agreement with Cumberland under which the Company and Agnico Acquisition agreed to make an exchange offer (the"Offer") for all of the outstanding common shares of Cumberland not already owned by the Company. At the time, the Company owned 2,037,000 or 2.6% of the outstanding shares of Cumberland on a fully diluted basis. Under the terms of the Offer, each Cumberland share was to be exchanged for 0.185common shares of Agnico-Eagle. At the time, Cumberland owned 100% of the Meadowbank gold project, located in Nunavut, Canada. As of July9, 2007, all common shares of Cumberland were acquired pursuant to the Offer. As of July9, 2007, a total of 13,768,510 of the Company's shares were issued for the acquisition resulting in an increase of $536.6million in common shares issued. The total purchase price as of July9, 2007 amounted to $577.0million which was allocated to various balance sheet accounts, mainly mining properties. On August1, 2007, Agnico Acquisition, Cumberland and a wholly-owned subsidiary of Cumberland were amalgamated with Agnico-Eagle. The results of operations of Cumberland are included in the income statement for the combined entity from April17,2007. The purchase price paid through the issuance of 13,768,510shares of the Company is summarized asfollows. Shares Issued Total Issuance of the Company's Shares for Cumberland Acquisition: April16, 2007 11,610,074 April30, 2007 932,958 July9, 2007 1,225,478 Total shares issued 13,768,510 In addition, the Company entered into a series of gold derivative transactions in connection with the take-over bid for Cumberland in February2007. Prior to announcement of the take-over bid by Agnico-Eagle, Cumberland secured a gold loan facility for up to 420,000ounces. As part of the condition of the gold loan, Cumberland entered into a series of derivative transactions to secure a minimum monetized value for the gold that was expected to be received under the gold loan. Cumberland entered into a zero-cost collar whereby a gold put option was bought with a strike price of C$605 per ounce. The cost of the put option was financed by the sale of a gold call option with a strike price of $800 per ounce. Both of Cumberland's derivative positions were for 420,000ounces of gold and matured on September20, 2007, the expected drawdown date of the loan. As Agnico-Eagle's policy is to not sell forward gold production, Agnico-Eagle entered into a series of transactions to neutralize Cumberland's derivative position. Accordingly, Agnico-Eagle purchased call options and sold put options with the exact same size, strike price and maturity as Cumberland's derivative position for $15.9million. All derivative positions were closed out in late June2007. During 2008 certain tax assets that were not recognized upon the acquisition of Cumberland in 2007 were determined to be more likely than not to be realized. This resulted in a decrease to |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 10.ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 2009 2008 Trade payables $ 86,392 $ 68,571 Wages payable 14,036 6,484 Accrued liabilities 31,924 32,991 Current portion of capital lease obligations 11,955 9,792 Other liabilities 11,125 21,957 $ 155,432 $ 139,795 Other liabilities mainly consists of the liability portion of the flow-through shares issuance of $6.8million (2008$17.5million) (note6(b)). |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
RELATED PARTY TRANSACTIONS | 11.RELATED PARTY TRANSACTIONS Contact Diamond Corporation ("Contact") was a consolidated entity of the Company for the year ended December31, 2002. As of August2003, the Company ceased consolidating Contact as the Company's investment no longer represented a "controlling financial interest". The loan was originally advanced for the purpose of funding ongoing exploration and operating activities. The loan was repayable on demand with a rate of interest on the loan of 8% per annum. The Company, however, waived the interest on this loan commencing May13,2002. In 2006, the Company tendered its 13.8million Contact shares in conjunction with Stornoway Diamond Corporation's ("Stornoway") offer to acquire all of the outstanding shares of Contact. Under the terms of the offer, each share of Contact was exchanged for 0.36 of a Stornoway share resulting in the receipt by the Company of 4,968,747Stornoway shares. A $4.4million gain on the exchange of shares was recognized and a gain of $2.9million was recognized on the write-up of the loan to Contact during 2006. On February12, 2007, Agnico-Eagle subscribed to a private placement of subscription receipts by Stornoway for a total cost of $19.8million. Stornoway acquired the debt in full by way of assignment of the note in consideration for the issuance to the Company of 3,207,861common shares of Stornoway at a deemed value of C$1.25 per share. In addition, on March16, 2007, the Company purchased from Stornoway C$5million in unsecured SeriesA Convertible Debentures and C$5million in unsecured SeriesB Convertible Debentures. Both series of debentures matured two years after their date of issue and interest was payable under the debentures quarterly at 12% per annum. At the option of Stornoway, interest payments could be paid in cash or in shares of Stornoway. During 2008, the interest payments to the Company amounted to C$0.7million and consisted of 1,940,614shares (2007C$0.9million of which C$0.6million was received in cash and the rest 302,450shares) ofStornoway. On July31, 2008, the Company purchased from treasury 12,222,222common shares of Stornoway at a price of C$0.90 per common share. Stornoway used the proceeds of the private placement to redeem the C$10million principal amount of convertible debentures held by the Company and to pay to the Company a C$1million amendment fee in connection with the amendment of the debentures to permit early redemption. The Company received an additional 527,947common shares of Stornoway in satisfaction of accrued but unpaid interest on the debentures prior to their redemption. As a result of these transactions, the Company increased its holdings in Stornoway from 27,520,809common shares (approximately 13.6% of the issued and outstanding common shares) to 40,270,978common shares (approximately 15.8% of the issued and outstanding commonshares). Agnico-Eagle's holdings in Stornoway as at December31, 2009 remain unchanged at 40,270,978common shares (approximately 15.3% of the issued and outstanding commonshares). Subsequent to year-end, the Company purchased 5.0million common shares of Stornoway at a price of C$0.50per common share. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
COMMITMENTS AND CONTINGENCIES | 12.COMMITMENTS AND CONTINGENCIES As part of its ongoing business and operations, the Company has been required to provide assurance in the form of letters of credit for environmental and site restoration costs, custom credits, government grantsand other general corporate purposes. As at December31, 2009, the total amount of these guarantees was $85.3million. Certain of the Company's properties are subject to royalty arrangements. The following are the most significant royalties. The Company has a royalty agreement with the Finnish government relating to the Kittila Mine. Starting 12months after the mining operations commence, the Company has to pay 2% on net smelter return, defined as revenue less processing costs. The royalty is paid on a yearly basis the followingyear. The Company is committed to pay a royalty on future production from the Meadowbank Mine. The Nunavut Tunngavik-administered mineral claims are subject to production leases including a 12% net profits interest royalty from which annual deductions are limited to 85% of gross revenue. Production from Crown mining leases is subject to a royalty of up to 14% of adjusted net profits, as defined in the Northwest Territories and Nunavut Mining Regulations under the Territorial Lands Act(Canada). The Company is committed to pay a royalty on production from properties in the Abitibi area. The type of royalty agreements include but are not limited to net profits interest royalty and net smelter return royalty with percentages ranging from 0.5% to5%. The Company is committed to pay a royalty on production from properties in the Pinos Altos area. The type of royalty agreements include but are not limited to net profits interest royalty and net smelter return royalty with percentages ranging from 2.5% to3.5%. In addition, the Company has purchase commitments related to the Kittila Mine for oxygen and electricity supplies: Purchase Commitments 2010 $ 9,987 2011 6,156 2012 3,994 2013 3,457 2014 3,457 Later years 34,576 Total $ 61,627 |
LEASES
LEASES | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
LEASES | 13.LEASES (a) Capital Leases In 2009, the Company entered into five sale-leaseback agreements with third-parties for various fixed and mobile equipment within Canada. These arrangements represent sale-leaseback transactions in accordance with ASC 840-40Sale-Leaseback Transactions. The following table provides summarized information related to these transactions: Effective Annual Interest Rate Length of Contract Sale-leaseback #1 5.95% 5years Sale-leaseback #2 5.95% 4years Sale-leaseback #3 6.10% 4years Sale-leaseback #4 6.06% 4years Sale-leaseback #5 6.06% 4years All of the sale-leaseback agreements have end of lease clauses that qualify as bargain purchase options that the Company expects to execute. The total gross amount of assets recorded under sales-leaseback capital leases amount to $21.0million (2008nil). The Company has agreements with third-party providers of mobile equipment for the development of the Meadowbank Mine and the Kittila Mine. These arrangements represent capital leases in accordance with the guidance in ASC840-30Capital Leases. The leases for mobile equipment at the Kittila Mine are for five years and the leases for mobile equipment at the Meadowbank Mine are for three years. The effective annual interest rate on the lease for mobile equipment at Meadowbank is 3.15%. The effective annual interest rate on the lease for mobile equipment at Kittila is4.99%. The following is a schedule of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as at December31,2009. Year ending December31: 2010 $ 13,457 2011 6,529 2012 7,499 2013 8,185 2014 2,092 Thereafter Total minimum lease payments 37,762 Less amount representing interest 3,826 Present value of net minimum lease payments $ 33,936 The Company's capital lease obligations at December31 are comprised as follows: 2009 2008 Total future lease payments $ 37,762 $ 23,370 Less: interest 3,826 1,499 33,936 21,871 Less: current portion 11,955 9,792 Long-term portion of capital leases $ 21,981 $ 12,079 At the end of 2009, the gross amount of assets recorded under capital leases, including sale-leaseback capital leases was $51.7million (2008$30.7million; 2007$16.1million). The charge to income resulting from amortization of assets recorded under capital leases is included in the amortization of plant and equipment component of the Consolidated Statements of Income. (b) Operating Leases The Company has a number of operating lease agreements involving office space. Some of the leases for office facilities contain escalation clauses for increases in operating costs and property taxes. Future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms in excess of one year as at December31, 2009 are asfollows: Minimum lease payments: |
RESTRICTED CASH
RESTRICTED CASH | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
RESTRICTED CASH | 14.RESTRICTED CASH In 2008, the Company raised approximately $43.5million through the issuance of 779,250flow-through common shares. To comply with the flow-through share agreements, the Company was obligated to incur $31million of eligible Canadian exploration expenditures in 2009 related to the expenditures renounced in 2008 (note6(b)). The amount of cash the Company was obligated to spend was designated as restricted cash as at December31, 2008. In 2009, the Company incurred the full amount of its Canadian exploration expenditures obligation required under the flow-through share agreements. In 2009, the Company raised approximately $25.9million through the issuance of 358,900flow-through common shares. By December31, 2009, the Company had incurred all required expenditures on eligible Canadian exploration expenditures related to the 2009 flow-through common share issuance (note6(b)) andthe balance of restricted cash wasnil at December31,2009. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
FINANCIAL INSTRUMENTS | 15.FINANCIAL INSTRUMENTS From time to time, Agnico-Eagle has entered into financial instruments with a number of financial institutions in order to hedge underlying cash flow and fair value exposures arising from changes in commodity prices, interest rates, equity prices or foreign currency exchangerates. In 2008 and 2009, financial instruments which have subjected Agnico-Eagle to market risk and concentration of credit risk consisted primarily of cash, cash equivalents and short-term investments. Agnico-Eagle places its cash and cash equivalents and short-term investments in high quality securities issued by government agencies, financial institutions and major corporations and limits the amount of credit exposure by diversifying itsholdings. Agnico-Eagle generates almost all of its revenues in US dollars. The Company's Canadian operations, which include the LaRonde Mine, the Goldex Mine, the Lapa Mine, and the Meadowbank Mine, have Canadian dollar requirements for capital, operating and exploration expenditures. In 2008, to mitigate the risks associated with fluctuating foreign exchange rates, the Company entered into three zero cost collars to hedge the functional currency equivalent cash flows associated with the Canadian dollar denominated capital expenditures related to the Meadowbank Mine. In March2009, the Company entered into another zero cost collar for the same purpose. The purchase of USdollar put options has been financed through selling US dollar call options at a higher level such that the net premium payable to the different counterparties by the Company is nil. The hedged items represents monthly unhedged forecast Canadian dollar cash outflows during 2009. At December31, 2008, the three zero cost collars hedged $180million of 2009 expenditures and the additional zero cost collar entered in 2009 hedged $45million of 2009 expenditures. The cash flow hedging relationship meets all requirements per ASC815 to be perfectly effective, and unrealized gains and losses is recognized within other comprehensive income ("OCI"). Gains and losses deferred in accumulated other comprehensive income ("AOCI") are recognized into income as amortization (ordepreciation) of the hedged capital asset occurs. Amounts transferred out of accumulated OCI are recorded in the Property, Plant and Mine development line item in the balance sheet and are amortized into income over the same period as the hedged capital asset. In 2009, all of the effective hedges matured and a total of $7.4million was reclassified from OCI to the balance sheet as a credit to Property, Plant, and mine development line item. The total amount of unrealized loss on the hedges was nil as at December31, 2009 (2008$8.9million). The Company expects approximately $0.6million to be reclassified into earnings in2010 as the net gain is amortized in relation to the hedged capital asset. The following table shows the changes in the AOCI balances recorded in the consolidated financial statements pertaining to the foreign exchange hedging activities. The fair values, based on Black-Scholes calculated mark-to-market valuations, of recorded derivative related assets an |
SEGMENTED INFORMATION
SEGMENTED INFORMATION | |
12 Months Ended
Dec. 31, 2009 | |
Notes to Consolidated Financial Statements | |
SEGMENTED INFORMATION | 16.SEGMENTED INFORMATION Agnico-Eagle predominantly operates in a single industry, namely exploration for and production of gold. Based on the internal reporting structure and the nature of the Company's activities, the Company identifies its reportable segments as those consolidated mining operations or functional groups that represent more than 10% of the combined revenue, profit or loss or total assets of all reported operating segments. Consolidated mining operations or functional groups not meeting this threshold are aggregated at the applicable geographic region for segment reporting purposes. This structure reflects how the Company manages its business and how it classifies its operations for planning and measuring performance: Canada: LaRonde Mine, Lapa Mine, Goldex Mine, Meadowbank Mine, and the RegionalOffice Europe: Kittila Mine Latin America: Pinos Altos Mine USA: USA Exploration office, Europe Exploration office, Canada Exploration office, and the Latin America Exploration office Corporate Head Office assets are included in the Canada category and specific corporate income and expense items are noted separately below. On May1, 2009, both the Lapa Mine and Kittila Mine achieved commercial production. The Pinos Altos Mine achieved commercial production on November1, 2009. The Goldex Mine achieved commercial production August1,2008. The Meadowbank Mine is expected to achieve commercial production in the first quarter of 2010. Twelve Months Ended December31, 2009 Revenues from Mining Operations Production Costs Amortization Exploration Corporate Development Foreign Currency Translation Loss (Gain) Segment Income (Loss) Canada $ 538,123 $ 252,035 $ 60,028 $ $ 36,499 $ 189,561 Europe 61,457 42,464 10,909 3,582 4,502 Latin America 14,182 11,819 1,524 (250 ) 1,089 Exploration 36,279 (36,279 ) $ 613,762 $ 306,318 $ 72,461 $ 36,279 $ 39,831 $ 158,873 Segment income $ 158,873 Corporate and Other Interest and sundry income 16,172 Gain on sale of available-for-sale securities 10,142 General and administrative (63,687 ) Provincial capital tax (5,014 ) Interest expense (8,448 ) Income before income, mining and federal capital taxes $ 108,038 Twelve Months Ended December31, 2008 Revenues from Mining Operations Production Costs Amortization Exploration Corporate Development Foreign Currency Translation Loss (Gain) Segment Income (Loss) Canada $ 368,938 $ 186,862 $ 36,133 $ $ (70,442 ) $ 216,385 Europe (7,281 ) 7,281 Latin America 35 (35 ) Exploration 34,704 (34,704 ) $ 368,938 $ 186,862 $ 36,133 $ 34,704 $ (77,688 ) |
Document and Entity Information
Document and Entity Information | ||
12 Months Ended
Dec. 31, 2009 | Dec. 31, 2009
| |
Document and Entity Information | ||
Entity Registrant Name | AGNICO EAGLE MINES LTD | |
Entity Central Index Key | 0000002809 | |
Document Type | 20-F | |
Document Period End Date | 2009-12-31 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 156,625,174 |