Agnico Eagle Mines Limited (NYSE:AEM) Q1 2025 Earnings Call Transcript

Agnico Eagle Mines Limited (NYSE:AEM) Q1 2025 Earnings Call Transcript April 25, 2025

Operator: Good morning. My name is Judy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle Mines Limited Q1 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, you may press the star followed by the number two. Thank you. Mr. Ammar Al-Joundi, you may begin your conference.

Ammar Al-Joundi: Thank you, operator. Hello, everyone, and thank you for joining our first quarter conference call this morning. We are pleased to be sharing with you another strong quarter with solid results across the board. Strong production, excellent cost control, record financial results, excellent progress on our growth projects, including our five key value drivers, and some really great exploration results at a number of our mines. Before we jump into the call, I would like to remind everyone that we will be making a number of forward-looking statements, so please keep that in mind. As we go through the results of the quarter, there are three key messages we want to emphasize. One, we continue to deliver strong overall performance and we are well positioned to continue to deliver that performance for the rest of the year.

Two, and three, we are making great progress on building the foundations of our future growth and future value creation for our owners. Starting with our first quarter operating and financial performance. In a year where gold prices have increased by over $1,000 an ounce, our gold production of 874,000 ounces and our cash costs of $903 per ounce were almost identical to our production and cost numbers in the first quarter of last year. This means we are delivering the full benefit of these rising gold prices to our owners. That is why our owners invest in us and that is our job to deliver. We do this by delivering solid production, and controlling costs safely, responsibly, and reliably. Not surprising, with good operational performance and record gold prices, we continue to deliver record financial results.

Record operating margins, record adjusted net income, and not just on an absolute basis, but also record adjusted net income on a per share basis. It is the per share metrics that matter and it is the per share metrics that we will always focus on. The second key takeaway is our progress in strengthening the business. This quarter, we have returned $0.25 billion to our owners through dividends and share buybacks. At the same time, we have invested in moving forward the best pipeline in the business. We have made record investments in promising exploration and we have largely eliminated our net debt. We continue to generate record cash flows and we are well positioned to further increase returns to shareholders. Jamie will be going through our financial performance shortly.

The third key takeaway, building the foundations of our future growth, is really the most important and the most exciting takeaway from today’s call. An essential element of any quality business is sustainability. This is especially true for a company like Agnico Eagle Mines Limited where our core strategy revolves around building a long-term, high-quality, sustainable business in the regions in which we operate. We are proud to have just published our sixteenth annual sustainability report, the highlights of which Carol Plummer, our EVP People, Environment and Sustainability, will briefly review in a minute. A little later in the presentation, Dominique Girard and Natasha Vaz will speak about the steady progress we continue to make on our five key value drivers.

Number one, our ongoing work to get Detour to over a million ounces a year. Number two, our vision to get Malartic to over a million ounces a year. Number three, excellent construction progress at Upper Beaver, a brand new mine in a great region that could add over 200,000 ounces a year. Number four, continued great drill results and accelerating on-site activity at Hope Bay with a target of over 400,000 ounces a year, and finally, five, continued good progress at San Nicolas, a high-grade, high-return copper project in the best mining jurisdiction in Mexico. And finally, Guy Gosselin will spend a few minutes highlighting some of the really excellent and exciting exploration results our team is delivering at some of the most promising ore bodies in the world.

With that, I will turn over the presentation to Carol.

Carol Plummer: Thank you, Ammar, and good morning, everyone. Our 2024 sustainability report highlights our global approach and regional focus. Starting with safety, we continued our journey towards zero accidents, focusing on visible self-leadership in the field, and identifying and mitigating risks. 2023 was the best year for safety in the company’s history, and in 2024, we did not do quite as well. However, all of our sites are focused on reducing harm, and we will continue to focus on safe work in every job, every day. Our approach to climate change continued to focus on energy efficiency, technology transition, and increased use of renewable energy, and we remain amongst industry leaders with a GHG intensity of 0.38 tons of CO2 equivalent per ounce, well below the industry average of 0.79.

Ammar Al-Joundi: We are working to meet our commitments to reconciliation through the seven pillars of a reconciliation action plan. We are focused on training and developing our employees, listening, and resolving concerns, and engaging frequently. Preparing our employees and our sites to succeed. We are very happy to see improved engagement through our employee survey and importantly, low turnover rates. And with that, I will pass over to Jamie Porter.

Jamie Porter: Thank you, Carol, and good morning, everyone. We had a great start to the year with another quarter of strong operating results and excellent cost performance, pairing with higher gold prices to drive record financial results, including record revenue of $2.5 billion, record adjusted earnings of $770 million or $1.53 per share, and record adjusted EBITDA of $1.6 billion. Gold production in the first quarter was approximately 874,000 ounces, a total cash cost of $903 per ounce, and all-in sustaining costs of $1,183 per ounce. Gold production was very similar, as Ammar mentioned, to the first quarter of last year. I am pleased to report that costs were below the low end of our guidance ranges and actually right around where we were in the first quarter of 2024.

The lower than expected cash costs were primarily due to higher than expected grades driving higher gold production at several of our mines, as well as the cost benefit from the weaker Canadian dollar relative to the US dollar when compared to our budgeted assumptions of 1.38. These cost benefits were partially offset by higher royalty costs related to higher gold prices, and in a rising gold price environment, we do expect the burden of royalty costs to continue to increase. Every $100 increase in the gold price increases our royalty cost by approximately $5 an ounce. For the full year, we are maintaining our cost guidance and expect cash costs to be within the guided range of $915 to $965 per ounce. All-in sustaining cost per ounce were lower than the guided range, primarily due to the timing of sustaining capital spend.

We are expecting higher all-in sustaining costs in subsequent quarters and expect to be within our guidance for the full year at $1,250 to $1,300 per ounce. We are very proud of the work our teams have done and their continued efforts at controlling costs and continuous improvement. As our all-in sustaining costs continue to be hundreds of dollars per ounce below those of our peers. If we move on to the next slide, I am pleased to report that the strong free cash flow we generated this quarter allowed us to continue to strengthen our balance sheet and increase our financial flexibility. We ended the quarter with close to zero net debt. As a reminder, we started 2024 with approximately $1.5 billion in net debt. We have significantly deleveraged the balance sheet over the past fifteen months and intend to continue to strengthen the balance sheet and improve our financial flexibility while increasing returns to shareholders.

We were also pleased that Moody’s revised its rating outlook for the company during the quarter from stable to positive, which reflects our improving credit profile and strong financial position. We generated $594 million of free cash flow in the quarter, which was net of significant working capital outflows, including tax installments and payments of over $500 million. At current gold prices, we would expect significantly higher free cash flow in subsequent quarters. We move on to the next slide. Looking back at 2024, we clearly prioritized returns to shareholders through dividends, share repurchases, and the reduction of net debt. Shareholders benefited directly and indirectly by approximately $2.2 billion. In 2024, we returned approximately 43% of our free cash flow directly to shareholders through dividends and share repurchases.

This quarter, we returned approximately 42% of our free cash flow. Our capital allocation plan is designed to benefit shareholders in a rising gold price environment in several ways. We will continue to strengthen the balance sheet, increase our financial flexibility. We believe that a strong balance sheet is a competitive advantage in this industry. We will also continue our program of strong shareholder return through the quarterly dividend and share repurchases. At these gold prices, we see the potential to further increase shareholder returns and expect to be much more active on the share buyback. We will also continue to reinvest in the business by allocating capital to high-return internal growth projects and high-potential exploration opportunities.

At current gold prices, we are generating a lot of cash, but we will remain disciplined to continue to take a measured approach to capital allocation with a focus on increasing returns to our shareholders. With that, I will turn the call over to Dominique Girard, who will provide an overview of our Quebec, Nunavut, and Finland operations.

Dominique Girard: Thank you, Jamie. Good morning, everyone. We finished the quarter strong out of the gate, driven by operations meeting their target safely and helped with geological upside at Laram and at the Malartic pit, where additional ounces were discovered around the old workings. In Q1, Meliadine achieved a new tonnage record following the year made expansion, averaging 6,200 tons per day. On the cost side, as Ammar mentioned, the quarter was excellent with stable to slightly better costs than expected, thanks to the team’s continued effort to improve productivity. This quarter, I would like to highlight Kittila’s progress, focused on the shop utilization and systematic productivity and cost efficiency improvement. We are starting to see positive results from this initiative, with cost per ton coming in 5% below target in Q1.

Looking ahead, there are three key projects that I would like to highlight today. These projects are closely tied to Ammar’s comment about leveraging our assets to create value. The first one is the Meadowbank potential expansion. We continue working to extend Meadowbank’s life of mine beyond 2028. Our objective is to transition Meadowbank mine into an underground mine only after the pits are depleted, aiming to add five to six years of production at around 150,000 to 200,000 ounces per year. Given its location in Nunavut, this will not be the lowest cash cost ounces, but in today’s gold price environment, and the low risk associated with this, we are evaluating different scenarios and expecting preliminary findings by the end of this year.

On top of that, the team is also working on a new scenario of doing a small pushback at the IVR pit to financially unlock additional ounces in 2028-2029. Recognizing this potential, our site team is actively developing a plan to maximize Meadowbank’s potential, creating a seamless bridge to future production at Hope Bay, which is my next project to discuss. Hope Bay is one of the largest, biggest opportunities we have in our portfolio that could add 400,000 ounces per year in the 2030s. Hope Bay’s path to success is clear. We are applying the same proven formula that led Meliadine to success, with the same experienced team that conducted the study and the project construction. This quarter, we successfully finalized all the contracts with the engineering firm, and we believe we have assembled a team.

The goal is to advance the detailed engineering phase to approximately 50% completion by Q1 2026. Given our confidence with the project, we are currently doing some preparation work at the site by upgrading the camp facility, extending the airstrip, dismantling the mill, and completing early earthwork. We expect to report on Hope Bay in the first half of 2026. The last project update on my side is about our vision of Malartic towards a one million ounces gold producer. Next slide, please. To achieve our one million ounces production at Malartic, we identified four key blocks. The first building block is the foundation, the current Odyssey phase one project, transforming the site from Canada’s biggest open pit mine to the largest underground gold mine in Canada.

The target is about 550,000 ounces per year for this part, and the project is progressing very well. The ramp is on target, the shaft sinking as well, and we have reached a major milestone in Q1, achieving the commissioning of the temporary loading station at level 64, unlocking efficient transportation of rock and personnel via the service hoist. The first shaft is expected to be completed by mid-2027. The second block in that one million ounces story is the second shaft at Odyssey. With the promising results we see in exploration, we are evaluating the possibility of a second shaft to mine in parallel to the first one, the massive East Gouldie ore body. The second shaft could contribute to another 220,000 ounces per year, which brings us to 770,000 ounces per year for the Odyssey project.

There are two other blocks that we could unlock on that. The first one of those, or the third one, is the Marban pit, located 13 kilometers from the Malartic mill. Marban was successfully added to our portfolio through the acquisition of O3, and could potentially contribute to another 130,000 ounces per year, which brings us to the 900,000. And the last one is Wasamac. Wasamac is a 3,000 ton per day underground operation to be trucked at Malartic. It is about 100 kilometers from Malartic. Wasamac can potentially contribute to another 100,000 ounces per year. With all of the four building blocks together, we are reaching the one million ounces vision. Over the next five to six years, our focus will be on the studies, permitting, and construction, aiming to integrate these new ore feeds into the Malartic mill in the 2030s.

We should be in a good position to green light the second shaft, Marban, and Wasamac in early 2027. Now I would like to hand it over to Natasha Vaz.

Natasha Vaz: Thanks, Dom. Good morning, everyone. So I will cover the operational highlights for Ontario, Australia, and Mexico. All the regions delivered good safety, operating, and cost performance to start off the year. Detour poured their seventh million ounce in March and had the highest Q1 mill throughput with the lowest turnover seen since the mine began open pit operations. Weather, however, was challenging this quarter. We do factor in weather delays into our plans, particularly in the winter, but this was a very abnormal winter for us at Detour. So this quarter, we ended up mining less of the higher grade open pit material and instead fed lower grade stockpile, which was planned to be processed later in the year. Now at Macassa, we hit a few records in safety, in lateral development, and in ounces produced.

But I think the highlight is that similar to Detour, even in a highly competitive labor market, we hit a record with the lowest turnover in its history. And in terms of the production, Macassa had a pretty strong quarter too, on the back of two stopes that overperformed. Fosterville too had a good quarter. Here, we are working on progressive improvements to the ventilation system, and production is progressing at all three mining fronts. And, of course, operational improvement efforts with a focus on cost control initiatives are continuing at all of our sites. Now if we look ahead, we are seeing a few exciting things on the go. I will start with Macassa. We are focusing on mill optimization here. We will continue to work on initiatives to debottleneck parts of that circuit, reduce downtime, and further improve the mill throughput incrementally.

At Fosterville, we will continue to conduct further technical evaluations and drill to confirm the feasibility of increasing the annual throughput to an average of approximately 175,000 ounces. And at San Nicolas, through the JV, we will continue to work on the feasibility study. Project approval is expected to follow, of course, dependent on the receipt of the permits and the results of the study. We anticipate all of this coming together towards the end of this year. And finally, on the next slide, I will give you a quick update on the two projects that will give us the opportunity to grow low-risk and profitable production in a very mining-friendly jurisdiction like Ontario. And I will start with Detour. This is a world-class asset. Last year, we outlined a pathway for Detour to be a one million ounce producer annually for over a fourteen-year period.

It is still early days, but this quarter, the overburden excavation was completed. The surface preparation was completed. As well, we received the permit to take water, so we are expecting to commence the ramp development in Q2. As for Upper Beaver, again, this is another low-risk opportunity to grow the production profile in Ontario. This quarter, we continue to advance on both fronts, the surface setup needed for shaft sinking and the site preparation for the ramp. You can see in the picture that we have started advancing on the steel installation of the headframe and the hoist room. We are expecting both of them to be completed or commissioned in early Q4 this year, and shaft sinking to commence soon after. As for the exploration ramp, we have completed the box cut.

We are expecting to commence the ramp development in Q4 this year, if not a bit sooner. Both the Detour underground and Upper Beaver are really solid projects with strong risk-adjusted returns and are going to be drivers of future growth at our Ontario platform. And we look forward to continuing to advance on these projects throughout 2025. And with that, I will pass over to Guy Gosselin.

Guy Gosselin: Thank you, Natasha, and good morning, everyone. First, on Slide twelve, I would like to take the opportunity to highlight the various exploration teams at each mine and project site for their great health and safety performance, cost control, and productivity improvement initiatives. We look at the landscape in these photos coming from Hope Bay, and we realize that it is a tough environment. And our people are doing an amazing job at working safely while implementing cost control and productivity initiatives. Overall, we had an excellent first quarter with 300 kilometers of drilling completed on all sites, focusing on advancing our key value driver projects. Here at Hope Bay, we delivered better than budgeted drilling with almost 30 kilometers of drilling completed in the first quarter from high-space drilling and from the exploration gravel track that has greatly enhanced our site performance in Q4 and Q1.

Globally, we have a total of 112 drill rigs working on all sites of the company. I would also like to thank our drilling excellence team that continues to work closely with all of our drilling entrepreneurs to integrate new technology to make drilling safer, more productive, and therefore more cost-efficient. So from a result standpoint, I will briefly comment on three projects: Hope Bay, Canadian Malartic, and Detour. So on slide thirteen, at Hope Bay, we continue to see strong results in two very interesting areas. First of all, closer to the surface in Patch Seven, with results up to 20 grams over 4.2 meters at only 240 meters below surface. That could potentially be accessible early in our project development scenario. And secondly, in the gap between Solok and Patch, close to the proposed ramp, with results up to 24 grams over 9.5 meters.

We anticipate these results will have a positive impact on the mineral resources at the next update. On Slide thirteen, a more detailed look at Odyssey. Some very exciting results in three areas. First of all, the Upper East portion of the East Gouldie that we anticipate will get to enter our reserves at year-end this year. Secondly, the Lower Eastern extension of East Gouldie with some pretty good results up to 5.3 grams over 27 meters, 6.6 grams over 17 meters, a couple of hundred meters to the eastern limit of the current resources, and all of that between 1,800 and 1,900 meters below surface. And third, in the Eclipse spiral zone, with results up to 3.7 grams over 59.7 meters. These strong results in the Lower East and Eclipse continue to enhance our scenarios for the location of a second shaft at Odyssey.

And last but not least, at Detour, drilling continued to infill the deposit in areas that are targeted for the underground mine project, both below the pit in the Saddle in the central portion of the deposit, with some local very spectacular results up to 8 grams over 78 meters. And to the west, close next to the planned exploration ramp, with results up to 3 grams over 44.5 meters. So we had a very good start to the year in terms of drill results on our key value driver projects, and we are in a very good position to deliver updates on studies as discussed in our previous press release in February and mentioned by Natasha and Dominique. So on that, I would like to return the microphone to Ammar for some closing remarks.

Ammar Al-Joundi: Thank you, Guy, and thank you to the full team. The gold price performance over the past year has been remarkable. Our owners invested in gold because they had the correct view that gold prices would increase. And our owners invested in us because they had the correct view that Agnico Eagle Mines Limited is well positioned to deliver the full benefit of gold price increases to them. To deliver that full benefit, we focused on three things and we have delivered three things. One, is production. We need to deliver the production we promised. And we need to be able to grow production per share over time. And we are doing both. Two, we need to control costs. We are delivering not only solid cost control, but we remain disciplined with capital spend.

The projects we are investing in are all expected to generate good returns, and they are the same projects that made sense at gold prices more than $1,000 below where they are now. This is our owner’s money, and we are not going to spend our owner’s money just because the price of gold went up. And third, and this is important, we need to deliver this production and we need to deliver these costs reliably, steadily, and with as little risk as possible. Operational risk, financial risk, political risk. We are going to stay with the same strategy that we have used now for almost seventy years. It works for us. It is not for everyone, but it works for us. We are going to focus on regions with multi-decade geologic potential, and with the political stability that allows us to fine-tune our strengths over multiple decades.

If we take a look at just some of the discussion today, the team that is building the shaft at Malartic is going to be the team that builds the shaft at Upper Beaver. The team that is building Upper Beaver is the same team that just finished construction projects elsewhere in the company. Dominique made the point that the team building Hope Bay is the same team that built Meliadine. And something that is really important that Natasha mentioned, which I think really sort of emphasizes this, we have the lowest turnover rates ever in the history of Detour and Macassa. This is how you build a competitive advantage. You not only leverage off your capital assets, but you keep the best people and you use them to their full extent. So with that, I would like to turn it over to questions.

Operator: Thank you. And ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star followed by the number one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing any key. To withdraw your question, please press star followed by the number two. And with that, our first question comes from the line of Ralph Profiti with Stifel. Please go ahead.

Q&A Session

Ralph Profiti: Thanks, operator. And good morning, Ammar. Thanks for taking my questions. It is very encouraging to see some of these internal zones start to bear fruit at Canadian Malartic. And, you know, the number two point on the fill the mill strategy slide, you know, sort of talked about this second shaft. I am just wondering how the medium-term mine planning and the shaft positioning might be impacted by Eclipse. It does seem like Eclipse may be closer in proximity to existing ramp infrastructure, and just wondering where this potential, you know, if exploration proves out, how that might fit into the medium-term mine plan.

Ammar Al-Joundi: Hi, Ralph. It is a good question. Eclipse is going to be more, let us say, in the more mid-long term because it is deeper. But this is really a zone which is going to help for the second shaft. But there is also some upside that we are not talking about or maybe briefly talked about at the Upper East of East Gouldie and also some internal zones at Odyssey South, Odyssey North that we are still working on. That could bring potential ounces in 2027, 2028.

Ralph Profiti: Okay. That is encouraging. Thanks. The drilling at Marban, 24,000 meters, just wondering are we looking at infill, resource expansion, and then would it be too soon to expect updated resources in the year-end 2025 reserve update?

Guy Gosselin: Hey. So, yeah, I will take that one. So good morning. So our plan for Marban for this year, we want to provide sort of the first snapshot of what it could be as we took over the project. But that new drilling is dedicated to fully investigate the Eastern Extension because one of the factors over there is the pit as O3 was looking at it was property boundary constrained with land that Agnico already owns in the eastern portion of the deposit. So we see some upside over there. And that first phase of drilling is aiming to make a first kind of step of the shallow portion of that eastern extension on the claim that we already had. And after that, we will see. So I think we can anticipate the first update of Marban reserve and resources at the end of this year.

And maybe a second update by the end of 2026, which will be, let us say, most likely the scenario we will be developing. But we want to provide, let us say, step by step as is. And with another first phase of drilling.

Ralph Profiti: Great. Yes. Excellent. Thank you for those answers.

Operator: And your next question comes from the line of Joshua Wolfson with RBC Capital Markets. Please go ahead.

Joshua Wolfson: Yeah. Thanks very much. Along the same lines as some of the questions that Ralph had at Malartic, I mean, I noticed the rig count is probably near a record, at least in terms of what we have seen in the sector. You know, is there any ability to leverage some of the understanding here for what the potential of section shafts could be in the current design for the initial shaft and maybe look at reevaluating some scope changes and accelerate a second shaft? And along those lines, just understanding the timeline, you know, today, what you think is reasonable to think about for that second shaft.

Dominique Girard: Hi, Josh. That is a very good question. In fact, we are evaluating right now should we go deeper with the first shaft because it is extending deeper? And it is also in parallel looking at how deep we go with the second shaft or not. We should have an internal concept on that by the end of this year. It is really all to unlock the potential. For the second shaft, we need we need we are looking for two million ounces in inferred. This is what we are looking for. So far, the drilling is very positive. It makes sense. But the second shaft is going to target is going to be also to be a production shaft. So cheaper, and easier to do, that is what we are looking for right now.

Joshua Wolfson: Got it. And sorry. The time frame that you think would be reasonable to think about the second shaft being in production?

Dominique Girard: We are talking in early 2030s.

Joshua Wolfson: Good. Thanks. And then on some of the Meadowbank opportunities you mentioned for the IVR pit pushback, and potentially the underground expansion. What would be the kind of rough capital numbers you think that would be reasonable to assume there? Thank you.

Dominique Girard: I do not have the numbers, but that is going to be no big number because it is going to be just some stripping and development. As we already have all the facilities, like the camp, the mill, the roads. So but I do not have the number. But it is a I mean, it is an important point because Josh, this will allow us to extend the mine life with relatively very small capital. So Dominic made the point, look, these are not going to be cheap cash cost ounces, but they are going to be, I think, exceptional return on capital ounces. And that is really what matters. Sorry, Dom? Yeah. Just maybe something to add that we we did not talk, but extending the mill, it is also meaning that it is going to keep drilling. So that also brings an interesting opportunity to eventually find more and to keep that running. So I am very excited about that. It is a very great news, and the team is doing wonderful work on that.

Joshua Wolfson: Great. Yeah. Thank you very much.

Operator: And your next question comes from the line of Anita Soni with CIBC World Markets. Please go ahead.

Anita Soni: Hi. Good morning, Ammar and team, and congrats on strong results and congrats you are in place for delivering that result to shareholders. The first question that I have is with respect to the cost. So you came in below the bottom end of the cost guidance range for this quarter. And you are maintaining the production sorry, the cost guidance for the year. Can you just give us an idea of where you are seeing the cost evolving over the course of the year to get to that to that higher amount?

Jamie Porter: Yeah. So thanks, Anita. It is Jamie. Yeah. We came in at $903 in the quarter. You know, below the low end of our guidance, which is $915 to $965. We did benefit from the weakness in the Canadian dollar, I think the average the Canadian dollar averaged $1.44 in the quarter. We had some hedges in place, so our realized FX rate was $1.42. Much better than the $1.38 that we budgeted. So, you know, that that was a big contributor. Really, the overperformance in terms of production, obviously, increased the denominator, and that helped as well. So we would expect costs to go up and be fairly constant throughout Q2 through Q4.

Ammar Al-Joundi: And sorry. Just to repeat a point we have made many times, when you have a good operating quarter, you have a good cost quarter. And the team delivered a great operating quarter. You know, let us hope they continue to do it for the rest of the year, but for now, we are maintaining our cost guidance.

Anita Soni: So that is basically if you continue to assume an even sort of mid even divide by four on the midpoint of your original guidance or your guidance range, then that would put you back into the in into your cost guidance range.

Ammar Al-Joundi: Yeah. And at an exchange rate of $1.38 and, you know, a bunch of other assumptions. That is why it is a great start to the year. We are delighted. You always want to be off to a good start. But it is still early in the year. So we expect to have a good year. We are very well positioned to have a good year. And we are going to keep working hard.

Anita Soni: Okay. And then my second question a little bit further on Odyssey. I think Dominic mentioned you were looking for about two million ounces. In order to develop that next shaft. Can you talk about how much you feel like you have delineated at this point?

Guy Gosselin: Anita, it is so Avi for the first shaft, you know, an area with above an average grade north of three grams that, you know, will will be and we are we are getting there and you see those even those recent step out, that depth where we got some better than average grade, with good thicknesses and those results in these woody, all of that is shaping up to define, you know, that two million ounces at better than average grade that Dominic is talking about and when you look at the location to the east. So so I think it is a matter of getting getting getting the drill spacing. And some of those drill holes are are are quite long. So it takes some time to get the the right drilling pattern to firm up sort of under a a a a study.

I think we are we are within reach. You know, is it it is a matter of of you know, maybe a year to get that all of that drilling in good shape, and we will be able to, you know, firm up the scenario where where exactly it should go. But it smells good based on the high-grade result we are getting in the east flank.

Anita Soni: That is nice. I will write that down for my notes. Sounds good. Thank you.

Operator: And your next question comes from the line of Daniel Major with UBS. Please go ahead.

Daniel Major: Hi. Thanks so much. And great quarter. First question, just on the cash returns you have obviously hit the, basically, zero net debt. And indicated an upscaling to the pace of the buyback. Two parts. I mean, is there any reason we should expect you to move into a meaningful net cash position, or should we base how are you feeling around around the balance between special dividends and buybacks? Is this all buybacks. So would you consider a special dividend as a part of the distribution mix?

Jamie Porter: Yeah. Thanks, Daniel, for the question. I think, you know, as I indicated in in my comments, on the call, we are focused on certainly increasing returns to shareholders, but also continuing to to strengthen our balance sheet and improve our financial flexibility. So, you know, we are comfortable getting to a net cash position and comfortable at the net cash position, you know, north of a billion dollars. We think that is a true competitive advantage in in in this business. In terms of the shareholder returns, I think we are going to do more on the the share buyback. That is, you know, a big factor why we increase the the the limit, why we intend to increase the limit to a billion dollars over a twelve-month period.

So I would expect more activity on the share repurchase side. And obviously, we have seen a lot of volatility in the gold price. We will continue to evaluate the dividend policy based on that, but certainly an uptick in in share repurchases in the quarters to come.

Ammar Al-Joundi: You know what? I will add it, Ammar here. At these prices, Agnico Eagle Mines Limited and frankly a lot of our peers should be making a lot of money. We should be generating a lot of cash and that cash belongs to our owners. We will be returning the cash. The most important thing in my opinion, is do not waste that cash. This is why we keep repeating. It is your cash. It is not our cash. And we are going to continue to be disciplined, which means that we are going to build the business, we are going to strengthen the balance sheet, and we are going to increase returns to shareholders. And it may be in a dividend, maybe it is a share buybacks, maybe maybe it is probably a combination of all of those. But the real important question or the real important point is stay disciplined.

Do not do not waste that money. Do not go out and do stupid things with our owners’ money. And, you know, that again, that is why we emphasize from the beginning cost control, that is why we emphasize also capital discipline.

Daniel Major: Great. Thanks. Then maybe a follow-up on the on the project front. Hope Bay looks some good results there. What can you give us some more of an indication of timelines if possible, around updated kind of studies, FID kind of yeah, trajectory.

Ammar Al-Joundi: Which project? All the projects?

Daniel Major: Hope Bay.

Dominique Girard: Sorry. I missed it. Hope Bay, we are looking in early 2026 to have a better final picture and potentially green light the project.

Ammar Al-Joundi: So Alright. Thank you.

Dominique Girard: Yeah. In the meantime, we are updating the study, doing detailed engineering, as we did at Meliadine, before giving KPIs and what what is going to be the cost, how long it is going to take, we would like to have more engineering done. And it is also when you are doing that engineering that you find solutions and you improve and you de-risk the project. So it is really our goal to be over 50% early 2026. And we are also doing a lot of as you mentioned, Dom, activity on the ground. We are getting ready not only with the engineering and the studies, but we are getting ready to to get off the starting blocks very quickly. We are increasing camp space. We are upgrading some of the infrastructure. We are clearing out the old mill. That we have a frankly, an empty building to to build the new mill in.

Daniel Major: Great. Thanks. Good luck.

Operator: And your next question comes from the line of Lawson Winder with Bank of America Securities. Please go ahead.

Lawson Winder: Thank you, operator. Good morning, Ammar and team. Very nice to hear from you all, and thank you for today’s update. You talked about your cost control, and it is extremely impressive. But you also noted there is a certain cost element royalties that is sort of out of your control. In a way though, I mean, it it it could be in your control in the sense that you could buy back your royalties, and I would like to know how you think about that. I mean, in particular, the Canadian Malartic royalty. I mean, is there a is there an argument for buying those back in order to actually be proactive on controlling that one cost item you cannot control. And then looking at it from another point of view, I mean, is that even still relevant given the extent to which the Canadian Malartic property has expanded beyond the bounds of the current royalty? Thanks.

Ammar Al-Joundi: Well, I mean, that is a very logical question. And we are well aware of those royalties. And we know there is a lot of speculation around those royalties. And Lawson, the answer is, of course, we look at that. We look at everything all the time, what makes sense for our shareholders. Those royalties are fantastic for I mean, that was the smart thing that Osisko did. I mean, they they found this thing. They set up the royalties. Good for them. I give them credit. We look at it. If there is an opportunity for us to get it at a level that makes sense for our owners, we would do it if if someone else has a lower cost of capital and makes more sense for them, you know, then then that is what capital discipline is all about. So very good question. Of course, we know about it. Of course, we look at it. And if the opportunity arises that it makes sense, great. But we are going to be disciplined.

Lawson Winder: And then when you think about the current footprint Canadian Malartic, I mean, it is starting to expand beyond that current world. Is that a fair statement? And, like, how does that the the how does the expanding resource base and future trajectory of resource growth at that property, you know, factor into this?

Ammar Al-Joundi: Well, you are exactly right. The ore body continues to expand and potentially well beyond the boundary of the royalties. And I mean, clearly, what I would say is we have probably better insights into that than well, not probably. We have better insight into that than anybody. So we do have an advantage in knowledge when it comes to capital allocation in that area.

Lawson Winder: Yeah. Okay. Well, thanks for that perspective, Ammar. And if I could just ask one follow-up. Thinking about your move into or back into Zinc. Sorry to be clear. You guys historically have mined a significant amount of Zinc. So you are moving back into Zinc with your partnership with Tech. And, I mean, it makes a lot of sense. You produce a metal that trades at a significant sort of historical relative premium to a lot of the industrial metals. Is there an attraction to take some of those very high return profits you are earning on gold and invest it increasingly into base metals, like, beyond what you are doing with San Nicolas?

Ammar Al-Joundi: Well, you know, we are a gold company. We are more gold-centric than anyone else and we are happy to be in gold. And certainly the last year has demonstrated that gold continues to do what it is expected to do. I mean, you know us well enough. We are a gold-centric company, but we just want to make money for our owners. We want to do it responsibly and we want to do it safely. But we are always going to focus and try to leverage off the competitive advantages that we have. So if we find a copper mine in a region that we think has the geologic potential and we have a competitive advantage, we would be open to that, of course. But we are not you know, we are a little different than some of our peers. Our peers have you know, they pick one metal, copper, they said they will go anywhere in the world to do it.

And they have set targets. For Agnico, we go we just want to make money for our owners. Which means we are going to play off our strengths. We are open we are a gold company, but we are open to other metals if it makes a lot of money. They have to be in places that we are comfortable operating. And probably the most important thing is the amount that we do is going to be driven by opportunity to make money. It is not going to be driven by setting an arbitrary number of thirty or forty percent.

Lawson Winder: Okay. Very well said. Thank you, Ammar.

Operator: And your next question comes from the line of John Tumazos with John Tumazos Very Independent Research. Please go ahead.

John Tumazos: Thank you for your service to the company. I am looking at Slide twelve. Excuse me. I am interested in the 24-gram intercept between Solok and Patch Seven. Is it possible, Guy, that the two zones connect and are one zone? First, second, at 24 grams, it would be thirty feet or so of $2,500 US rock at today’s gold prices. What do you think the cost per ton will be when you have a they restarted? $250 a ton, $500. I am wondering if that 24-gram intercept is 80 or 90% gross margin rock.

Guy Gosselin: Well, maybe to answer on the cost, you have to look at we are looking to replicate something similar to Meliadine. So you should look at the cost structure at Meliadine, 6,000 tons per day and where did generally between $230 and $250 per ton if you look at the numbers. So, yeah, you are right. Those kind of intercepts are great. They are well above, but you have to look at it. As you know, on average. And to your first question, and as you can as you see on the long section at slide thirteen, there are several overshoots within that panel. I am not saying that they all are going to connect. Because, typically, those are kind of the structure is kind of an anastomosed shear zone where there is some higher grade ore shoot like this as defined in the patch and Solok area.

But I think that in between those recent results demonstrate that oh, there could be one or two other pockets in the gap in between the patch driven and the Solok. And this is what we are going to be focusing on because you know, that would be a very positive on the project. It is close from the planned ramp in between Solok and Patch. There is one or two other ore shoots, and it is pretty similar to the pattern that was observed back in the day also in Doris. So it is a collection of ore shoots along that trend. And those recent results confirm our view that, you know, we could add, you know, any up to maybe a million ounces between Solok and Patch. That is my forecast. Thank you.

Operator: And your last question comes from the line of Tanya Jakusconek with Scotiabank. Please go ahead.

Tanya Jakusconek: Thank you very much for taking my question. I have three questions. And first of all, congratulations on a good quarter. If I could. Maybe, Ammar, can I start with you just on the tariffs you had a paragraph in your press release in terms of the impact of sequential on your cost structure? Can I just dive a little bit deeper into that in terms of trying to understand what portion of your cost structure, I am assuming, consumables, would, you know, be impacted and what within there would you be having the greatest impact? And then just on the labor side, because as you know, if tariffs come through, it would be inflation. I am just trying to understand also what labor negotiations you are going through in 2025 with your workforce.

And then lastly, would it come through sustaining and development capital and maybe any important or large sustaining or development capital purchases new mine fleets, etcetera, that you could see yourself doing this year? So that is my first question. Thank you.

Ammar Al-Joundi: Thanks, Tanya, and I guess you have got a cold, so get better soon. So on the tariff side, I will just kind of give a big picture and then go into a little bit of detail with some of the questions. So first of all, on the revenue side, we do not anticipate any impact, zero. We have our gold refined outside of the United States and we do not expect any tariff impact on the revenue side. On the cost side, about 60% of our costs are either labor or energy and we do not see any tariff impact on any of that. On let us say the 40% of other costs, one of the advantages that we have of mining in regions where mining has been going on for decades and where we have helped build a robust local supply chain is we get a lot of things locally.

And so we will have some impact where it is impossible to say because it is the reciprocal tariffs that would affect us. And, you know, those are in flux, and we do not know. But to make a long story short, no impact on revenue. No impact on labor, no impact on energy, maybe some impact on consumables, but relatively less than I think people would expect because of the local supply chains that we have got. And our high-level assessment, and take this with a grain of salt because I do not think anybody knows, where we are going to end up with tariffs. But in general, our view is to the extent that the tariffs have an impact, it would be and we are guessing, in the sort of maybe 3% to 4% increase, but that would of course, but that would likely be offset by an equivalent or roughly equivalent weakness in the Canadian dollar.

Again, I am not an economist. We have done a lot of work on this. That is our assessment. On the labor side of things, I mean, we have great relationships with our teams. We have had our usual very constructive negotiations at the start of the year. That is all been set. We will continue to do things the way we have done them for years, which is with respect and with our partners. So we do not really see anything on the labor side. And on the finally, on the inflation side, I think that again, I am not I am not an economist. It is too early to say. I think though that tariffs are going to be, in general, difficult for economies and then you are going to have to weigh the inflationary pressure of tariffs versus the disinflationary issues associated with a slowdown in an economy.

But again, on that, I am with a mining company. I am not an economist.

Tanya Jakusconek: Yeah. No. None of us are economists here, Ammar. Maybe just on the sustaining capital side. Any new flex fleet? I am just trying to understand any dates. Capital within your CapEx that you know, would be purchased just still have an impact as well.

Natasha Vaz: Hi. Hi, Tanya. It is Natasha. So in terms of equipment, we are always buying equipment. But from what we understand, the equipment is not tariffed. So there is no issue on that end.

Tanya Jakusconek: Okay. Thank you for that. My second question, if I could, I just wanted to ask, Ammar, on your strategy of your investment portfolio. I mean, this investment portfolio is getting bigger. And so I am kind of wondering how you see this portfolio and sort of your strategy on it. I mean, historically, you have traded it and, you know, taking money off the table. Where you can set. So how should I be thinking about this portfolio and your strategy and then the investment of Juniors. And, yeah, I will leave it there.

Ammar Al-Joundi: Yeah. Tanya, fair question because it has gotten big. So there are I think there are two distinct parts to my answer. The first part is yes, we are going to continue the strategy that we have had for decades, which is, you know, get in early, with projects that we think have a lot of potential. And that is really gets to this whole capital allocation, and our strong view that capital allocation has to be based on intelligence. So we make small investments early on in projects that are interesting, and we do it on purpose to learn about those projects and to and to be able to make a logical decision. And we want to continue to be, by the way, the partner of choice for some of these juniors in the regions we operate.

It is a strategy that has worked really, really well for us. We are going to continue it. The second part though is man, your position has gotten pretty big, Agnico. What are you going to do about it? And the honest answer to that is, frankly, gold price went to $3,000 and everything went up in value. Which is not a bad thing. And we are reviewing our positions regularly. But I want to emphasize that the increase is not because we have suddenly decided to double or triple our activity in that space. It is the same pace. It is the same strategy. We have just benefited on the investment side like hopefully, all of you have.

Tanya Jakusconek: I appreciate that. It is just that the certain points, you know, when you look at your portfolio, does it look like that you know, what you had invested in now, it is way out of the money and it

Ammar Al-Joundi: And luckily, it is way in the money. But Yeah. I hear you.

Tanya Jakusconek: And if I could just ask Jamie one final question. On the capital returns, and I know, Jamie, you are going to be more active on the share buyback in the next twelve months. But can you also mention that you would like to go to a net cash billion dollars to be competitive. Is that how I should be thinking? Or on the dividend side that you know, you kind of want to get to that net one billion in cash before you would review the difference? Or what do you need to see that a full feasibility and that net cash of a billion before you would review the debt.

Jamie Porter: Yeah. Excuse me, Tanya. Yeah. I think you have touched on it. I think that is exactly right. We are, you know, targeting in the interim, a billion dollars of net cash, and we would like to see some stability in the gold price, and then we will obviously reevaluate the dividend policy. I think for Q2 and likely for Q3, you know, the focus will be on higher returns via the share buyback, but we will be evaluating the dividend and obviously having discussions with our board. And if the gold price stays where it is, there is a very good chance of an increase at some point in the future.

Tanya Jakusconek: Okay. Thank you very much for taking my questions, and congratulations, sir. Thank you. And get well soon.

Operator: And that concludes our question and answer session. I would like to turn it back to Mr. Ammar Al-Joundi for closing remarks.

Ammar Al-Joundi: Thank you, operator, and thank you, everyone, for participating this morning. As a reminder, we are hosting our Annual General Meeting today at eleven o’clock at Arcadian Court and we hope to see as many of you there as possible.

Operator: Thank you. And this concludes today’s conference call. Thank you all for joining. You may now disconnect.