Good day and welcome to the Agnico Eagle Mines Limited Q2 2014 Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Sean Boyd, President and Chief Executive Officer. Please go ahead, Mr. Boyd.

Thank you, operator and good morning, everyone and thank you, for joining, our Q2 conference call. I’d like to start with going through some of the highlights of the quarter and then we’ll take you through our operations while also talk about exploration results this quarter because we did put out an exploration update along with our quarterly numbers and results. If we look at the second quarter and the first half we saw record production and also record safety performance and if you look at the quarterly cost per tonne at our mines essentially all the mines are operating at a cost per tonne level that’s below budget, so excellent results and it’s a credit to the hard work and focus of all of our employees. Another highlight of the quarter was the joint acquisition with Yamana Gold of Osisko Mining completed in June. I’ll spend some time on that during the presentation and talk about where we are and where we’re headed with that asset. But I’d also like to welcome in the room today with us is an old friend of ours Daniel Racine who is now with Yamana Gold as a Senior Vice President on their Canadian operations and helping them on the operating side and we’re working in our teams working closely with Yamana and Dan on the Canadian Malarctics asset. So as I said I’ll talk a bit more about that in the presentation. We also did increased our guidance and absence the addition of Canadian Malarctics we did see an increase in the ounces being produced out of the Agnico Eagle Mines as we indicated earlier this year we will be updating the guidance which we did and essentially pre-Canadian Malarctics we are seeing our production estimate for this year go from a…

(Operator Instructions). Your first question today will come from Andrew Quail with Goldman Sachs. Please go ahead.

Just a couple of quick ones. Firstly, on Kittila, obviously tonnage went down, inventory went down. Can you give some guidance, going forward, on if you see that rebounding over the next couple of quarters, and especially say something about recovery into 2015?

I think recovery for 2015 in second half may be a bit challenging as you’ve seen in the second quarter will be probably in the low 80s, little while we’ve had some water or management issues and water quality issues that is bringing some recovery upsets. We’re investigating because we’re seeing other areas, but at this stage we feel that by the end of the year we should be back on track. As far as the guidance is concerned with the two tie-ins the loss production has occurred but we’re going to be advancing that going forward with the stronger throughout rates. So we’ll be in the very low end of the guidance that was published earlier in the year.

For Kittila, Andrew I think in terms of that specific asset we’re probably down about 10,000 to 13,000 ounces with some of these issues, but that’s more than made up by the other mines and that’s reflected in the updated guidance number that we put up.

And looking at the southern business, guys, if I look at, I suppose, both Pinos Altos and La India, look, sort of on a CapEx, or sustaining CapEx basis, do you think we can sort of use that run rate that you guys are at in the second quarter to sort of extrapolate out through the end of the year and into ‘15, especially coming about La India now, you're sort of at more of a steady sort of state. Is that reasonable to assume?

This is Tim. I think it’s reasonable with the caveat that we’ve got some CapEx that’s not sustaining and not sure how it’s broken out there and we’ll have a little CapEx at La India for a leach pad expansion next year and we’ve got the shaft CapEx at Pinos Altos this year. But the sustaining, that should but pretty flat.

And last question is tax-related, guys. Just you know, can you give some guidance around what is best to use going into the second half, and maybe guidance around the full-year for FY 2014, effective tax rate?

Andrew I think we provided that guidance in the press release and we are seeing 35% to 40% overall. And the reason that that is a little bit lower than it previously was is because a large part of the operating profit so far this year has been at Meadowbank, which is effectively shielded. And there is not a lot of tax being paid through that Meadowbank profit.

Please go ahead Mr. Haughton, your line is now open.

Yes, good morning, and thank you, Sean and Tim, for the update. Just following-on on the Kittila, it's pretty good that you've been able to get the extra throughput out of the mill expansion, getting out to 4,000 tonnes a day, but the challenge there is really whether the mine can match that. What's your expectation of the mine being able to get up to that level?

Well, I think the plan with the expansion was to process in the next two years the available lower grade stockpile in service. We’ve got 400,000 tonnes to 500,000 tonnes accumulated since the beginning. And the expectation at this year is for the mine to ramp up to that 3,750 rate by 2016.

Okay, that still gives you some extra capacity in that plant. Would you be thinking about improving the underground production rates to be able to fill that level?

Well, I think by pursuing the development in the Rimpi zone down the road we’re also modifying or adapting the mine plant currently to provide more mining rising to increase flexibility in the mine. But the better flexibility down the road will occur in ’17, ’18, once we start getting into production from the Rimpi zone.

All right. Now, at one stage, there was potential to have almost a step change expansion there, but it was contingent upon possibly getting a shaft in. is that still part of the thinking in the medium to longer term at Kittila?

Well, I think it’s still out there going forward but I think in the next two or three years we’ve decided to focus on the Rimpi deposit in the access to it because that will provide more mining flexibility having more ramps will provide also more better access. So, the economics of the shaft are not as solid until we get more I guess result adapt on the reserve side. And there’s actually no rush at this stage to implement the shaft other than to accelerate the exploration strategy and our exploration ramp is providing that access presently, so it’s a good compromise.

It’s more David a capital allocation question at this point as we look at a number of opportunities that we have. And as Yvon said it’s not essential that that shaft begins now because we can still see the ability to increase production at Kittila over the next four to five years by accelerated ramp development and getting at the Rimpi zone which is better grades and some better thicknesses.

Yes. Just switching now back to Meadowbank, interested to hear your expectation of 90,000 ounces per quarter for the balance of the year, then 100,000 to 110,000 next year. Would it be right to think that next year is mainly driven by grade?

Well, next year will be mainly driven by mining in vault which is typically lower in the reserve grade and mostly higher grade by getting some of the pushback or the dash get in the south side. So the grades will be coming more strongly next year from the Portage section and not necessarily from Goose which will be terminated by the end of the year.

All right. So basically, the pushback would get you access to some of the really good material that you got earlier this year, in sequential benches through ‘15?

Well, that’s correct. As far as stronger grade in Portage in tonnage throughout the year but not in comparison to the grades we’re getting this year in Goose. So I think that’s the correction.

Okay, thank you Yvon. Thanks Sean.

Your next question will come from Steve Parsons with National Bank Financial. Please go ahead.

Yes, good morning, thank you. Actually, David asked most of my questions, but just to continue on with the grade, look at the grade at Meadowbank. Is there potential for that high-grade chute at the Goose pit to extend that you’re able to push a couple of benches down and get back in there and get that chute?

Well, I guess on the pit side the economics of pushing the pit further is not economically. Secondly, we looked at the small underground project and now driving a ramp to try to see if we can make some economics out of the continuity and unfortunately the grade is very interesting but the tonnage is not enough to suffice economics. So we’ve abandoned that idea for now.

Okay, very good. That's it for me. Thank you.

Your next question will come from Anita Soni with Credit Suisse. Please go ahead.

Hi. Most of my questions have been asked. I just wanted to confirm, were you talking about with the Portage pit grades next year, I think, Sean, that you had mentioned that it was about 100,000 to 110,000 ounces per quarter in 2015 out of Meadowbank. Is that correct?

That’s correct.

All right. And then, also, could you just talk about the labor cost reductions that you've been seeing? I noticed that some of the unit costs were down, and you had sided labor costs reductions, and could you just fully elaborate on that?

Well, I think we went through rationalization of contractor costs last year mostly in the fall. I think our cost on the rest have not necessarily gone down except in certain areas on some smaller benefits package. But I think the demand aspect as we’ve adopted a more longer term approach to attrition and try to minimize level of staffing to its minimum. So I think that’s more the results from this year on that aspect.

Maybe just more big-picture, are there any similar types of things that you see on the horizon you can see in terms of unit cost benefits at any of the assets?

Well at this stage we’re pretty happy with the initiatives that have been driven at sites from each GM and their teams. They’re continuing in that aspect, I think in the last 1.5 year, two years they have continued on a cost return basis to continue and we’ll continue to take that long-term approach to that and we’re pretty happy with the performance from the sites in that respect.

Your next question will come from Mike Parkin with Desjardins. Please go ahead.

Just a couple of questions. You mentioned in the press release that the seasonal cost at Meadowbank has been deferred to the second half. Can you give an idea of what that means on a per-ounce basis, or millions of dollars?

I don’t have the exact number with me but I think in the past we’ve budgeted seasonally for some reasons we budgeted on a yearly basis for now. So I think the seasonal barge season and specifically on this but it’s between probably 6 million to 8 million or 9 million.

One other question, just with La Ronda, I guess with our wonderfully cool summer here in Canada, the cooling plant probably hasn't been tested to its maximum level, but how has that been running so far?

Well I think the second quarter startup of the booster fan has been completed the ventilation network and presently we’re running not at full capacity on all the compressor systems. So we’re quite happy with the performance of the plant and as you have said the summers are performing better than expected. But the plant is presently on stream to deliver the goods for their rest of the deeper development for quite a while.

And just last question, with the water issues that were mentioned on Kittila, can you just give a bit more color on what's the biggest issue there that's impacting you?

Well there is two or three reasons that are still under investigation, so I’d rather not get into too much details but in the past we’ve run into difficulties with re-circulating water from the pond and interference thiocyanates within the oxidation process. So for the best of knowledge that’s where we’re now but there are other contributing factors that we’re investigating, that’s about all I can at this stage.

Your next question comes from Stephen Walker with RBC Capital Markets. Please go ahead.

Just a couple of things. First of all, the IVR discovery north of Meadowbank, 50 kilometers, is that as the crow flies? What is the potential infrastructure like to get up there, and at what stage is it at? This is obviously relatively new, but sounds like it's coming together pretty quickly. Can you give us a little more background on -- I guess maybe what I'm asking is when that could potentially be, or if it could potentially be transported to Meadowbank?

Well it’s still early Steve, but seems I think you’re right things are moving quite quickly and there is probably another update coming within the next several weeks on that. And given some of the things we’re seeing. So we’re actually surprised with some of the explorations results. I think the way we have approached it now is our guys are saying that in order for it to be viable in terms of being able to ship. We probably need to see about a million ounces which creates sort of 5 gram. So that’s still very much possible although it is early. So all we’ve really done is add a $5 million program, allow ourselves to drill likely through the end of September, certainly by the middle of October you have to be out of there given the fog and the fact that you’re moving everything by helicopter. But in order to make it work it would be a road from Meadowbank. But we sort of need a rough sort of million ounces at 5 grams to make it work. So still early, but things are actually moving quite quickly there. We’ll have some samples, there is trip to Meliadine on August 26th, but I think there is a couple of slots left. We will be sort of featuring IVR as well have core there and some samples that we’ve collected on surface as well.

Is there potential for a year-end resource estimate, or is it still too early for that?

It’s probably still too early, although we’ve got about 20,000 meters going in this next phase here. So that’s a lot of drilling because these are in deep holes. It was section et cetera and drill holes plotted on the 26th of August at Meliadine.

Just to change gears a bit, David, the move to reporting under IFRS, is there a regulatory reason, a tax reason, for that? Is there -- why the decision now, and not previously?

It’s basically just through their comparability with our peer companies, everyone is going there eventually and we didn’t see any reason to be the loan one holding on to U.S. GAAP.

Okay, thank you for that. And maybe Sean, yourself, and again, Danielle if wants to add in, when you, it's been six weeks now since you've basically stepped onto the Canadian Malartic property, what if any, surprises, positive or negative, has come out of that initial six-week period that you've been on the property?

Well, I think from our perspective we were actually through our due-diligence looking at higher cost per tonne, particularly in the early years than what Osisko was modeling in their life of mine, and so we’re essentially seeing that as we put out our guidance. So our job now is to use our sort of collective efforts and expertise in certain areas to bring that down but also to use our efforts on the environmental and permitting side to continue to move the Barnett opportunity forward. So the transition has actually gone very well the teams are working well. And we’ve been fortunate from our side to be able to have some particular expertise at Meadowbank where that team has dealt with some of these issues. And the way we always looked at Canadian Malarctics in terms of the time line and a progression is that we saw some of the things that they’re dealing at Meadowbank a couple of years ago. And so you can see Meadowbank’s cost per tonne performance cost came down from about $100 or more down to the low 70. So, our focus is certainly on optimization but cost control overhead control but also to help us increase the throughput there which would make the mine more efficient and also help unit cost.

The current cost of CAD21 a tonne, I guess is it the hardness of the rock? Is it just the awkwardness and having to use the smaller blast hold drills on the north side of the pit? What are the drivers or what are the main sort of moving parts to that per-tonne cost?

Higher strips ratio, right now. So that gets better as we go forward. So the mine after two or three years the cost go down just because the strip ratio goes down. So I’ll turn it over to Christian Provencher who sort of represent our side on the ground up there and he can provide a little bit more detail.

Good morning. As Danielle mentioned this morning at the Yamana conference call for sure the cost for year-end was risen by mainly an old pit that was introduced in the budget this year that was not budget just to gave like Sean mentioned earlier better flexibility on the mining side so with the higher strip ratio for this so it was not budget. For sure, some cyanide costs and fuel costs that we have to add to the budget relate mainly to the Goldie pit addition in the plant for this year.

Has there been any change in the internal waste in either of the pits, either Goldie or the existing? Has there been any change in the internal dilution increase?

No, there is no change in the number since over that (Ph) but so we’re looking to do the optimization of the life of mine this fall so to be able to provide some new number this fall.

Great, thanks very much for that. That’s all my questions.

Your next question will come from Patrick Chidley with HSBC. Please go ahead.

Good morning, everybody, just a quick question back to Malartic. The cash costs are guided here $695, so nearly $700 an ounce, and I just wanted to find out what is the all-in sustaining cost on that basis going to be this year?

It’s probably in the range of about $900 to a $1,000, and it depends on sort of capital that’s gone up a bit because we’ve added about $40 million to the capital side so that’s probably closer to the $1,000 number.

And all that capital that you've talked about this morning, that's going to be operating capital, let's say, that's included in all-in sustaining costs.

That’s correct.

All right, okay. And then, moving forward, do you expect that to come down, or what's the sort of longer-term outlook? Or do you still need to do your analysis?

No, that will be coming down.

Okay. And that's because what, because grades are going to go up when you get to the Barnet side or?

In a cost basis less stripping.

Okay. Strip ratio's 2.6 to one this year?

Yes, going down to about 2.

In 2015?

2.1, over time over the next two to three years.

And just if you could comment on the Yamana call this morning, someone mentioned that there was a legal dispute about what's known as the Odyssey zone, and I'm wondering what your sort of initial impressions on that are?

Well because there is a dispute there is not much we can say about it at all.

Your next question will come from Tanya Jakusconek with Scotia Bank. Please go ahead.

Just wanted to ask a question to Yvon and Tim if I could. Just on Kittila, so that I understand correctly, as we go through next year, that greater 1,000 tonne per day higher rate, is it safe to assume that the previous guidance that we had was assuming just half a year, and then I think we would have assumed a better recovery since we didn't have this water issue. Is that correct?

Yes that’s correct. And I think in the previous guidance that we put out on the market we’re expecting the full commissioning of that new capacity in Q3 of 2015. So we’ve essentially advanced this almost three quarters.

So, three-quarters, and yet I should then assume, though, a lower recovery because of the water?

Well at this stage I think it’s premature to do that, as we try to identify what’s happening because some of the issues seems to be seasonal. So as we know more we’ll provide that information going forward.

And maybe just to finish off on Kittila, just the stockpile that you have, the 400,000 to 500,000 tonnes on the surface, maybe just the grade on that that you're going to be processing over the next two years.

I don’t have the exact number with me but it’s probably in the neighborhood of about 3.5 grams per tonne.

I think that's on Kittila. Just on Meadowbank, if I could, you mentioned that we're going to be in the Vault and the Portage pit next year and hence the 100,000 to 110,000 ounces per quarter. Are we going to continue that into 2016, the Portage, or do we phase that out and go just to the Vault in 2016?

We will be mining in Vault and Portage in ‘15, ‘16 and ‘17 as well. But we’re going a larger proportion of Portage next year and probably a larger proportion of Vault in ‘16.

And can you just remind me, because I have the Vault's grade, I just don't have the Portage grade?

I don’t have it off hand but it’s above reserve grade in the Portage.

It's not the five grams per tonne that we saw in the Goose. Would it be in the four gram range, or -- because life of mine I think is 3.23 -- sorry, the reserve grade.

It will be slightly above reserve grade Tanya.

And Vault’s about 2.8?

That’s correct.

And maybe if I could ask Tim, I think Sean mentioned that there's upside in the South American unit, I think it was mentioned Pinos Altos, when we get the new guidance in Q3. Are we looking at it as Pinos Altos where we're currently mining, or is it the addition of satellites that you're seeing?

Our upside in Mexico as compared with our previous guidance is probably going to come from both Pinos Altos and La India and those are just going to be efficiency a little bit more efficiency maybe than we’ve forecast last year a little bit more throughout Pinos Altos, Creston Mascota, and La India.

So it's not any additional satellites? Because I think there's some upside, too, in satellites.

Yes not yet, I mean we’ll get to the satellite in their order but not in 2015.

Just a follow up on that Tanya, we haven’t provided the mine by mine guidance for 2015. So all we provided on earlier this year was a number of 1250 pre Canadian Malartic. So we’ll be able to break that down as we get through our budgeting process.

No, I'm just trying to understand myself, Sean, as I look at the news coming out, like, where are we looking for some of these upsides to come from, and just make sure that I understand the grades and where some of these things could come.

(Operator Instructions). And we seem to have no further questions at this time. I’ll turn the call back over to management for any closing comments.

Thank you operator and thank year everyone. And just another reminder for upcoming mine trips. So Meliadine, August 26, we’ll have an update also on IVR project there Canadian Malarctics with our partners Yamana on September the 30th and we also have a key Kittila trip in November, that’s tied in with London Mining Conference of RBC. So, if there is interest in those trips, please let us know. Thanks again.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation. You may now disconnect your lines and have a great day.