Agnico Eagle Mines Ltd. Q4 FY2024 earnings call

• Safety and operating performance drove record production in 2024, with strong cost control and a higher gold price environment. - Balance sheet was significantly strengthened in Q4 2024, with net debt reduced from $1.5 billion at the start of the year to $217 million by year-end. - Prioritized returns to shareholders, with approximately $2.2 billion returned through dividends, share repurchases, and net debt reduction in 2024. - Growth projects: Hope Bay's Patch 7 offers potential for over 400,000 ounces per year; Malartic aims to reach over 1 million ounces per year; Ontario platform targets 50% growth with Upper Beaver and Detour; exploration program saw over 1.2 million meters of drilling in 2024, with strong results.

In 2024, Agnico Eagle achieved record financial results. Full-year gold production was 3.49 million ounces, exceeding the midpoint of guidance. Fourth-quarter gold production was approximately 847,000 ounces. Total cash costs for the year were $903 per ounce, and all-in sustaining costs were $1,239 per ounce, well within guided ranges. The Nunavut platform had a record operating margin of $1.3 billion in 2024. Revenue, adjusted earnings, and operating cash flow were all records for the year.

• Production guidance for 2025-2026 is marginally down ~2.9% due to ground conditions, processing deferrals, etc., but 2027 production demonstrates transition to growth projects. - Expect further margin expansion and cash flow growth in 2025 with current gold prices. - Aim to strengthen balance sheet and increase financial flexibility, with sustaining capital flat but growth and exploration spending increased.

• Volatility in global markets, including gold, which could impact performance. - Potential impact of tariffs and foreign exchange on costs. - Uncertainties in project approvals and permitting for growth projects like San Nicolas and others.

Q: Hi, good morning, Ammar, Jamie, Dominique, and Natasha. Congratulations on a really solid year. I'm going to limit my one question to Hope Bay and when you expect that, like what's the timeline for delivery and when do you expect to see that onset starting? Can you give us an idea of where that was got into the growth pipeline?

A: Good morning, Anita. Dominique speaking. So this year's focus is really to freeze the scope of the project. As now we are including the Patch 7 resources, we still need to reshuffle and to look to the mine plan and to be at 40% engineering done by the end of the year. It is the same approach we did at Meliadine, if you recall, where before announcing a project, especially in Nunavut, we need to have to derisk it, and we are going to be there early next year. So in the first half of 2026, we are expecting to give more detail about our project.

Q: Thanks very much. Just a question first on the capital allocation. The free cash flow continues to be very strong here. We are projecting the company to be in a net cash position in the very near future. The dividend was kept flat. The buyback is light. The company is pretty much full tilt on project advancement. So how should we think about excess cash being allocated going forward?

A: Yes, thanks, Josh. It's Jamie here. So yes, I mean, if you look back at 2024, and I referenced it in my comments, we've returned about 43% of our free cash flow to shareholders directly through the dividend and through the share buyback. So the gold price has risen pretty dramatically here in the first part of the year. Like, our average realized price in Q4 was 2,660, and we are up around 2,900 now. So for the time being, obviously, we'll continue with the dividend at the current rate, about $800 million annually, and we'll be opportunistic in terms of share repurchases. But even with the current gold price and our projected free cash flow, we'll still be returning about a third of that cash flow directly to shareholders and the majority of the rest is going to go to improving the balance sheet and getting to that net cash position as you suggested.