Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle Second Quarter 2019 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Sean Boyd, you may begin your conference.

Thank you, operator, and good morning, everyone, and welcome to our second quarter 2019 conference call. Just to note that this presentation does include some future-looking statements. So there is some material in there that outlines the disclosures and the cautionary statements around forward-looking statements. When we look at the quarter and step back, we're strongly positioned to deliver a strong second half. We expect record production in 2019, again with much stronger operating and financial performance anticipated in the second half is -- and as we go forward into 2020, we would anticipate further growth in production, as we ramp up our two new operations in Nunavut. In the second half of the year, we also expect a decline in our capital spend. In the first half, we spent about $414 million. Based on our forecast, we anticipate in the second half spending a little over $330 million. So combined that decline in CapEx spending with a stronger cash-generating business with the growth in production, we're in a strong position to generate a free cash flow in the second half of this year. Overall, as we move forward, the emphasis will continue to be on moving at a measured pace with steady growth in gold production on a per share basis and also cash flow on a per share basis. Just looking at the second quarter highlights. As we said, a solid result from an operating and financial standpoint, we produced a little over 400,000 ounces of which 32,000 ounces were pre-commercial production ounces at the two Nunavut projects, our cost per ounce a little over $650 on the ounces that excluded the pre-commercial ounces. So good solid performance. The Meliadine mine, as we announced in May, achieved commercial production ahead of schedule. It's produced pre-commercial production ounces of…

[Operator Instructions] And your first question comes from the line of Fahad Tariq from Credit Suisse. Your line is open.

Hi, good morning. Thanks for taking my question. On Meadowbank is there a potential to extend the mining into Q4 even whether it's the Portage pit or some other deposits? And what does the cost profile look like for Q3 2019 at Meadowbank? Thanks.

This is Yvon here. We will not extend past Q3. Portage will finish mining at that point. As far as Q -- as far as cost numbers, we'd have to get back to you. And I don't want to have that fresh in my head.

Okay. And just as a follow-up so it looks like the Portage pit that added on to the Meadowbank or production for the year which offset the lower Amaruq. When was this like when was the decision made to mine this was as always part of the plan? Or was the only when Amaruq was delayed?

No, the pushback in Portage have been planned in sequence over the last almost two years actually. And this latest pushback also came with some wall stability issues that we also took and by doing a lot of bit stripping last year. So, all of this was planned. We've had a little bit -- part of the surprise on the grade that's come from Portage itself with better grades, but mostly also better grade from the surface stockpile. So, we're out there.

Okay. Thank you.

And your next question comes from the line of Mike Parkin from National Bank.

Thanks guys. Congrats on a good quarter. Just had a follow-up on that next awards. You mentioned that you've got the permit to this -- deposit Amaruq tailings into the old pits of Meadowbank potential to save on sustaining capital. I was looking if you could give us any kind of color in terms of what that could be in terms of annual savings on the sustaining CapEx?

Well, I think it was more -- at this stage, it's more a saving on Amaruq project costs in general because the -- at this stage we're at with the current tailings we're allowed to do about two more two more raises per year. Each raises are typically minimum of $4 million to $5 million where we would have reached very quickly the capacity of the current areas. And we would have likely had to build a new area and permit a new area and that would have been quite expensive. So, that's the -- I think the what we refer to in the savings it's mostly around that. There's also a pretty sizable benefit and opportunities around optimizing our closure plan by using the pit and we are delaying some of the closure cost overall in the site. So, those are mostly -- it's hard to put a number to this at this stage but it's mostly related to these factors that I just enumerated.

And do you have a sense that the open pit poll on the ground has more than enough capacity from what you're thinking in terms of processing at Amaruq at this point? And is that two time capacity?

Both pits Santa Gertrudis and Portage will greatly exceed the current knowledge of resource that we have on the project at this stage.

Great. All right, that's it for me guys. Thanks so much.

[Operator Instructions] And your next question comes from the line of Anita Soni from CIBC. Your line is open.

Good morning guys. I just have a question with regards to Amaruq looking forward into 2020. So, it looks like given the production shortfall being made up by Meadowbank of about I would guess 30,000 to 40,000 ounces. Do you expect that to be made up whether in 2020? Or would there be any additional ongoing impact? That is to say the guidance that you have for next year of about 2.70 at Amaruq, is that still solid?

Well, I think it's safe at this stage. We do -- we'll be going into our budget exercise and we'll review the mine plan as to where we're at but at this stage we're pretty comfortable with next year's guidance.

Okay. And then just a quick question on the LaRonde zinc grades. So those are pretty good grades this quarter. I'm just wondering is that sustainable? Or was that a one-time blip? I think it was double the guidance that you had for the year.

You'll see some areas mostly in the western pyramid I believe that we've encountered some stone -- some stopes in fringe areas where the zinc rate has been in the 3% to 4% range. So when these stopes appeared a plan like we are currently appearing in July. So you'll continue to see some of that, but don't take it as granted that this is a life of mine issue. It's more of a local area at this stage.

Okay. And lastly on LaRonde costs, they were rather high this quarter. Was that related solely to the shutdown? Or are there any issues that are -- that we should be aware about moving forward with that?

No. The shutdown was basically unplanned in the sense that we needed to rehabilitate the ore handling system. The daily tonnage from the mine was significantly lower because of that. And that was the main cause of the cost per tonne. I think going forward I think we can expect to go back to guidance levels on the cost structure.

All right. Thank you so much.

And your next question comes from the line of Carey MacRury from Canaccord. Your line is open.

Hi. I just had a question on Meliadine. Just wondering what the mining rate was in the quarter? And how you expect that trend over the balance of the year?

I don't have the exact number of what the mine rate was in the quarter at this stage. We're mining roughly about 90,000 tonnes per month. And we're expecting to ramp up further over the next quarters where we expect it to add a fourth mining horizon probably in September, and I will push the daily tonnage from the mine to somewhere around 3,250 tonnes, 3,300 tonnes going forward for the rest of the year.

Okay. Great. Thank you.

And your next question comes from the line of Tanya Jakusconek from Scotiabank. Your line is open.

Great. Good morning everybody. Just have some technical questions maybe for Yvon, if we can come back to Amaruq. Just wanted to ask on the -- just on the critical path that from now until we start to the commercial production, is it just the dewatering. I mean, the trucks, I guess, you have another set coming on a barge, but is it just the dewatering and the stripping? I'm just trying to understand what's left?

Yeah. Well, dewatering is the portion of it. We've had delays in getting the second half of the pit dewatered. That is underway. It will be done by mid-September. This has had some impact to some of the current mining areas. And the big issue at this stage has been mostly footprint and the inability to bring up total broken inventory in a pit. So as the pit areas are getting dry now, we'll focus on bringing up that inventory. So over the next six months, we'll ramp up from a daily rate of were about 45,000 tonnes per day now to probably around 90,000 tonnes per day for the rest of the year. So it's really the inventory. And the second hurdle rate is, you're right about the long-haul trucks. We have several of them that have been delivered. They will be commissioning of that the remaining units will be most of the main reasons around the challenges, I guess, for the rest of the year.

Okay. And so I got it then Yvon we won't have a stockpile to start or as we put through the mill.

We'll have some stockpile at this stage. And the ramp-up curve or the ramp-up flexibility will be further validated in Q2, Q3. But after commercial production at this stage, our planning is currently showing that we will have stockpile on hand.

Do you know what size of the stockpile you're anticipating to have for start-up?

I won't go into numbers at this stage.

Okay. But there will be some sort of stockpile?

Correct.

And then just on the underground, the decision to go ahead would be made at the same time in February of 2020 when you put out all of the details.

Correct. Yeah. We've sort of -- with the exploration results so far at this stage, we're confident enough to accelerate a bit the development. We've also started the underground exploration program -- the drilling program from underground, as we continue also drilling from surface. And we're finalizing the details on the mining plan part.

Okay. And then maybe just on Meliadine, Yvon. Just on pyrrhotite and what -- in terms of improving the production -- sorry -- the recovery there in terms of being able to get the blending done. How is that looking in terms of how it goes through for the rest of the year? Are you going to have enough stopes open to start blending?

Yeah. I think the broken inventory as we're operating now currently in July is about anywhere between 30,000 to 50,000 tons per tons underground. Several stopes that are in the making stage, so we have that flexibility now. I think as we've processed more siliceous stopes in the early portion, we've had several months that recovery was in the high 95s. Once we start introducing some of the higher grade pyrrhotite stopes, we've had more challenges with those. So we're in the process of adapting the ground, because the plant has got quite a lot of capacity. So, we will over grind some of these sulfide zones that have created some chemical issues in the plant and we were sort of tight on reagents. So, we've held off a bit on higher grade stopes, and we're going to proceed moving forward as we've received -- made modifications to the grinding area and they receive reagents to optimize further. So, we're okay on this work.

Okay. And then just maybe one last question just on the spend. I think, Sean, you mentioned there's another $330 million to go for the second half of the year. I haven't had a chance to go through everything. What's left to be spent at Amaruq?

I'll have to get back to you, Tanya, on that part. I don't know the exact number at this stage.

Okay. And then maybe if -- just another financial question. Just on the working capital adjustments, we've had quite a bit of outflow in the first half of the year. Do we start seeing the working capital adjustment reverse in the second half, how do you see that playing out?

All right. Yeah. Tanya, it's obviously very volatile. Pretty hard to predict and this particular quarter we had a large buildup of accounts payable. Obviously, we're going to run that down during the quarter. But it's too hard for me to predict. In fact, when I looked at it years ago, I decided to model it in our financial scenarios as zero, because it was just a positive, negative, positive, negative. So, I can't give you a real answer. Sorry.

Okay. All right. So, maybe just the capital spend left that Amaruq would be great. Thank you.

Tanya, just on the stockpile at Amaruq, it's around -- at the end of the quarter, it's around 290,000 tons. And it's a grade of about 3.5 grams. So, the decision was made to run Portage not run that. We'd rather start running that as we get through Portage and get more flexibility in the mining plan as we dewater the pit and open up new areas in the pit.

Yeah. It was more than anything it's just the flexibility, Sean, that if we were to have other weather issues whether we have a stockpile that we could start them out?

Yeah. We can. And so we could start that up now and get to commercial production earlier, but that really doesn't do much for us.

Yeah.

So, we're just trying to build in flexibility in the plan.

Yeah. No, I appreciate that. Thank you.

And there are no further questions at this time. I will turn the call back over to Mr. Sean Boyd for some closing remarks.

Thank you, operator and thank you everyone for participating in the call. And again, if you would like to attend our site visit in August, please reach out to us. Thanks again.

This concludes today's conference call. You may now disconnect.