Agnico Eagle Mines Limited (AEM) Earnings

Management highlights

### Core Strategic & Cultural Pillars - The company maintains a consistent 70-year strategy focused on operating in low-risk, high-potential mining jurisdictions, disciplined capital allocation, per-share value creation, and sustained capital returns to shareholders. - A culture of continuous operational improvement delivered record mill throughput at mines representing more than half of total company production in Q2 2026, demonstrating consistent operational delivery even amid industry-wide cost pressures. - Safety remains the company's top priority, following three fatalities in the last year. All fatalities are deemed unacceptable, and the company is accelerating work to strengthen critical hazard controls, supervision, and safe work practices across all sites. ### Capital Allocation - The company maintains a balanced approach to capital allocation, enabling it to simultaneously deliver shareholder returns, invest in organic growth, pursue strategic M&A, and strengthen the balance sheet in the current favorable gold price environment. - In Q2 2026, the company returned $625 million to shareholders via dividends and $400 million in share repurchases. Year-to-date through H1 2026, it has returned 48% of free cash flow to shareholders, exceeding its full-year target of 40%, and is on track to exceed the target for the full year. - Over $800 million was invested in capital expenditures and capitalized exploration in Q2, with ~40% of year-to-date operating cash flow allocated to growing the business. An additional ~$600 million in cash was used to complete strategic consolidation in Finland, with 15% of operating cash flow retained to strengthen the balance sheet. ### Organic Growth Project Progress - Canadian Malartic (Odyssey project): First phase shaft sinking was completed three months ahead of schedule, reaching 1.6 kilometers underground. Commissioning of the production shaft remains on track for Q2 2027. The first two underground stopes have been extracted, with 6 total stopes planned for the rest of 2026, 30 planned for 2027, and over 90 planned for 2028. - Upper Beaver: Full construction approval was granted in May, with over 70% of engineering completed. The project benefits from the team's 15+ years of Arctic operating experience, and logistics are ahead of schedule. - Hope Bay: The project received board approval for development, and construction is on track. The first supply vessel is scheduled to depart for the site in early August, with camp expansion completed to support workforce ramp-up. Hope Bay will be a world-class low-cost mine producing 400,000-450,000 ounces per year for decades, with substantial untapped exploration potential across the property's 80-kilometer greenstone belts. - Detour Underground: Early development is progressing on schedule, with over 1,000 meters of exploration ramp completed. The project could deliver early production of 20,000-30,000 ounces per year starting in 2028, two years ahead of the original timeline. - San Nicolas (Mexico, joint venture): Received key change of land use and environmental impact assessment permits. Detailed engineering is 45% complete, with the project continuing to advance construction and operational readiness activities ahead of a final sanction decision. ### Strategic M&A & Regional Growth - Completed a strategic consolidation of land in Finnish Lapland during Q2 2026 via the acquisition of Rupert Resources, Orion Resources, and the FinCol joint venture. The transaction creates a 2,500 square kilometer land position in the highly prospective Lapland Greenstone Belt, anchored by the Ikkari gold deposit, the most significant discovery in Finland since the Kittilä mine. - The regional Finland platform has clear long-term potential to grow to over 500,000 ounces of annual production, doubling the size of the company's current European business. ### Exploration - Exploration is a core priority for the company, with 126 drill rigs operating year-to-date, completing 760 kilometers of diamond drilling, on track to hit the full-year 2026 budget of 1.4 million meters. The company has consistently grown per-share mineral reserves and resources for multiple consecutive years. - Strong exploration results were reported across the portfolio: multiple high-grade intercepts at Canadian Malartic (East Goldie and Artemis Zone), Detour Lake (western deposit extension and near-term mining areas), and Hope Bay (Patch 7 area, including a 28.8 g/t gold intercept over 21 meters core length), with the deposit open at depth and along strike in all key projects.

Guidance

- Full year 2026 gold production guidance is maintained at 3.3 to 3.5 million ounces, with production now expected toward the lower end of the range following the Barnat pit rock movement event. - Q2 2026 cash costs and all-in sustaining costs came in below the midpoint of the full-year guidance range, with full-year 2026 costs expected to be slightly higher at Canadian Malartic in the second half due to lower production from the Barnat incident, partially offset by favorable impacts from a stronger U.S. dollar, conservative royalty and by-product pricing assumptions. - The 20% to 30% long-term production growth target (to be achieved over the next decade) is maintained, and this target was set prior to the Finland land consolidation, leaving additional upside for growth. - The company expects to exceed its full-year 2026 target of returning 40% of free cash flow to shareholders, as it has already returned 48% through the first half of the year. - Project-level milestones: Canadian Malartic (Odyssey) production shaft commissioning remains on track for Q2 2027; optimization study for the Finland Ikkari project is expected to be completed by the end of 2027; an updated technical report for Detour Underground is expected by mid-2027; Barnat pit mining is expected to resume in Q4 2026 after remediation work is completed in Q3 2026.

Segment performance

Agnico Eagle Mines reported Q2 2026 gold production of 856,000 ounces, which came in above budget for the second consecutive quarter. Key operational highlights by major operating assets: 1. Canadian Malartic (Quebec): First half 2026 production remained on target, though Q2 faced operational challenges from a July 1 rock movement event at the Barnat pit. The mill achieved record quarterly throughput as the site continues optimization to ramp up to 2,000 tons per day by the end of 2026, with long-term plans to reach 1 million ounces of annual production. 2. Detour Lake (Ontario): Achieved consecutive quarterly record tons mined and record daily mill throughput, driven by ongoing productivity initiatives. The site outperformed production plan in Q2, and remains on track to reach 1 million ounces of annual production via the Detour Underground project. 3. Kittilä (Finland): Delivered an excellent quarter with outperformance on both production and costs, and is positioned to support long-term regional growth following the Q2 Finland land consolidation. 4. Meliadine (Nunavut): Achieved a quarterly record average mill throughput of over 7,000 tons per day, exceeding the 6,500 ton per day target. First half 2026 production remained on plan. 5. Fosterville (Australia): Performed above plan, with a 14% year-over-year increase in development rate driven by productivity improvements, and grades have performed slightly better than original guidance year-to-date. Financially, the company generated record Q2 2026 free cash flow of over $1.3 billion, adjusted net income of ~$1.5 billion ($3.07 per diluted share), and adjusted EBITDA of ~$2.7 billion. Total cash costs were $1,054 per ounce, and all-in sustaining costs were $1,459 per ounce, both below the midpoint of full-year guidance ranges and hundreds of dollars below the industry average. Cash on hand reached a record $3.5 billion, with a net cash position of $3.3 billion at quarter end.

Risks & headwinds

- Operational risk: A 1 million ton rock movement occurred at the Barnat pit of Canadian Malartic on July 1, 2026, which was detected early via existing monitoring systems, with all personnel and equipment evacuated safely. The event resulted in 370,000 ounces of gold becoming inaccessible, pushing 2026 full-year production toward the lower end of the guidance range, and will result in slightly lower production and higher costs at Canadian Malartic in 2026 and 2027. Mitigations are underway, including the use of existing low-grade stockpiles to keep the mill operating, and remediation work is scheduled for Q3 to resume mining in Q4. - Safety risk: Three fatalities occurred at different Agnico Eagle operations over the last year, all of which are deemed unacceptable by management. Root causes varied across incidents: unrecognized hazard from equipment design, erosion of long-standing engineering controls, and unvetted changes to work practices. The company is accelerating a company-wide program to strengthen critical hazard controls, supervision, and safe work practices, which is being rolled out gradually to ensure thorough implementation. - Cost and inflation risk: Industry-wide inflationary pressures persist, with labor and diesel identified as the key sources of cost pressure going into 2027. Diesel represents ~7% of the company's total overall cost structure, and labor inflation of 3-4% is expected for 2027 in Canada, where 40-50% of the company's cost base is located. The company's continuous productivity and efficiency initiatives have historically offset roughly half of annual inflationary pressure, which is the target going forward, but full offset is not guaranteed. - Labor market risk: Tight labor markets are expected to remain a long-term challenge across the mining industry, particularly in remote regions like Northern Ontario and Nunavut. The company has lower turnover than peers (half the industry average, with turnover declining over the last year) and is proactively mitigating risk by building permanent housing in remote communities and expanding recruitment pools, but tight labor could still put upward pressure on costs. - Geopolitical and macroeconomic risk: The company noted ongoing volatility in geopolitics, global economic conditions, and gold prices during Q2 2026, though its diversified portfolio and strong balance sheet provide resilience against this volatility.

Analyst Q&A

• Q: After the Barnat pit rock slide, how much gold is inaccessible, and is there any plan to offset this production loss across the portfolio? /

  A: Management confirmed that 370,000 ounces of gold are no longer accessible from the Barnat pit, with an average grade of ~1.1 g/t. The mill will remain operational processing low-grade stockpiles while remediation is completed. The Barnat pit was already near the end of its mine life, and the company has delivered consistent operational improvements and new gold discoveries across the broader portfolio that are expected to partially offset the lost ounces, with full-year 2026 production remaining within the original guidance range. The 1 million ounce annual production target for Canadian Malartic (driven by the Odyssey underground project) remains fully on track, as the Barnat pit is unrelated to that long-term growth plan.

• Q: What is Agnico Eagle's current approach to M&A after the Finland consolidation, given lower sector valuations? /

  A: Management stated that the company's M&A strategy remains unchanged. Agnico currently has the strongest organic growth pipeline in its history, and the company's core focus is on delivering per-share value growth, not growing for growth's sake. The company continues to evaluate potential opportunities, but will only pursue transactions that deliver clear per-share value for shareholders, consistent with its long-standing disciplined approach to capital allocation.

• Q: Can management update on the safety improvements being implemented after the three recent fatalities, and how quickly can these changes be rolled out? /

  A: All three fatalities occurred at different sites with different root causes: an unrecognized pinch point hazard on equipment, eroded engineering controls around a conveyor, and an unvetted change to work practices at a construction site. Management has launched a company-wide program to identify and reinforce critical hazard controls across all sites, strengthen supervision, and reinforce safe work behaviors. The work is being rolled out gradually to ensure it is implemented thoroughly, rather than rushing to complete changes too quickly, with the company supplementing site resources to support the program. Any fatality is unacceptable, and the entire organization is committed to eliminating future fatal events.

• Q: What are the next catalysts for the new Finland consolidation, and how will the Ikkari project development differ from the prior Rupert Resources feasibility study? /

  A: The first priority is completing an optimized project study for Ikkari, now that prior property boundary constraints have been removed. The study will evaluate unconstrained options for infrastructure and mine planning, and results are expected to be released by the end of 2027. Exploration drilling will ramp up to five rigs by the end of 2026, to test for extensions of the Ikkari deposit and the numerous additional regional exploration targets across the new 2,500 square kilometer land package.

• Q: How much of industry inflation can the company offset with its continuous productivity and optimization initiatives? /

  A: Management's objective is to offset as much inflation as possible. Over the past three years, average annual industry inflation has been roughly 7%, and the company's productivity initiatives have offset roughly half of that, resulting in net cost increases of 3-4% per year on average. This is the target for offsetting inflation going forward as well.