Agnico Eagle Mines Limited (NYSE:AEM) Q4 2022 Earnings Call Transcript

Ammar Al-Joundi: I would say — hello Greg, I would say — and sorry, just before, Greg, I answer your question, Emily, we will provide more guidance with specific cadence towards the end of the year on some of these projects. I just didn’t want to leave you hanging there. So, Greg, — so we’ve actually completed a lot of big ticket items on the CapEx side on — in 2022, things like the filter-press at LaRonde, which is going to allow us to do dry stack tailings, which is for environmental purposes, et cetera. The CapEx forecast beyond ’24, ’25 is forecast to decline based on the current life of mine. Our job continues to be, as you know, to look for opportunities to make profitable investments for our owners. So, I’m optimistic that we’re going to continue to find good opportunities to create value on a per share basis. But to answer your specific question, yes, based on the life of mine models we have right now, the CapEx is expected to decline beyond ’24, ’25.

Greg Barnes: Just at Macassa, it seems like you’ve taken a bit of a reset there in terms of production profile going forward. I think there was talk at one point, it would be 350,000 to 400,000 ounces a year, but — we’re not seeing that in the three-year forward look anyway. What’s the view on Macassa now?

Ammar Al-Joundi: Well, I’ll start, and then maybe Natasha can comment a little bit. This time last year, and I remember the call very well because it was my first call. We hit Macassa head on. We said, look, the previous guidance was 350,000, 400,000 a year. We think it’s a great ore body. There’s a lot of potential, but it’s not going to get to 350,000 to 400,000 in the time frame that was outlined. And we said this based on the due diligence we did, and it’s a great orebody. But as I said then, this is a mine that Kirkland was taking from the 1930s to the 2020s, and they were making good progress. We’ve made very good progress this year at Macassa. The team is energized, and Natasha can talk about a lot of the accomplishments. I think what I would say, Greg, is Macassa is probably a 300,000 to 350,000, not 350,000 to 400,000 ounce mine, but maybe Natasha?

Natasha Vaz: That’s correct. Thank you, Ammar. So, Greg, in terms of the current guidance, it reflects two main things: the slower ramp-up of mining activities and a lower gold grade when compared to the previous guidance. So with respect to the lower forecasted grade, it’s largely a result of adjustments to our resource model based on additional definition drilling. And then the slower ramp-up in 2024 is partly due to the reevaluation of the development rate and the mining sequence following the completion of Shaft 4 and the new ventilation system. Now we’re always looking at opportunities to improve on our productivities. But for now, we feel that these are rates that are achievable. The site has done a lot of work in terms of the optimization efforts, whether it’s compliance to the plan, the maintenance program initiatives.

But there’s always opportunity. And I feel like that there is opportunity with number 4 Shaft and the ventilation upgrade coming on to improve on that. With respect to looking at it in the long run, like Ammar said, I envision the same thing at 300,000 to 350,000, the deeper mine, the South Mine Complex and the Main Break, we envisioned it to still be approximately around 300,000 to 310,000. And then we foresee an additional, say, 20,000 to 40,000 ounces coming from the near surface deposits, the AK deposits that could potentially be trucked to another mill.