McFarlane Lake Mining Limited press release

AGNICO EAGLE RELEASES DETOUR LAKE PROPOSED UNDERGROUND MINING PLAN DEMONSTRATING STRONG RETURNS AND PATHWAY TO ANNUAL GOLD PRODUCTION OF ONE MILLION OUNCES

2024-06-19

CSE - Canadian National Stock Exchange · Gold · Copper · Cobalt · Nickel · Arsenic · Canada

Canada NewsWire

Stock Symbol: AEM (NYSE and TSX)

(All amounts expressed in U.S. dollars unless otherwise noted)

Toronto , June 19, 2024 /CNW/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle" or the "Company") is pleased to provide an update on the Detour Lake mine, located in Ontario .

The Company has recently completed an updated mineral reserve and mineral resource estimate ("MRMR") and an updated life of mine plan (the "2024 Life Of Mine Plan" or the "2024 LOMP") for its Detour Lake mine as at March 31, 2024 . The 2024 LOMP builds on the Company's previously filed technical report on Detour Lake (2021) as well as the mine plan update released by the Company in July 2022 (the "2022 LOMP") (see the Company's news release dated July 27 , 2022).

The 2024 LOMP updates the open pit mine production profile and incorporates updated costing. The Company has also completed a preliminary economic assessment (the "2024 PEA") which contemplates the concurrent operation of the open pit and a proposed underground mining project (the "Underground Project"), combined with mill throughput optimization to 29 million tonnes per annum ("Mtpa"). The 2024 PEA demonstrates that the Underground Project and the mill optimization have the potential to increase the Detour Lake mine's overall production to an average of approximately one million ounces of gold per year over a 14 year period, starting in 2030.

"At Detour Lake, the Company continues to build on the unique potential of this world class asset. With the development of an underground mine to complement the existing open pit mine, we see the opportunity to transform the asset into one of the top five gold mines in the world by output. We believe the Underground Project has relatively low execution risk, and has the potential to generate a strong risk-adjusted return on capital while maintaining exploration and production upside for decades in one of the best mining jurisdictions in the world," said Ammar Al-Joundi , Agnico Eagle's President and Chief Executive Officer. "We have adopted a phased and disciplined approach to develop this potential, with the approval of a $100 million investment over the next three years to further study and de-risk the Underground Project, including the development of an exploration ramp and the collection of a bulk sample. Concurrently, we are planning a conversion and expansion drill program to realize the upside exploration potential along the western plunge of the mineralization. The long mineral reserve life and significant production base at both Detour Lake and Canadian Malartic provide a solid foundation for Agnico Eagle's production profile and strongly positions the Company for decades to come," added Mr. Al-Joundi.

Highlights from the 2024 PEA include:

Pathway to produce one million ounces per year at Detour Lake The PEA 2024 delivers on the Company's objectives to increase returns and lengthen the mine life. The Underground Project provides earlier access to a high grade core of mineralization at depth below the reserve pit through underground development and displaces lower grade open pit production to the end of life. The project also sets the stage for future underground expansion along the western plunge of the mineralization The updated MRMR delineates a subset of the mineral resources with a gold cut-off grade of 1.22 grams per tonne ("g/t"), which is amenable to underground mining within, and proximal to, the open pit mineral resource. The mineral resource estimate from the high-grade mineralized corridors totals 1.2 million ounces of gold (19.0 million tonnes grading 1.93 g/t gold) of indicated mineral resource and 7.1 million ounces of gold (107.7 million tonnes grading 2.05 g/t gold) of inferred mineral resource In the 2024 PEA, the Underground Project incorporates in the mine plan approximately 55% of the in-situ high-grade mineral resources, including approximately 0.7 million ounces of gold in indicated mineral resources (9.0 million tonnes grading 2.36 g/t of gold) and 3.9 million ounces in gold of inferred mineral resources (48.5 million tonnes grading 2.50 g/t of gold) Relative to the 2022 LOMP, the life of mine payable gold production increases by 27% to 22 million ounces of gold in the 2024 PEA, including an increase of 0.7 million ounces of gold from the open pit and the addition of 4.0 million ounces of gold from the Underground Project The 2024 PEA assumes an underground mining rate of approximately 11,200 tonnes per day ("tpd") (equivalent to 4.0 Mtpa) starting in 2030, combined with a mill expansion to 79,450 tpd (equivalent to an annualized 29 Mtpa) starting in 2028. Annual production is expected to increase by approximately 43% or 300,000 ounces of gold per year, from 2030 to 2043 to approximately one million ounces per year when compared to average annual production in years 2024 to 2029 The 2024 PEA extends Detour Lake's mine life by two years to 2054. The Company believes that there is a good upside potential for additional exploration to add ounces to the mine plan in future years, which could result in an increase in production in the period between 2044 and 2054 or extend the life of the mine The large MRMR base provides a foundation for the Company's production profile for decades to come

The Underground Project and mill optimization bring value forward and improve valuation Overall, the inclusion of a portion of the large mineable mineral resource, increased mill throughput rate and current high gold price environment contribute significantly to increase the economic value of Detour Lake, more than offsetting inflationary cost increases since the 2022 LOMP The average total cash costs for the Underground Project, combined with the mill optimization to 29 Mtpa, are expected to be $690 per ounce Development capital expenditures for the Underground Project and mill optimization to 29 Mtpa are forecast to be approximately $731 million . Sustaining capital expenditures are forecast to be approximately $631 million over the life of the Underground Project, or between $40 million to $45 million per year from 2030 to 2043 The Underground Project and mill throughput optimization to 29 Mtpa are expected to generate an after-tax internal rate of return ("IRR") of approximately 18% using a gold price assumption of $1,900 per ounce and a C$/US$ foreign exchange rate of 1.34. At current gold prices of approximately $2,300 per ounce and a C$/US$ foreign exchange rate of 1.34, the Underground Project and mill throughput optimization to 29 Mtpa are expected to generate an after-tax IRR of approximately 25% The Detour Lake mine is forecast to generate strong free cash flow through the construction phase of the Underground Project

Phased approach to further study and de-risk the project, with limited investment over next three years The Company has approved a $100 million investment from 2024 to 2026 to develop a 2.0 kilometre exploration ramp to a depth of approximately 270 metres to collect a bulk sample and to facilitate infill and expansion drilling of the current underground mineral resource. Another zone to the east will be tested through a high intensity drilling program in 2025. The analysis of the bulk sample and results from the high intensity drilling program will help validate the continuity of the mineralization and the accuracy of the geological model The exploration ramp will be sized to accommodate a potential production phase and is included in the initial capital expenditure estimate of approximately $731 million

Significant exploration potential to grow underground mineral resources The 2024 PEA is based on a mineral resource estimate which relies on a drill database cut-off as at October 16, 2023 . The Company has since drilled an additional 131,500 metres in 142 holes at Detour Lake to the end of May 2024 in an ongoing exploration program which has returned some of best intercepts to date at Detour Lake. The recent exploration results show potential to significantly expand the underground mineral resource at shallow depth, west of the pit As part of the Company's exploration budget, over the next three years, an exploration program of $65 million will be carried out at Detour Lake to accelerate conversion and expansion drilling of the current underground mineral resource. Exploration in 2024 is continuing to test and extend the western plunge of the main deposit

Continue to enhance value through optimization studies and exploration focus Concurrent with the enhanced exploration program and the development of the exploration ramp, the Company will continue to evaluate the optimization of the open pit, underground mining and mill processes to further improve project returns, including the potential to increase the mill throughput beyond the currently contemplated 29 Mtpa The Company will continue to advance regional exploration activities on satellite targets on the Company's large land position around the Detour Lake and adjacent Detour East properties that could potentially extend the mine life

Detour Lake Technical Presentation

Agnico Eagle's senior management will host a conference call on Wednesday, June 19, 2024 at 9:00 AM (E.D.T.) to provide a technical update on the Detour Lake mine and the Underground Project.

Via Webcast:

A live audio webcast of the conference call will be available on the Company's website www.agnicoeagle.com .

Via URL Entry:

To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/45cKG9E to receive an instant automated call back. You can also dial direct to be entered to the call by an Operator (see "Via Telephone" details below).

Via Telephone:

For those preferring to listen by telephone, please dial 416.764.8659 or toll-free 1.888.664.6392. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.

Replay Archive:

Please dial 416.764.8677 or toll-free 1.888.390.0541, access code 971569#. The conference call replay will expire on July 19, 2024 .

The webcast, along with presentation slides, will be archived for 180 days on the Company's website.

Operating and Financial Parameters Highlights – 2022 LOMP, 2024 LOMP and 2024 PEA

The life of mine totals, from the second quarter of 2024 to the end of life, for the operating and financial parameters of the 2022 LOMP, the 2024 LOMP and the 2024 PEA are set out in the table below.

The forecast parameters surrounding the 2024 PEA were based on a preliminary economic assessment, which is preliminary in nature and includes inferred mineral resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the forecast production amounts will be realized. The basis for the preliminary economic assessment and the qualifications and assumptions made by the qualified persons who undertook the preliminary economic assessment are set out in this news release. The results of the preliminary economic assessment had no impact on the results of any pre-feasibility or feasibility study in respect of Detour Lake.

| LIFE OF MINE TOTALS

Mill at 28 Mtpa | Open Pit

Underground

Mill at 29 Mtpa | | | | Economic Assumptions | | | | | | Gold Price | $/oz | $ 1,500 | $ 1,900 | $ 1,900 | | Exchange Rate USD:CAD | | 1.30 | 1.34 | 1.34 | | Effective Tax Rate (as % of free cash flow before tax) | % | 26.7 % | 27.7 % | 28.7 % | | Production | | | | | | Mine Life | | 2052 | 2053 | 2054 | | Open Pit | | | | | | Tonnes Mined | Mt | 736.2 | 755.7 | 755.7 | | Gold Grade | g/t | 0.77 | 0.77 | 0.77 | | Strip Ratio | t:t | 1.71 | 1.76 | 1.76 | | Underground | | | | | | Tonnes Mined | Mt | — | — | 52.8 | | Gold Grade | g/t | — | — | 2.46 | | Mill Metrics | | | | | | Mill Feed | kt | 781.2 | 818.6 | 871.5 | | Gold Grade | g/t | 0.75 | 0.75 | 0.85 | | Recovery | % | 91.6 % | 91.3 % | 92.2 % | | Average Mill Throughput | Mtpa | 28.0 | 28.0 | 29.0 | | Gold production | | | | | | Open Pit | Moz | 17.3 | 18.0 | 18.0 | | Underground | Moz | — | — | 4.0 | | Operating Costs | | | | | | Minesite costs per tonne 1 | C$/t | $ 21.8 | $ 22.1 | $ 24.9 | | Total Cash Cost* ,1 | $/oz | $ 761 | $ 752 | $ 741 | | Capital Expenditures | | | | | | Total Open Pit Development* ,2 | ($ millions) | $ 1,550 | $ 2,252 | $ 2,252 | | Total Open Pit Sustaining* ,2 | ($ millions) | $ 2,973 | $ 3,601 | $ 3,601 | | Total Underground Project Development 2 | ($ millions) | $ — | $ — | $ 731 | | Total Underground Project Sustaining 2 | ($ millions) | $ — | $ — | $ 631 | | Total Capital Expenditures 2 | ($ millions) | $ 4,523 | $ 5,852 | $ 7,215 |

Note: Capitalized deferred stripping at Detour Lake was adjusted for the life of mine estimates following the integration of Kirkland Lake Gold Ltd, which resulted in the reclassification of approximately $444 million from operating costs to capital expenditures in the 2024 LOMP when compared to the 2022 LOMP. _

| | | 1 Minesite costs per tonne and total cash costs per ounce are non-GAAP measures that are not standardized financial measures under International Financial Reporting Standards ("IFRS"). For a discussion of the composition and usefulness of certain of these non-GAAP measures and a reconciliation of this historical measure to production costs, see "Reconciliation of Non-GAAP Financial Performance Measures" and "Note Regarding Certain Measures of Performance" in the Company's Management Discussion & Analysis for the periods ended December 31, 2023 and March 31, 2024. Unless otherwise indicated, but total cash costs per ounce are reported on (i) a per ounce of gold production basis, and (ii) a by-product basis. For the years ended December 31, 2023 and December 31, 2022, the Company reported minesite costs per tonne, total cash costs per ounce at the Detour Lake mine of C$26 and C$25, and $735 and $657, respectively. | | 2 Sustaining capital expenditures and development capital expenditures are non-GAAP measures that are not standardized financial measures under IFRS. For a discussion of the composition and usefulness of these non-GAAP measures and a reconciliation of these historical measures to production costs, see "Reconciliation of Non-GAAP Financial Performance Measures" and "Note Regarding Certain Measures of Performance" in the Company's Management Discussion & Analysis for the periods ended December 31, 2023 and March 31, 2024. For the years ended December 31, 2023 and December 31, 2022, the Company reported sustaining capital expenditures and development capital expenditures at the Detour Lake mine of $249,765 and $214,060 and $172,903 and $180,072, respectively. |

The major variances between the 2024 LOMP and 2022 LOMP include:

Total gold production – Gold production increased by 4% or 0.7 million ounces of gold primarily due to the replacement and identification of further open pit mineral reserves in 2022 and 2023 Total cash costs per ounce – Total cash costs per ounce decreased by 1%, or $9 per ounce, as a result of the reclassification of $444 million (approximately $26 per ounce) from operating costs to capital expenditures, the assumption of a weaker Canadian dollar assumption, strong cost control programs, partially offset by higher costs associated with three years of inflation Total Capital expenditures – Total capital expenditures increased by 25%, or $1,329 million , primarily due to the reclassification of $444 million in operating costs to capital expenditures, increased maintenance costs associated with higher wear and tear at the mill of approximately $162 million due to the higher throughput rate and the update in costs associated with three years of inflation, partially offset by the assumption of a weaker Canadian dollar assumption

The major variances between the 2024 PEA and 2024 LOMP include:

Total gold production – Gold production increased by 22% or 4.0 million ounces of gold primarily due to the addition of production from the Underground Project Total cash costs – Total cash costs decreased by 1%, or $11 per ounce, as a result of higher gold grades from the Underground Project and lower processing cost per tonne due to the increased in mill throughput, partially offset by higher unit operating cost per tonne from the Underground Project Total Capital expenditures – The increase in total capital expenditures of approximately $1,364 million reflect the development capital of approximately $731 million and the sustaining capital expenditures of $631 million for the Underground Project and the mill optimization to 29 Mtpa

| | | Performance" in the Company's Management Discussion & Analysis for the periods ended December 31, 2023 and March 31, 2024. For the years ended December 31, 2023 and December 31, 2022, the Company reported sustaining capital expenditures and development capital expenditures at the Detour Lake mine of $249,765 and $214,060 and $172,903 and $180,072, respectively. |

Overall, the inclusion of the large mineable mineral resource, increased mill throughput rate and higher gold price environment contribute significantly to the increased economic value of Detour Lake, more than offsetting inflationary cost increases since the 2022 LOMP.

The Underground Project and mill optimization provide the Detour Lake mine with the potential to transform and grow annual gold production from approximately 700,000 ounces per year to approximately one million ounces per year starting in 2030. Over the pre-production period of the Underground project, annual average free cash flows 3 would be of approximately $115 million at an assumed gold price of $1,900 per ounce and a USD:CAD exchange rate assumption of 1.34. The 2024 PEA provides that once the Underground Project is in production, annual free cash flow generation would be expected to increase significantly to an annual average of approximately $650 million . Once the open pit and underground mine would be forecast to end operating in 2044, the mill would be expected to run for another 10 years processing stockpiles. During that 10-year period, the site would be expected to remain a strong cash flow generator with annual average free cash flow of approximately $280 million .

The Company believes that there is a good upside potential for additional exploration to add ounces to the mine plan in future years, which could result in continued mine production and a resulting increase in annual gold production in the period 2044 to 2054 or an extension of the life of mine.

The graph below provides a breakdown of the annual gold production in the 2024 LOMP and 2024 PEA and shows the key operational and financial parameters over the main production phases of the 2024 PEA.

[](https://mma.prnewswire.com/media/2442445/Agnico_Eagle_Mines_Limited_AGNICO_EAGLE_RELEASES_DETOUR_LAKE_PRO.html)

| | | 3 Free cash flow is a non-GAAP measure that is not a standardized financial measure under IFRS. For a discussion of the composition and usefulness of this non-GAAP measure, see "Note Regarding Certain Measures of Performance" in this news release. |

Updated MRMR Estimate at March 31, 2024

The MRMR estimate at Detour Lake has been updated to March 31, 2024 , from the previously released MRMR estimate at December 31, 2023 (see the Company's news release dated February 15, 2024 ). No additional drill results were incorporated into this latest update, which used the same drill database as the MRMR estimate at year-end, with a database closure date of October 16, 2023 .

In contrast with the year-end 2023 MRMR estimate, the MRMR estimate at March 31, 2024 incorporates an improved mineral resource model and includes high grade and low grade mineralized corridors factoring an improved structural and geological understanding. The new mineral resource model provides more flexibility and reliability in ongoing project studies and optimization efforts.