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SENT Given VVN these DT uncertainties NNS , , readers NNS are VBP cautioned VVD not RB to TO place VV undue JJ reliance NN on IN these DT forward RB looking VVG statements NNS , , and CC the DT Company NN further RBR cautions VVZ readers NNS not RB to TO place VV undue JJ reliance NN upon IN any DT such JJ forward RB looking VVG statements NNS , , which WDT speak VVP only RB as RB of IN the DT date NN made VVD . SENT Except IN as RB otherwise RB required VVN by IN law NN , , the DT Company NN expressly RB disclaims VVZ any DT obligation NN or CC undertaking VVG to TO release VV publicly RB any DT updates NNS or CC revisions NNS to TO any DT such JJ statements NNS to TO reflect VV any DT change NN in IN the DT Company's NP expectations NNS or CC any DT change NN in IN events NNS , , conditions NNS or CC circumstances NNS on IN which WDT any DT such JJ statement NN is VBZ based VVN . 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SENT Under IN Canadian JJ rules NNS , , estimates NNS of IN Inferred VVN Mineral NP Resources NPS may MD not RB form VV the DT basis NN of IN feasibility NN or CC pre NP feasibility NN studies NNS , , except IN in IN rare JJ cases NNS . SENT Investors NNS are VBP cautioned VVD not RB to TO assume VV that DT part NN or CC all DT of IN an DT inferred VVN resource NN exists VVZ , , or CC is VBZ economically RB or CC legally RB mineable JJ . SENT NOTE NN TO TO INVESTORS NNS CONCERNING VVG CERTAIN JJ MEASURES NNS OF IN PERFORMANCE NN This DT document NN presents VVZ certain JJ measures NNS , , including VVG total JJ cash NN cost NN per IN ounce NN and CC minesite NN cost NN per IN ton NN , , that WDT are VBP not RB recognized VVN measures NNS under IN US NP GAAP NP . SENT This DT data NNS may MD not RB be VB comparable JJ to TO data NNS presented VVN by IN other JJ gold NN producers NNS . 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SENT The DT selected JJ financial JJ data NNS should MD be VB read VVN in IN conjunction NN with IN management's JJ discussion NN and CC analysis NN of IN the DT Company's NP operations NNS and CC financial JJ condition NN , , the DT consolidated JJ financial JJ statements NNS and CC other JJ financial JJ information NN included VVD elsewhere RB in IN this DT Form NP 20 CD F NN . SENT 2 CD Year NN Ended VVN December NP 31 CD , , 2004 CD 2003 CD 2002 JJ 2001 CD 2000 CD in IN thousands NNS of IN US NP dollars NNS , , US NP GAAP NP basis NN Income NP Statement NN Data NP Revenues NNS from IN mining NN operations NNS 1 CD 188 CD , , 049 CD 126 CD , , 820 CD 108 CD , , 027 CD 96 CD , , 043 CD 63 CD , , 676 CD Interest NN and CC sundry JJ income NN 655 CD 2 CD , , 775 CD 1 CD , , 943 CD 5 CD , , 752 CD 2 CD , , 145 CD 188 CD , , 704 CD 129 CD , , 595 CD 109 CD , , 970 CD 101 CD , , 795 CD 65 CD , , 821 CD Production NP costs NNS 1 CD 98 CD , , 168 CD 104 CD , , 990 CD 75 CD , , 969 CD 67 CD , , 009 CD 49 CD , , 997 CD Exploration NP expense NN 3 CD , , 584 CD 5 CD , , 975 CD 3 CD , , 766 CD 6 CD , , 391 CD 3 CD , , 213 CD Equity NP loss NN in IN junior JJ exploration NN company NN 2 CD 2 CD , , 224 CD 1 CD , , 626 CD Amortization NN 21 CD , , 763 CD 17 CD , , 504 CD 12 CD , , 998 CD 12 CD , , 658 CD 9 CD , , 220 CD General NP and CC administrative JJ 6 CD , , 864 CD 7 CD , , 121 CD 5 CD , , 530 CD 4 CD , , 461 CD 4 CD , , 223 CD Provincial JJ capital NN tax NN 423 CD 1 CD , , 240 CD 829 CD 1 CD , , 551 CD 1 CD , , 301 CD Interest NN 8 CD , , 205 CD 9 CD , , 180 CD 7 CD , , 341 CD 12 CD , , 917 CD 5 CD , , 920 CD Foreign JJ exchange NN gain NN loss NN 1 CD , , 440 CD 72 CD 1 CD , , 074 CD 336 CD 890 CD Income NN loss NN before IN income NN and CC mining NN taxes NNS recoveries NNS 46 CD , , 033 CD 18 CD , , 113 CD 4 CD , , 611 CD 2 CD , , 856 CD 8 CD , , 943 CD Income NN and CC mining NN taxes NNS recoveries NNS 1 CD , , 846 CD 358 CD 588 CD 2 CD , , 862 CD 3 CD , , 906 CD Income NN before IN cumulative JJ catch NN up IN adjustment NN 47 CD , , 879 CD 17 CD , , 755 CD 4 CD , , 023 CD 5 CD , , 718 CD 5 CD , , 037 CD Cumulative JJ catch NN up IN adjustment NN 1 CD 4 CD 1 CD , , 743 CD 1 CD , , 831 CD Net JJ income NN loss NN 47 CD , , 879 CD 19 CD , , 498 CD 4 CD , , 023 CD 5 CD , , 718 CD 6 CD , , 868 CD Net JJ income NN loss NN before IN cumulative JJ catch NN up IN adjustment NN per IN share NN basic JJ and CC diluted JJ 0 CD . 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SENT Effective NN 2000 CD , , the DT Company NN changed VVD its PP$ accounting NN policy NN with IN respect NN to TO revenue NN recognition NN . SENT As IN a DT result NN of IN the DT change NN , , revenue NN under IN the DT Company's NP concentrate NN sales NNS contracts NNS is VBZ recorded VVN based VVN on IN forward JJ prices NNS at IN the DT time NN of IN delivery NN , , which WDT is VBZ when WRB transfer NN of IN legal JJ title NN to TO concentrates NNS passes VVZ to TO the DT third JJ party NN smelters NNS . SENT The DT terms NNS of IN the DT contracts NNS result NN in IN differences NNS between IN the DT recorded JJ estimated JJ price NN at IN delivery NN and CC the DT final JJ settlement NN price NN . SENT These DT differences NNS are VBP adjusted VVN through IN revenue NN at IN each DT subsequent JJ financial JJ statement NN date NN . SENT Revenue NN from IN gold NN and CC silver NN in IN the DT form NN of IN dore NP bars NNS is VBZ recorded VVN when WRB the DT refined JJ gold NN and CC silver NN are VBP sold VVN and CC also RB included VVD in IN revenues NNS from IN mining NN operations NNS . SENT Prior RB to TO this DT change NN , , the DT Company NN recognized VVD revenues NNS from IN concentrates VVZ on IN a DT production NN basis NN . SENT Under IN this DT basis NN of IN accounting NN , , revenue NN was VBD recognized VVN once IN the DT ore NN was VBD extracted VVN and CC processed VVN at IN the DT onsite JJ mill NN facilities NNS . SENT The DT accounting NN change NN was VBD accounted VVN for IN as IN a DT cumulative JJ catch NN up IN adjustment NN and CC resulted VVD in IN a DT loss NN of IN 1 CD . SENT 8 CD million CD or CC 0 CD . SENT 03 CD per IN share NN in IN 2000 CD . SENT 3 CD 2 CD As IN a DT result NN of IN issuances NNS of IN stock NN by IN Contact NP Diamond NP Corporation NP formerly RB Sudbury NP Contact NP Mines NPS Limited NP Contact NP Diamond NP , , the DT Company's NP interest NN in IN Contact NP Diamond NP was VBD diluted VVN to TO below IN 50 CD during IN 2003 CD . SENT The DT Company NN therefore RB no RB longer RBR consolidates VVZ the DT results NNS of IN Contact NP Diamond NP but CC accounts NNS for IN its PP$ investment NN using VVG the DT equity NN method NN of IN accounting NN . SENT The DT Company NN now RB reports VVZ its PP$ share NN of IN losses NNS in IN Contact NP Diamond NP as IN a DT separate JJ line NN item NN in IN the DT consolidated JJ financial JJ statements NNS . SENT The DT Company NN began VVD using VVG the DT equity NN method NN to TO account VV for IN its PP$ interest NN in IN Contact NP Diamond NP on IN September NP 1 CD , , 2003 CD . SENT 3 CD On IN February NP 15 CD , , 2002 CD , , Agnico NP Eagle NP issued VVD 143 CD . SENT 8 CD million CD aggregate JJ principal JJ amount NN of IN 4 CD . SENT 50 CD convertible JJ subordinated JJ debentures NNS due JJ February NP 15 CD , , 2012 CD the DT Convertible JJ Debentures NNS for IN net JJ proceeds NNS of IN 138 CD . SENT 5 CD million CD after IN deducting VVG underwriting NN commissions NNS of IN 4 CD . SENT 3 CD million CD . SENT Other JJ costs NNS of IN issuing VVG the DT debentures NNS totalled VVD 1 CD . SENT 0 CD million CD . SENT The DT Convertible JJ Debentures NNS bear VVP interest NN of IN 4 CD . SENT 50 CD per IN annum NN on IN the DT principal JJ amount NN payable JJ in IN cash NN semi NN annually RB . SENT The DT Convertible JJ Debentures NNS are VBP convertible JJ into IN common JJ shares NNS of IN Agnico NP Eagle NP at IN the DT option NN of IN the DT holder NN , , at IN any DT time NN on IN or CC prior RB to TO maturity NN , , at IN a DT rate NN of IN 71 CD . SENT 429 CD common JJ shares NNS per IN 1 CD , , 000 CD principal JJ amount NN . SENT The DT Convertible JJ Debentures NNS are VBP redeemable JJ by IN Agnico NP Eagle NP , , in IN whole NN or CC in IN part NN , , at IN any DT time NN on IN or CC after IN February NP 15 CD , , 2006 CD at IN a DT redemption NN price NN equal JJ to TO par NN plus CC accrued JJ and CC unpaid JJ interest NN . SENT The DT Company NN may MD redeem VV the DT debentures NNS in IN cash NN or CC , , at IN the DT option NN of IN the DT Company NN , , by IN delivering VVG freely RB tradeable JJ common JJ shares NNS . SENT On IN February NP 15 CD , , 2002 CD , , the DT entire JJ amount NN of IN the DT Company's NP senior JJ convertible JJ notes NNS due JJ January NP 27 CD , , 2004 CD the DT Senior JJ Notes NNS was VBD called VVN for IN redemption NN . SENT In IN late JJ 2003 CD , , the DT Company NN entered VVN into IN an DT interest NN rate NN swap NN agreement NN pursuant JJ to TO which WDT it PP swapped VVD its PP$ fixed JJ rate NN payments NNS on IN the DT Convertible JJ Debentures NNS for IN variable JJ rate NN payments NNS . SENT The DT notional JJ amount NN under IN the DT swap NN exactly RB matches VVZ the DT 143 CD . SENT 8 CD million CD face NN value NN of IN the DT Convertible JJ Debentures NNS and CC the DT swap NN agreement NN terminates VVZ on IN February NP 15 CD , , 2006 CD , , which WDT is VBZ the DT earliest JJS date NN that IN the DT debentures NNS can MD be VB called VVN for IN redemption NN . SENT Under IN the DT terms NNS of IN the DT swap NN agreement NN , , the DT Company NN makes VVZ interest NN payments NNS of IN three CD month NN LIBOR NP plus CC a DT spread NN of IN 2 CD . SENT 37 CD and CC receives VVZ fixed JJ interest NN payments NNS of IN 4 CD . SENT 50 CD , , which WDT completely RB offsets VVZ the DT interest NN payments NNS payable JJ by IN the DT Company NN on IN the DT Convertible JJ Debentures NNS . SENT The DT three CD month NN LIBOR NP rate NN is VBZ capped VVN at IN 3 CD . SENT 38 CD such JJ that IN total JJ variable JJ interest NN payments NNS will MD not RB exceed VV 5 CD . SENT 75 CD . SENT In IN 2004 CD , , the DT Company NN received VVD 0 CD . SENT 9 CD million CD in IN swap NN payments NNS such JJ that IN net JJ interest NN on IN the DT Convertible JJ Debentures NNS was VBD 5 CD . SENT 6 CD million CD . SENT The DT fair JJ value NN of IN the DT swap NN is VBZ recorded VVN as IN an DT asset NN or CC a DT liability NN with IN a DT corresponding JJ charge NN to TO income NN . SENT The DT carrying VVG value NN of IN the DT Convertible JJ Debentures NNS is VBZ adjusted VVN for IN changes NNS in IN fair JJ value NN attributable JJ to TO the DT risk NN being VBG hedged VVN with IN a DT corresponding JJ charge NN to TO income NN . SENT For IN the DT year NN ended VVN December NP 31 CD , , 2004 CD , , interest NN expense NN was VBD 8 CD . SENT 2 CD million CD 2003 CD 9 CD . SENT 2 CD million CD . SENT 2002 CD 7 CD . SENT 3 CD million CD . SENT 2001 CD 12 CD . SENT 9 CD million CD . SENT 2000 CD 5 CD . SENT 9 CD million CD and CC cash NN interest NN payments NNS were VBD 7 CD . SENT 0 CD million CD 2003 CD 8 CD . SENT 0 CD million CD . SENT 2002 CD 24 CD . SENT 4 CD million CD . SENT 2001 CD 10 CD . SENT 4 CD million CD . SENT 2000 CD 4 CD . SENT 4 CD million CD . SENT Approximately RB 19 CD million CD of IN the DT cash NN interest NN payments NNS in IN 2002 CD were VBD in IN connection NN with IN the DT redemption NN of IN the DT Senior JJ Notes NNS . SENT See VV Notes NP 4 CD a DT and CC 4 CD b SYM to TO the DT consolidated JJ financial JJ statements NNS in IN Item NN 18 CD of IN this DT Form NP 20 CD F NN . SENT 4 CD Effective JJ January NP 1 CD , , 2003 CD , , the DT Company NN adopted VVD the DT provisions NNS of IN FASB NP Statement NN No RB . SENT 143 CD FAS NP 143 CD related VVN to TO asset NN retirement NN obligations NNS . SENT FAS NP 143 NP applies VVZ to TO legal JJ obligations NNS resulting VVG from IN the DT construction NN , , development NN and CC operation NN of IN long JJ lived VVN assets NNS , , such JJ as IN mining NN assets NNS . SENT This DT standard NN requires VVZ companies NNS to TO recognize VV the DT present JJ value NN of IN reclamation NN costs NNS as IN a DT liability NN in IN the DT period NN the DT legal JJ obligation NN is VBZ incurred VVN . SENT The DT Company NN estimated VVD the DT final JJ reclamation NN provision NN taking VVG into IN account NN current JJ circumstances NNS such JJ as IN projected JJ mine NN life NN at IN the DT end NN of IN 2003 CD and CC current JJ throughput NN . SENT Subsequent JJ revisions NNS to TO the DT final JJ reclamation NN estimate NN could MD result VV from IN legislative JJ changes NNS or CC changes NNS in IN the DT underlying JJ assumptions NNS such JJ as IN life NN of IN mine NN . SENT For IN periods NNS prior RB to TO January NP 1 CD , , 2003 CD , , estimated VVN future JJ reclamation NN costs NNS were VBD based VVN primarily RB on IN legal JJ , , environmental JJ and CC regulatory JJ requirements NNS . SENT Future JJ reclamation NN costs NNS for IN the DT Company's NP inactive JJ mines NNS were VBD accrued VVN based VVN on IN management's NNS best RBS estimate VVP of IN the DT costs NNS at IN the DT end NN of IN each DT period NN , , comprising VVG costs NNS expected VVN to TO be VB incurred VVN at IN a DT site NN , , on IN an DT undiscounted JJ basis NN . SENT Such JJ cost NN estimates NNS included VVD , , where WRB applicable JJ , , ongoing JJ care NN and CC maintenance NN and CC monitoring NN costs NNS . SENT Changes NNS in IN estimates NNS were VBD reflected VVN in IN income NN in IN the DT period NN an DT estimate NN was VBD revised VVN . SENT 5 CD For IN the DT year NN ended VVN December NP 31 CD , , 2000 CD , , these DT amounts NNS are VBP net JJ of IN the DT common JJ shares NNS of IN the DT Company NN held VVN by IN Mentor NP Exploration NP and CC Development NP Co NP . SENT , , Limited NP Mentor NP , , a DT former JJ associate NN of IN the DT Company NN , , which WDT for IN accounting NN purposes NNS , , was VBD treated VVN as IN a DT subsidiary NN and CC was VBD consolidated VVN into IN the DT Company's NP financial JJ statements NNS . SENT In IN October NP 2001 CD , , pursuant JJ to TO a DT plan NN of IN arrangement NN , , the DT Company NN amalgamated VVN with IN Mentor NP and CC issued VVD 369 CD , , 948 CD common JJ shares NNS pursuant JJ to TO that DT plan NN . SENT In IN 2002 CD , , the DT Company NN completed VVD a DT public JJ offering NN of IN 13 CD , , 800 CD , , 000 CD units NNS , , each DT unit NN consisting VVG of IN one CD common JJ share NN and CC one CD half NN warrant NN , , at IN 13 CD . SENT 90 CD per IN unit NN for IN net JJ proceeds NNS of IN 182 CD . SENT 9 CD million CD , , after IN deducting VVG issue NN costs NNS of IN 9 CD . SENT 1 CD million CD . SENT Each DT whole JJ share NN purchase NN warrant NN Warrant NN entitles VVZ the DT holder NN to TO acquire VV one CD common JJ share NN for IN a DT price NN of IN 19 CD at IN any DT time NN on IN or CC prior RB to TO November NP 14 CD , , 2007 CD . SENT If IN all DT outstanding JJ Warrants NNS are VBP exercised VVN , , the DT Company NN would MD be VB required VVN to TO issue VV an DT additional JJ 6 CD , , 900 CD , , 000 CD common JJ shares NNS . SENT See VV Note NN 6 CD c SYM to TO the DT consolidated JJ financial JJ statements NNS in IN Item NN 18 CD of IN this DT Form NP 20 CD F NN . SENT In IN 2001 CD , , the DT Company NN completed VVD a DT public JJ offering NN of IN 10 CD , , 350 CD , , 000 CD common JJ shares NNS at IN 7 CD . SENT 90 CD per IN common JJ share NN for IN net JJ proceeds NNS of IN 76 CD . SENT 2 CD million CD . SENT In IN 2004 CD , , the DT Company NN issued VVD 1 CD , , 000 CD , , 000 CD common JJ shares NNS 2003 CD 255 CD , , 768 CD . SENT 2002 CD 40 CD , , 161 CD . SENT 2001 CD 200 CD , , 000 CD . SENT 2000 CD 475 CD , , 000 CD under IN a DT flow NN through IN share NN private JJ placement NN for IN proceeds NNS of IN 17 CD . SENT 5 CD million CD 2003 CD 3 CD . SENT 6 CD million CD . SENT 2002 CD 0 CD . SENT 6 CD million CD . SENT 2001 CD 2 CD . SENT 5 CD million CD . SENT 2000 CD 3 CD . SENT 6 CD million CD net NN of IN share NN issue NN costs NNS . SENT See VV Note NN 6 CD b SYM to TO the DT consolidated JJ financial JJ statements NNS in IN Item NN 18 CD of IN this DT Form NP 20 CD F NN . SENT Currency NP Exchange NP Rates NP All DT dollar NN amounts NNS in IN this DT Form NP 20 CD F NN are VBP in IN United NP States NPS dollars NNS , , except IN where WRB otherwise RB indicated VVN . SENT The DT following VVG tables NNS present JJ , , in IN Canadian JJ dollars NNS , , the DT exchange NN rates NNS for IN the DT US NP dollar NN , , based VVN on IN the DT noon NN buying VVG rate NN in IN New NP York NP City NP for IN cable NN transfers NNS in IN Canadian JJ dollars NNS as IN certified VVN for IN customs NNS purposes NNS by IN the DT Federal NP 4 CD Reserve NP Bank NP of IN New NP York NP the DT Noon NP Buying NP Rate NP . SENT On IN March NP 22 CD , , 2005 CD , , the DT Noon NP Buying NP Rate NP was VBD US NP 1 CD . SENT 00 CD equals VVZ C $ 1 CD . SENT 2017 CD . SENT Year NN Ended VVN December NP 31 CD , , 2004 CD 2003 CD 2002 JJ 2001 CD 2000 CD 1999 CD High NP 1 CD . SENT 3970 CD 1 CD . SENT 5750 CD 1 CD . SENT 6128 CD 1 CD . SENT 6023 CD 1 CD . SENT 5592 CD 1 CD . SENT 5302 CD Low NP 1 CD . SENT 1775 CD 1 CD . SENT 2923 CD 1 CD . SENT 5108 CD 1 CD . SENT 4933 CD 1 CD . SENT 4350 CD 1 CD . SENT 4440 CD End NN of IN Period NP 1 CD . SENT 2034 CD 1 CD . SENT 2923 CD 1 CD . SENT 5800 CD 1 CD . SENT 5925 CD 1 CD . SENT 4995 CD 1 CD . SENT 4440 CD Average NP 1 CD . SENT 3017 CD 1 CD . SENT 4012 CD 1 CD . SENT 5704 CD 1 CD . SENT 5519 CD 1 CD . SENT 4855 CD 1 CD . SENT 4828 CD 2005 CD 2004 CD February NP January NP December NP November NP October NP September NP High NP 1 CD . SENT 2562 CD 1 CD . SENT 2422 CD 1 CD . SENT 2401 CD 1 CD . SENT 2263 CD 1 CD . SENT 2726 CD 1 CD . SENT 3071 CD Low NP 1 CD . SENT 2294 CD 1 CD . SENT 1982 CD 1 CD . SENT 1856 CD 1 CD . SENT 1775 CD 1 CD . SENT 2194 CD 1 CD . SENT 2648 CD End NN of IN Period NP 1 CD . SENT 2295 CD 1 CD . SENT 2396 CD 1 CD . SENT 2034 CD 1 CD . SENT 1902 CD 1 CD . SENT 2209 CD 1 CD . SENT 2648 CD Average NP 1 CD . SENT 2401 CD 1 CD . SENT 2248 CD 1 CD . SENT 2189 CD 1 CD . SENT 1968 CD 1 CD . SENT 2469 CD 1 CD . SENT 2881 CD Risk NN Factors NNS Recent JJ Losses NNS Although IN the DT Company NN reported VVD net JJ income NN for IN the DT year NN ended VVN December NP 31 CD , , 2004 CD , , it PP incurred VVD net JJ losses NNS in IN 2003 CD and CC in IN each DT of IN the DT five CD years NNS prior RB to TO 2002 CD . SENT For IN a DT discussion NN of IN the DT factors NNS contributing VVG to TO the DT losses NNS , , see VV Item NN 5 CD . SENT Operating NP and CC Financial NP Review NP and CC Prospects NNS . SENT The DT Company's NP profitability NN depends VVZ on IN the DT price NN of IN gold NN , , gold NN production NN , , total JJ cash NN costs NNS , , the DT prices NNS and CC production NN levels NNS of IN byproduct NN zinc NN , , silver NN and CC copper NN and CC other JJ factors NNS discussed VVN in IN this DT section NN of IN the DT Form NP 20 CD F NN . SENT Substantially RB all RB of IN these DT factors NNS are VBP beyond IN the DT Company's NP control NN and CC there EX can MD be VB no DT assurance NN that IN the DT Company NN will MD sustain VV profitability NN in IN the DT future NN . SENT Dependence NN on IN the DT LaRonde NP Division NP The DT Company's NP mining NN and CC milling NN operations NNS at IN the DT LaRonde NP Division NP account NN for IN all DT of IN the DT Company's NP gold NN production NN and CC will MD continue VV to TO account VV for IN all DT of IN its PP$ gold JJ production NN in IN the DT future NN unless IN additional JJ properties NNS are VBP acquired VVN or CC brought VVN into IN production NN . SENT Any DT adverse JJ condition NN affecting VVG mining NN or CC milling NN conditions NNS at IN the DT LaRonde NP Division NP could MD be VB expected VVN to TO have VH a DT material JJ adverse JJ effect NN on IN the DT Company's NP financial JJ performance NN and CC results NNS of IN operations NNS until IN such JJ time NN as IN the DT condition NN is VBZ remedied VVN . SENT In IN addition NN , , the DT Company's NP ongoing JJ development NN of IN the DT LaRonde NP Mine NP involves VVZ the DT exploration NN and CC extraction NN of IN ore NN from IN new JJ areas NNS and CC may MD present VV new JJ or CC different JJ challenges NNS for IN the DT Company NN . SENT At IN current JJ levels NNS of IN mineral NN reserves NNS and CC production NN , , the DT LaRonde NP Mine NP has VHZ an DT estimated JJ mine NN life NN of IN approximately RB 14 CD years NNS , , however RB gold JJ production NN at IN the DT LaRonde NP Mine NP is VBZ expected VVN to TO begin VV to TO decline VV commencing VVG in IN 2007 CD . SENT Unless IN the DT Company NN can MD successfully RB bring VV into IN production NN the DT Goldex NP property NN , , the DT Lapa NP property NN or CC its PP$ other JJ exploration NN properties NNS or CC otherwise RB acquire VV gold JJ producing VVG assets NNS prior RB to TO 2007 CD , , the DT Company's NP results NNS of IN operations NNS will MD be VB adversely RB affected VVN . SENT There EX can MD be VB no DT assurance NN that IN the DT Company's NP current JJ exploration NN and CC development NN programs NNS at IN the DT LaRonde NP Division NP will MD result VV in IN any DT new JJ economically RB viable JJ mining NN operations NNS or CC yield VV new JJ mineral NN reserves NNS to TO replace VV and CC expand VV current JJ mineral NN reserves NNS . SENT Metal NP Price NP Volatility NN The DT Company's NP earnings NNS are VBP directly RB related VVN to TO commodity NN prices NNS as IN revenues NNS are VBP derived VVN from IN precious JJ metals NNS gold NN and CC silver NN , , zinc NN and CC copper NN . SENT The DT Company's NP policy NN and CC practice NN is VBZ not RB to TO sell VV forward RB its PP$ future JJ gold NN production NN . SENT however RB , , under IN the DT Company's NP Price NP Risk NP Management NP Policy NP , , approved VVN by IN its PP$ Board NP of IN Directors NPS , , the DT Company NN may MD review VV this DT practice NN on IN a DT project NN by IN project NN basis NN , , making VVG use NN of IN derivative JJ instruments NNS where WRB appropriate JJ to TO ensure VV an DT adequate JJ return NN to TO shareholders NNS on IN new JJ projects NNS . SENT See VV Item NN 11 CD . SENT Quantitative JJ and CC Qualitative JJ Disclosures NNS About IN Market NP Risk NP Derivatives NNS for IN more JJR details NNS of IN the DT Company's NP use NN of IN derivative JJ instruments NNS . SENT Gold NN prices NNS fluctuate VVP widely RB and CC are VBP affected VVN by IN numerous JJ factors NNS beyond IN the DT Company's NP control NN , , including VVG central JJ bank NN sales NNS , , producer NN hedging NN activities NNS , , expectations NNS of IN inflation NN , , the DT relative JJ exchange NN rate NN of IN the DT US NP dollar NN with IN other JJ major JJ currencies NNS , , global JJ and CC regional JJ demand NN and CC political JJ and CC economic JJ conditions NNS , , 5 CD and CC production NN costs NNS in IN major JJ gold NN producing VVG regions NNS . SENT The DT aggregate JJ effect NN of IN these DT factors NNS is VBZ impossible JJ to TO predict VV with IN accuracy NN . SENT Gold NN prices NNS are VBP also RB affected VVN by IN worldwide JJ production NN levels NNS . SENT In IN addition NN , , the DT price NN of IN gold NN has VHZ on NN occasion NN been VBN subject JJ to TO very RB rapid JJ short JJ term NN changes NNS because IN of IN speculative JJ activities NNS . SENT Fluctuations NNS in IN gold JJ prices NNS may MD adversely RB affect VV the DT Company's NP financial JJ performance NN or CC results NNS of IN operations NNS . SENT If IN the DT market NN price NN of IN gold NN falls VVZ below IN the DT Company's NP total JJ cash NN costs NNS and CC remains VVZ at IN such PDT a DT level NN for IN any DT sustained JJ period NN , , the DT Company NN may MD experience VV losses NNS and CC may MD curtail VV or CC suspend VV some DT or CC all DT of IN its PP$ exploration NN , , development NN and CC mining NN activities NNS . SENT The DT prices NNS received VVN for IN the DT Company's NP byproducts NNS zinc NN , , silver NN and CC copper NN affect VVP the DT Company's NP ability NN to TO meet VV its PP$ targets NNS for IN total JJ cash NN cost NN per IN ounce NN of IN gold NN produced VVD . SENT Byproduct NN prices NNS fluctuate VVP widely RB and CC are VBP affected VVN by IN numerous JJ factors NNS beyond IN the DT Company's NP control NN . SENT The DT Company NN occasionally RB uses VVZ derivative JJ instruments NNS to TO mitigate VV the DT effects NNS of IN fluctuating VVG byproduct NN metal NN prices NNS . SENT The DT volatility NN of IN gold NN prices NNS is VBZ illustrated VVN in IN the DT following VVG table NN which WDT sets VVZ forth RB , , for IN the DT periods NNS indicated VVD , , the DT high JJ and CC low JJ afternoon NN fixing VVG prices NNS for IN gold NN on IN the DT London NP Bullion NP Market NP the DT London NP P NN . SENT M NP . SENT Fix NN and CC the DT average JJ gold NN prices NNS received VVN by IN the DT Company NN . SENT 2004 CD 2003 CD 2002 JJ 2001 CD 2000 CD 1999 CD High JJ price NN per IN ounce NN 454 CD 417 CD 350 JJ 293 CD 313 CD 326 CD Low NP price NN per IN ounce NN 375 CD 323 CD 278 JJ 256 CD 264 CD 253 CD Average JJ price NN received VVN per IN ounce NN 418 CD 368 CD 312 JJ 273 CD 278 CD 274 CD On IN March NP 22 CD , , 2005 CD , , the DT London NP P NN . SENT M NP . SENT Fix NN was VBD 432 CD per IN ounce NN of IN gold NN . SENT Based VVN on IN 2005 CD production NN estimates NNS , , the DT approximate JJ sensitivities NNS of IN the DT Company's NP after IN tax NN income NN to TO a DT 10 CD change NN in IN metal NN prices NNS from IN 2004 CD market NN average NN prices NNS are VBP as RB follows VVZ . SENT Income NN per IN share NN Gold NP 0 CD . SENT 09 CD Zinc NN 0 CD . SENT 04 CD Silver NN 0 CD . SENT 03 CD Copper NN 0 CD . SENT 01 CD Sensitivities NNS of IN the DT Company's NP after IN tax NN income NN to TO changes NNS in IN metal NN prices NNS will MD increase VV with IN increased JJ production NN . SENT Uncertainty NN of IN Production NN Estimates NNS The DT Company's NP gold NN production NN may MD fall VV below IN estimated JJ levels NNS as IN a DT result NN of IN mining NN accidents NNS such JJ as IN cave NN ins NNS , , rock NN falls NNS , , rock NN bursts NNS or CC flooding NN . SENT In IN addition NN , , production NN may MD be VB unexpectedly RB reduced VVN if IN , , during IN the DT course NN of IN mining NN , , unfavourable JJ ground NN conditions NNS or CC seismic JJ activity NN are VBP encountered VVN , , ore NN grades NNS are VBP lower JJR than IN expected VVN , , or CC the DT physical JJ or CC metallurgical JJ characteristics NNS of IN the DT ore NN are VBP less RBR amenable JJ than IN expected VVN to TO mining NN or CC treatment NN . SENT Accordingly RB , , there EX can MD be VB no DT assurance NN that IN the DT Company NN will MD achieve VV current JJ or CC future JJ production NN estimates NNS . SENT A DT rock NN fall NN that WDT occurred VVD in IN two CD production NN stopes NNS during IN the DT first JJ quarter NN of IN 2003 CD led VVN to TO an DT initial JJ 20 CD reduction NN in IN the DT Company's NP 2003 CD gold NN production NN estimate NN from IN 375 CD , , 000 CD ounces NNS to TO 300 CD , , 000 CD ounces NNS . SENT Production NN drilling NN challenges NNS and CC lower JJR than IN planned VVN recoveries NNS in IN the DT mill NN in IN the DT third JJ quarter NN of IN 2003 CD led VVN to TO a DT further JJR reduction NN in IN the DT production NN estimate NN by IN 21 CD . SENT Final JJ gold NN production NN in IN 2003 CD was VBD 236 CD , , 653 CD ounces NNS . SENT In IN 2004 CD , , higher JJR than IN expected VVN dilution NN in IN lower JJR levels NNS of IN the DT mine NN led VVN to TO actual JJ gold NN production NN for IN the DT year NN of IN 271 CD , , 567 CD ounces NNS , , below IN the DT initial JJ production NN estimate NN of IN 308 CD , , 000 CD ounces NNS . SENT Cost NN of IN Exploration NP and CC Development NP Programs NP The DT Company's NP profitability NN is VBZ significantly RB affected VVN by IN the DT costs NNS and CC results NNS of IN its PP$ exploration NN and CC development NN programs NNS . SENT As IN mines NNS have VHP limited VVN lives NNS based VVN on IN proven JJ and CC probable JJ mineral NN reserves NNS , , the DT Company NN actively RB seeks VVZ to TO replace VV and CC expand VV its PP$ reserves NNS , , primarily RB through IN exploration NN and CC development NN and CC , , from IN time NN to TO time NN , , through IN strategic JJ acquisitions NNS . SENT Exploration NN for IN minerals NNS is VBZ highly RB speculative JJ in IN nature NN , , 6 CD involves VVZ many JJ risks NNS and CC frequently RB is VBZ unsuccessful JJ . SENT Among IN the DT many JJ uncertainties NNS inherent JJ in IN any DT gold JJ exploration NN and CC development NN program NN are VBP the DT location NN of IN economic JJ ore NN bodies NNS , , the DT development NN of IN appropriate JJ metallurgical JJ processes NNS , , the DT receipt NN of IN necessary JJ governmental JJ permits NNS and CC the DT construction NN of IN mining NN and CC processing NN facilities NNS . SENT In IN addition NN , , substantial JJ expenditures NNS are VBP required VVN to TO pursue VV such JJ exploration NN and CC development NN activities NNS . SENT Assuming VVG discovery NN of IN an DT economic JJ ore NN body NN , , depending VVG on IN the DT type NN of IN mining NN operation NN involved VVN , , several JJ years NNS may MD elapse VV from IN the DT initial JJ phases NNS of IN drilling NN until IN commercial JJ operations NNS are VBP commenced VVN and CC during IN such JJ time NN the DT economic JJ feasibility NN of IN production NN may MD change VV . SENT Accordingly RB , , there EX can MD be VB no DT assurance NN that IN the DT Company's NP current JJ exploration NN and CC development NN programs NNS will MD result VV in IN any DT new JJ economically RB viable JJ mining NN operations NNS or CC yield VV new JJ reserves NNS to TO replace VV and CC expand VV current JJ reserves NNS . SENT Total JJ Cash NN Costs NNS of IN Gold NP Production NP at IN the DT LaRonde NP Mine NP The DT Company's NP total JJ cash NN costs NNS to TO produce VV an DT ounce NN of IN gold NN are VBP dependent JJ on IN a DT number NN of IN factors NNS , , including VVG primarily RB the DT prices NNS and CC production NN levels NNS of IN byproduct NN silver NN , , zinc NN and CC copper NN , , the DT revenue NN from IN which WDT is VBZ offset VVN against IN the DT cost NN of IN gold NN production NN , , the DT Canadian JJ dollar NN US NP dollar NN exchange NN rate NN , , smelting VVG and CC refining VVG charges NNS and CC production NN royalties NNS , , which WDT are VBP affected VVN by IN all DT of IN these DT factors NNS and CC the DT gold JJ price NN . SENT All PDT these DT factors NNS are VBP beyond IN the DT Company's NP control NN . SENT Total JJ cash NN cost NN per IN ounce NN is VBZ not RB a DT recognized VVN measure NN under IN US NP GAAP NP and CC this DT data NNS may MD not RB be VB comparable JJ to TO data NNS presented VVN by IN other JJ gold NN producers NNS . SENT Management NP uses VVZ this DT generally RB accepted VVN industry NN measure NN in IN evaluating VVG operating NN performance NN and CC believes VVZ it PP to TO be VB a DT realistic JJ indication NN of IN such JJ performance NN and CC useful JJ in IN allowing VVG year NN over IN year NN comparisons NNS . SENT The DT data NN also RB indicates VVZ the DT Company's NP ability NN to TO generate VV cash NN flow NN and CC operating VVG income NN at IN various JJ gold NN prices NNS . SENT This DT additional JJ information NN should MD be VB considered VVN together RB with IN other JJ data NNS prepared VVN in IN accordance NN with IN US NP GAAP NP and CC is VBZ not RB necessarily RB indicative JJ of IN operating VVG costs NNS or CC cash NN flow NN measures NNS prepared VVN in IN accordance NN with IN US NP GAAP NP see VVP Item NN 5 CD . SENT Operating NP and CC Financial NP Review NP and CC Prospects NNS Results NNS of IN Operations NP Production NP Costs NNS for IN reconciliation NN of IN total JJ cash NN costs NNS per IN ounce NN and CC minesite NN costs NNS per IN ton NN to TO their PP$ closest JJS GAAP NP measure NN . SENT Risks NNS of IN Acquisitions NNS The DT Company NN regularly RB evaluates VVZ opportunities NNS to TO acquire VV shares NNS or CC assets NNS of IN other JJ mining NN businesses NNS . SENT Such JJ acquisitions NNS may MD be VB significant JJ in IN size NN , , may MD change VV the DT scale NN of IN the DT Company's NP business NN , , and CC may MD expose VV the DT Company NN to TO new JJ geographic JJ , , political JJ , , operating NN , , financial JJ or CC geological JJ risks NNS . SENT The DT Company's NP success NN in IN its PP$ acquisition NN activities NNS depends VVZ on IN its PP$ ability NN to TO identify VV suitable JJ acquisition NN candidates NNS , , acquire VV them PP on IN acceptable JJ terms NNS and CC integrate VV their PP$ operations NNS successfully RB with IN those DT of IN the DT Company NN . SENT Any DT acquisitions NNS would MD be VB accompanied VVN by IN risks NNS , , such JJ as IN the DT difficulty NN of IN assimilating VVG the DT operations NNS and CC personnel NNS of IN any DT acquired VVN businesses NNS . SENT the DT potential JJ disruption NN of IN the DT Company's NP ongoing JJ business NN . SENT the DT inability NN of IN management NN to TO maximize VV the DT financial JJ and CC strategic JJ position NN of IN the DT Company NN through IN the DT successful JJ integration NN of IN acquired VVN assets NNS and CC businesses NNS . SENT the DT maintenance NN of IN uniform JJ standards NNS , , controls NNS , , procedures NNS and CC policies NNS . SENT the DT impairment NN of IN relationships NNS with IN employees NNS , , customers NNS and CC contractors NNS as IN a DT result NN of IN any DT integration NN of IN new JJ management NN personnel NNS . SENT and CC the DT potential JJ unknown JJ liabilities NNS associated VVN with IN acquired VVN assets NNS and CC businesses NNS . SENT In IN addition NN , , the DT Company NN may MD need VV additional JJ capital NN to TO finance VV an DT acquisition NN . SENT Debt NN financing NN related VVN to TO any DT acquisition NN may MD expose VV the DT Company NN to TO increased JJ risk NN of IN leverage NN , , while IN equity NN financing NN may MD cause VV existing VVG shareholders NNS to TO suffer VV dilution NN . SENT The DT Company NN is VBZ permitted VVN under IN the DT terms NNS of IN its PP$ recently RB amended VVN bank NN credit NN facility NN to TO raise VV additional JJ debt NN financing NN provided VVD that IN it PP complies VVZ with IN certain JJ covenants NNS including VVG that IN no DT default NN under IN the DT credit NN facility NN has VHZ occurred VVN and CC is VBZ continuing VVG , , the DT terms NNS of IN such JJ indebtedness NN are VBP no RB more RBR onerous JJ to TO the DT Company NN than IN those DT under IN the DT credit NN facility NN and CC the DT incurrence NN of IN such JJ indebtedness NN would MD not RB result VV in IN a DT material JJ adverse JJ change NN in IN respect NN of IN the DT Company NN or CC the DT LaRonde NP Mine NP . SENT There EX can MD be VB no DT assurance NN that IN the DT Company NN would MD be VB successful JJ in IN overcoming VVG these DT risks NNS or CC any DT other JJ problems NNS encountered VVN in IN connection NN with IN such JJ acquisitions NNS . SENT Restrictions NNS in IN the DT Bank NP Credit NP Facility NP The NP Company's NP recently RB amended VVD 100 CD million CD revolving JJ bank NN credit NN facility NN limits NNS , , among IN other JJ things NNS , , the DT Company's NP ability NN to TO incur VV additional JJ indebtedness NN , , pay NN dividends NNS or CC make VV payments NNS in IN respect NN of IN its PP$ common JJ shares NNS , , make VV investments NNS or CC loans NNS , , transfer VV the DT Company's NP assets NNS , , or CC make VV expenditures NNS relating VVG to TO property NN 7 CD secured VVN under IN the DT credit NN agreement NN at IN that DT time NN that WDT is VBZ not RB consistent JJ with IN the DT mine JJ plan NN and CC operating NN budget NN delivered VVN pursuant JJ to TO the DT credit NN facility NN . SENT Further RBR , , the DT bank NN credit NN facility NN requires VVZ the DT Company NN to TO maintain VV specified JJ financial JJ ratios NNS and CC meet VV financial JJ condition NN covenants NNS . SENT Events NNS beyond IN the DT Company's NP control NN , , including VVG changes NNS in IN general JJ economic JJ and CC business NN conditions NNS , , may MD affect VV the DT Company's NP ability NN to TO satisfy VV these DT covenants NNS , , which WDT could MD result VV in IN a DT default NN under IN the DT bank NN credit NN facility NN . SENT While IN there EX are VBP currently RB no DT amounts NNS of IN principal NN or CC interest NN owing VVG under IN the DT bank NN credit NN facility NN , , if IN an DT event NN of IN default NN under IN the DT bank NN credit NN facility NN occurs VVZ , , the DT Company NN would MD be VB unable JJ to TO draw VV down RP on IN the DT facility NN , , or CC if IN amounts NNS were VBD drawn VVN down RP at IN the DT time NN of IN the DT default NN , , the DT lenders NNS could MD elect VV to TO declare VV all DT principal JJ amounts NNS outstanding JJ thereunder RB at IN such JJ time NN , , together RB with IN accrued JJ interest NN , , to TO be VB immediately RB due JJ and CC payable JJ and CC to TO enforce VV their PP$ security NN interest NN over IN substantially RB all DT property NN relating VVG to TO the DT LaRonde NP Mine NP and CC the DT El NP Coco NP property NN . SENT An DT event NN of IN default NN under IN the DT bank NN credit NN facility NN may MD also RB give VV rise NN to TO an DT event NN of IN default NN under IN existing JJ and CC future JJ debt NN agreements NNS and CC , , in IN such JJ event NN , , the DT Company NN may MD not RB have VH sufficient JJ funds NNS to TO repay VV amounts NNS owing VVG under IN such JJ agreements NNS . SENT Competition NN for IN and CC Scarcity NN of IN Mineral NP Lands NP Many JJ companies NNS and CC individuals NNS are VBP engaged VVN in IN the DT mining NN business NN , , including VVG large JJ , , established JJ mining NN companies NNS with IN substantial JJ capabilities NNS and CC long JJ earnings NNS records NNS . SENT There EX is VBZ a DT limited JJ supply NN of IN desirable JJ mineral NN lands NNS available JJ for IN claim NN staking VVG , , lease NN or CC other JJ acquisition NN in IN the DT areas NNS where WRB the DT Company NN contemplates VVZ conducting VVG exploration NN activities NNS . SENT The DT Company NN may MD be VB at IN a DT competitive JJ disadvantage NN in IN acquiring VVG mining NN properties NNS , , as IN it PP must MD compete VV with IN these DT individuals NNS and CC companies NNS , , many JJ of IN which WDT have VHP greater JJR financial JJ resources NNS and CC larger JJR technical JJ staffs NNS than IN the DT Company NN . SENT Accordingly RB , , there EX can MD be VB no DT assurance NN that IN the DT Company NN will MD be VB able JJ to TO compete VV successfully RB for IN new JJ mining NN properties NNS . SENT Uncertainty NN of IN Mineral NP Reserve NP and CC Mineral NP Resource NP Estimates NNS The DT figures NNS for IN mineral NN reserves NNS and CC mineral NN resource NN presented VVD herein RB are VBP estimates NNS , , and CC no DT assurance NN can MD be VB given VVN that IN the DT anticipated JJ tonnages NNS and CC grades NNS will MD be VB achieved VVN or CC that IN the DT indicated JJ level NN of IN recovery NN of IN gold NN will MD be VB realized VVN . SENT The DT ore NN grade NN actually RB recovered VVD by IN the DT Company NN may MD differ VV from IN the DT estimated JJ grades NNS of IN the DT mineral NN reserves NNS and CC mineral NN resource NN . SENT Such JJ figures NNS have VHP been VBN determined VVN based VVN on IN assumed VVN gold NN prices NNS and CC operating NN costs NNS . SENT The DT Company NN has VHZ estimated VVN proven JJ and CC probable JJ mineral NN reserves NNS based VVN on IN a DT 360 CD per IN ounce NN gold NN price NN which WDT is VBZ the DT three CD year NN average JJ daily JJ price NN . SENT While IN gold NN prices NNS have VHP generally RB been VBN above IN 360 CD per IN ounce NN since IN mid JJ 2003 CD , , for IN the DT six CD years NNS prior RB to TO that IN the DT market NN price NN of IN gold NN has VHZ been VBN , , on IN average NN , , below IN 360 CD per IN ounce NN . SENT Based VVN on IN the DT metals NNS price NN and CC exchange NN rate NN assumptions NNS used VVN in IN the DT 2005 CD LaRonde NP Mineral NP Reserve NP and CC Mineral NP Resource NP Estimate NP , , a DT 10 CD decrease NN in IN the DT gold JJ price NN would MD result VV in IN an DT approximately RB 7 CD decrease NN in IN proven JJ and CC probable JJ reserves NNS . SENT Prolonged JJ declines NNS in IN the DT market NN price NN of IN gold NN may MD render VV mineral NN reserves NNS containing VVG relatively RB lower JJR grades NNS of IN gold NN mineralization NN uneconomic JJ to TO exploit VV and CC could MD materially RB reduce VV the DT Company's NP reserves NNS . SENT Should MD such JJ reductions NNS occur VVP , , the DT Company NN could MD be VB required VVN to TO take VV a DT material NN write VV down RP of IN its PP$ investment NN in IN mining NN properties NNS or CC delay VV or CC discontinue VV production NN or CC the DT development NN of IN new JJ projects NNS , , resulting VVG in IN increased JJ net JJ losses NNS and CC reduced JJ cash NN flow NN . SENT Market NN price NN fluctuations NNS of IN gold NN , , as RB well RB as IN increased VVN production NN costs NNS or CC reduced JJ recovery NN rates NNS , , may MD render VV mineral NN reserves NNS containing VVG relatively RB lower JJR grades NNS of IN mineralization NN uneconomical JJ to TO recover VV and CC may MD ultimately RB result VV in IN a DT restatement NN of IN mineral NN resources NNS . SENT Short JJ term NN factors NNS relating VVG to TO mineral NN reserves NNS , , such JJ as IN the DT need NN for IN orderly JJ development NN of IN ore NN bodies NNS or CC the DT processing NN of IN new JJ or CC different JJ grades NNS , , may MD impair VV the DT profitability NN of IN a DT mine NN in IN any DT particular JJ accounting NN period NN . SENT Mineral NN resource NN estimates NNS for IN properties NNS that WDT have VHP not RB commenced VVD production NN are VBP based VVN , , in IN most JJS instances NNS , , on IN very RB limited JJ and CC widely RB spaced VVN drill NN hole NN information NN , , which WDT is VBZ not RB necessarily RB indicative JJ of IN conditions NNS between IN and CC around IN the DT drill NN holes NNS . SENT Accordingly RB , , such JJ mineral NN resource NN estimates NNS may MD require VV revision NN as IN more JJR drilling NN information NN becomes VVZ available JJ or CC as RB actual JJ production NN experience NN is VBZ gained VVN . SENT See VV Note VV to TO Investors NNS Regarding VVG Estimates NNS of IN Mineral NP Resources NPS . SENT Mining NN Risks NNS and CC Insurance NN The DT business NN of IN gold NN mining NN is VBZ generally RB subject JJ to TO certain JJ types NNS of IN risks NNS and CC hazards NNS , , including VVG environmental JJ hazards NNS , , industrial JJ accidents NNS , , unusual JJ or CC unexpected JJ rock NN formations NNS , , changes NNS in IN the DT regulatory JJ environment NN , , cave NN ins NNS , , rock NN bursts NNS , , rock NN falls NNS and CC flooding NN and CC gold NN bullion NN losses NNS . SENT Such JJ occurrences NNS could MD result VV 8 CD in IN damage NN to TO , , or CC destruction NN of IN , , mineral NN properties NNS or CC production NN facilities NNS , , personal JJ injury NN or CC death NN , , environmental JJ damage NN , , delays NNS in IN mining NN , , monetary JJ losses NNS and CC possible JJ legal JJ liability NN . SENT The DT Company NN carries VVZ insurance NN to TO protect VV itself PP against IN certain JJ risks NNS of IN mining NN and CC processing NN in IN amounts NNS that IN it PP considers VVZ to TO be VB adequate JJ but CC which WDT may MD not RB provide VV adequate JJ coverage NN in IN certain JJ unforeseen JJ circumstances NNS . SENT The DT Company NN may MD also RB become VV subject JJ to TO liability NN for IN pollution NN , , cave NN ins NNS or CC other JJ hazards NNS against IN which WDT it PP cannot VVN insure VVP or CC against IN which WDT it PP may MD elect VV not RB to TO insure VV because IN of IN high JJ premium NN costs NNS or CC other JJ reasons NNS or CC the DT Company NN may MD become VV subject NN to TO liabilities NNS which WDT exceed VVP policy NN limits NNS . SENT In IN such JJ case NN , , the DT Company NN may MD be VB required VVN to TO incur VV significant JJ costs NNS that WDT could MD have VH a DT material JJ adverse JJ effect NN on IN its PP$ financial JJ performance NN and CC results NNS of IN operations NNS . SENT In IN the DT first JJ quarter NN of IN 2004 CD , , two CD accidents NNS claimed VVD the DT lives NNS of IN an DT employee NN and CC a DT contract NN miner NN . SENT Quebec's NP Commission NP de FW la FW sant NP et FW de FW la FW s PP curit NP du NP travail NN completed VVD an DT investigation NN into IN these DT accidents NNS , , and CC the DT Company NN paid VVD fines NNS totalling VVG C $ 27 CD , , 500 CD in IN respect NN of IN these DT accidents NNS . SENT Also RB , , in IN January NP 2005 CD , , an DT accident NN claimed VVD the DT life NN of IN an DT employee NN . SENT The DT Commission NP de FW la FW sant NP et FW de FW la FW s PP curit NP du NP travail NN has VHZ initiated VVN an DT investigation NN into IN this DT accident NN . SENT Other JJ than IN the DT investigations NNS discussed VVN above IN , , no DT regulatory JJ or CC other JJ action NN has VHZ been VBN initiated VVN against IN the DT Company NN in IN connection NN with IN these DT industrial JJ accidents NNS . SENT Laws NNS and CC Regulations NNS The DT Company's NP mining NN and CC mineral NN processing NN operations NNS and CC exploration NN activities NNS are VBP subject JJ to TO the DT laws NNS and CC regulations NNS of IN federal JJ , , provincial JJ , , state NN and CC local JJ governments NNS in IN the DT jurisdictions NNS in IN which WDT the DT Company NN operates VVZ . SENT These DT laws NNS and CC regulations NNS are VBP extensive JJ and CC govern VV prospecting VVG , , development NN , , production NN , , exports NNS , , taxes NNS , , labour NN standards NNS , , occupational JJ health NN and CC safety NN , , waste NN disposal NN , , toxic JJ substances NNS , , environmental JJ protection NN , , mine NN safety NN and CC other JJ matters NNS . SENT Compliance NN with IN such JJ laws NNS and CC regulations NNS increases VVZ the DT costs NNS of IN planning NN , , designing VVG , , drilling NN , , developing VVG , , constructing VVG , , operating NN , , closing NN , , reclaiming VVG and CC rehabilitating VVG mines NNS and CC other JJ facilities NNS . SENT Amendments NNS to TO current JJ laws NNS and CC regulations NNS governing VVG operations NNS and CC activities NNS of IN mining NN companies NNS or CC more JJR stringent JJ implementation NN or CC interpretation NN thereof RB could MD have VH a DT material JJ adverse JJ impact NN on IN the DT Company NN , , cause VV a DT reduction NN in IN levels NNS of IN production NN and CC delay VV or CC prevent VV the DT development NN of IN new JJ mining NN properties NNS . SENT In IN January NP 2003 CD , , the DT Company NN received VVD a DT notice NN of IN infraction NN from IN the DT Quebec NP Ministry NP of IN the DT Environment NP in IN connection NN with IN a DT controlled VVN discharge NN of IN water NN of IN excess JJ toxicity NN , , which WDT was VBD carried VVN out RP over IN a DT three CD month NN period NN in IN the DT summer NN of IN 2002 CD . SENT The DT purpose NN of IN the DT discharge NN was VBD to TO establish VV favourable JJ construction NN conditions NNS for IN the DT increase NN of IN tailings NN pond NN capacity NN in IN the DT autumn NN of IN 2002 CD . SENT No DT fine NN was VBD payable JJ in IN respect NN of IN the DT notice NN of IN infraction NN , , however RB , , the DT notice NN required VVD production NN of IN a DT report NN detailing VVG the DT causes NNS of IN algae NN proliferation NN at IN the DT LaRonde NP Mine NP , , which WDT was VBD delivered VVN in IN 2003 CD . SENT The DT Company NN expects VVZ to TO receive VV a DT further JJR notice NN of IN infraction NN in IN connection NN with IN a DT subsequent JJ controlled JJ discharge NN that WDT occurred VVD during IN the DT third JJ and CC forth RB quarters NNS of IN 2004 CD . SENT Under IN mine NN closure NN plans VVZ originally RB submitted VVN to TO the DT Minister NP of IN Natural NP Resources NPS in IN Quebec NP , , the DT estimated JJ current JJ reclamation NN costs NNS for IN the DT LaRonde NP Division NP and CC the DT Bousquet NP property NN are VBP approximately RB 18 CD million CD and CC 3 CD million CD respectively RB . SENT The DT plans NNS and CC related JJ asset NN reclamation NN costs NNS submitted VVN have VHP subsequently RB been VBN amended VVN to TO reflect VV changes NNS in IN circumstances NNS surrounding VVG each DT property NN . SENT These DT amended VVN reclamation NN plans NNS are VBP subject JJ to TO approval NN by IN the DT Minister NP of IN Natural NP Resources NPS and CC there EX can MD be VB no DT assurance NN that IN the DT Minister NP of IN Natural NP Resources NPS will MD not RB impose VV additional JJ reclamation NN obligations NNS with IN attendant JJ higher JJR costs NNS . SENT In IN addition NN , , the DT Minister NP of IN Natural NP Resources NPS may MD require VV that IN the DT Company NN provide VV financial JJ assurances NNS to TO support VV such JJ plans NNS . SENT At IN December NP 31 CD , , 2004 CD , , the DT Company NN had VHD a DT total JJ reclamation NN provision NN of IN 11 CD . SENT 6 CD million CD , , with IN 5 CD . SENT 8 CD million CD allocated VVN for IN the DT LaRonde NP Division NP and CC 5 CD . SENT 8 CD million CD allocated VVN for IN Bousquet NP . SENT Prior RB to TO January NP 1 CD , , 2003 CD , , reclamation NN costs NNS were VBD accrued VVN on IN an DT undiscounted JJ unit NN of IN production NN basis NN , , using VVG proven JJ and CC probable JJ reserves NNS as IN the DT base NN . SENT On IN this DT basis NN , , the DT Company NN recorded VVD its PP$ annual JJ reclamation NN provision NN for IN the DT LaRonde NP Division NP at IN approximately RB 5 CD per IN ounce NN of IN gold NN produced VVD . SENT Effective JJ January NP 1 CD , , 2003 CD , , the DT Company NN adopted VVD the DT provisions NNS of IN Financial NP Accounting NP Standards NPS Board NP Statement NN No RB . SENT 143 CD relating VVG to TO asset NN retirement NN obligations NNS , , which WDT applies VVZ to TO long RB lived VVN assets NNS such JJ as IN mines NNS . SENT See VV Note VV 5 CD to TO the DT table NN under IN the DT caption NN Item NN 3 CD . SENT Key NP Information NP Selected VVD Financial NP Data NP for IN an DT explanation NN of IN this DT standard NN . SENT The DT application NN of IN the DT new JJ provisions NNS resulted VVN in IN the DT Company NN recording VVG a DT one CD time NN , , net JJ of IN tax NN , , non JJ cash NN charge NN of IN 1 CD . SENT 7 CD million CD on IN January NP 1 CD , , 2003 CD reflecting VVG the DT cumulative JJ effect NN of IN adopting VVG this DT standard NN . SENT 9 CD Currency NN Fluctuations NNS The DT Company's NP operating NN results NNS and CC cash NN flow NN are VBP significantly RB affected VVN by IN changes NNS in IN the DT Canadian JJ dollar NN US NP dollar NN exchange NN rate NN . SENT Exchange NP rate NN movements NNS can MD have VH a DT significant JJ impact NN as IN all DT of IN the DT Company's NP revenues NNS are VBP earned VVN in IN US NP dollars NNS but CC most JJS of IN its PP$ operating NN and CC capital NN costs NNS are VBP in IN Canadian JJ dollars NNS . SENT The DT Canadian JJ dollar NN US NP dollar NN exchange NN rate NN has VHZ varied VVN significantly RB over IN the DT last JJ several JJ years NNS . SENT During IN the DT period NN from IN January NP 1 CD , , 1999 CD to TO December NP 31 CD , , 2004 CD , , the DT Noon NP Buying NP Rate NP fluctuated VVD from IN a DT high NN of IN C NP 1 CD . SENT 6128 CD to TO a DT low NN of IN C NP 1 CD . SENT 1775 CD . SENT Historical JJ fluctuations NNS in IN the DT Canadian JJ dollar NN US NP dollar NN exchange NN rate NN are VBP not RB necessarily RB indicative JJ of IN future JJ exchange NN rate NN fluctuations NNS . SENT Based VVN on IN the DT Company's NP anticipated VVD 2005 CD after IN tax NN operating NN results NNS , , a DT 10 CD change NN in IN the DT average JJ annual JJ Canadian JJ dollar NN US NP dollar NN exchange NN rate NN would MD affect VV net JJ income NN by IN approximately RB 0 CD . SENT 10 CD per IN share NN . SENT To TO mitigate VV its PP$ foreign JJ exchange NN risk NN and CC minimize VV the DT impact NN of IN exchange NN rate NN movements NNS on IN operating VVG results NNS and CC cash NN flow NN , , the DT Company NN has VHZ periodically RB used VVN foreign JJ currency NN options NNS and CC forward RB foreign JJ exchange NN contracts NNS to TO purchase VV Canadian JJ dollars NNS . SENT However RB , , there EX can MD be VB no DT assurance NN that IN the DT Company's NP foreign JJ exchange NN derivatives NNS strategies NNS will MD be VB successful JJ or CC that DT foreign JJ exchange NN fluctuations NNS will MD not RB materially RB adversely RB affect VV the DT Company's NP financial JJ performance NN and CC results NNS of IN operations NNS . SENT Interest NP Rate NP Fluctuations NNS Fluctuations NNS in IN interest NN rates NNS can MD affect VV the DT Company's NP results NNS of IN operations NNS and CC cash NN flows NNS . SENT The DT Company's NP 4 CD . SENT 50 CD convertible JJ subordinated JJ debentures NNS due JJ 2012 CD are VBP at IN a DT fixed JJ rate NN of IN interest NN , , however RB these DT fixed JJ rate NN payments NNS have VHP been VBN swapped VVN for IN variable JJ rate NN payments NNS see VVP note NN 4 CD a DT to TO the DT consolidated JJ financial JJ statements NNS in IN Item NN 18 CD to TO this DT Form NN 20 CD F NN and CC thus RB are VBP subject JJ to TO risks NNS inherent JJ with IN interest NN rate NN fluctuations NNS . SENT The DT Company's NP bank NN debt NN and CC cash NN balances NNS are VBP subject JJ to TO variable JJ interest NN rates NNS . SENT Potential JJ Unenforceability NN of IN Civil JJ Liabilities NNS and CC Judgments NNS The DT Company NN is VBZ incorporated VVN under IN the DT laws NNS of IN the DT Province NP of IN Ontario NP , , Canada NP . SENT All DT but CC one CD of IN the DT Company's NP directors NNS and CC officers NNS and CC certain JJ of IN the DT experts NNS named VVN in IN this DT Form NP 20 CD F NN are VBP residents NNS of IN Canada NP . SENT Also RB , , almost RB all RB of IN the DT Company's NP assets NNS and CC the DT assets NNS of IN these DT persons NNS are VBP located VVN outside IN of IN the DT United NP States NPS . SENT As IN a DT result NN , , it PP may MD be VB difficult JJ for IN shareholders NNS to TO initiate VV a DT lawsuit NN within IN the DT United NP States NPS against IN these DT non JJ United NP States NPS residents NNS , , or CC to TO enforce VV judgments NNS in IN the DT United NP States NPS against IN the DT Company NN or CC these DT persons NNS which WDT are VBP obtained VVN in IN a DT United NP States NPS court NN . SENT Our PP$ Canadian JJ counsel NN has VHZ advised VVN us PP that IN a DT monetary JJ judgment NN of IN a DT U NP . SENT S NP . SENT court NN predicated VVN solely RB upon IN the DT civil JJ liability NN provisions NNS of IN U NP . SENT S NP . SENT federal JJ securities NNS laws NNS would MD likely RB be VB enforceable JJ in IN Canada NP if IN the DT U NP . SENT S NP . SENT court NN in IN which WDT the DT judgment NN was VBD obtained VVN had VHD a DT basis NN for IN jurisdiction NN in IN the DT matter NN that WDT was VBD recognized VVN by IN a DT Canadian JJ court NN for IN such JJ purposes NNS . SENT We PP cannot NN assure VV you PP that IN this DT will MD be VB the DT case NN . SENT It PP is VBZ less RBR certain JJ that IN an DT action NN could MD be VB brought VVN in IN Canada NP in IN the DT first JJ instance NN on IN the DT basis NN of IN liability NN predicated VVN solely RB upon IN such JJ laws NNS . SENT ITEM NN 4 CD . SENT INFORMATION NN ON IN THE DT COMPANY NN History NN and CC Development NP of IN the DT Company NN The DT Company NN is VBZ an DT established JJ Canadian JJ gold NN producer NN with IN mining NN operations NNS located VVN in IN northwestern JJ Quebec NN and CC exploration NN and CC development NN activities NNS in IN Canada NP , , the DT western JJ United NP States NPS and CC Northern NP Mexico NP . SENT The DT Company's NP operating NN history NN includes VVZ over IN three CD decades NNS of IN continuous JJ gold NN production NN primarily RB from IN underground JJ operations NNS . SENT Since IN its PP$ formation NN in IN 1972 CD , , the DT Company NN has VHZ produced VVN over IN 3 CD . SENT 5 CD million CD ounces NNS of IN gold NN . SENT The DT Company NN believes VVZ it PP is VBZ currently RB one CD of IN the DT lowest JJS total JJ cash NN cost NN producers NNS in IN the DT North JJ American JJ gold NN mining NN industry NN . SENT In IN 2004 CD , , the DT Company NN produced VVD 271 CD , , 567 CD ounces NNS of IN gold NN at IN a DT total JJ cash NN cost NN of IN 56 CD per IN ounce NN , , net JJ of IN revenues NNS received VVN from IN the DT sale NN of IN silver NN , , zinc NN and CC copper NN byproducts NNS . SENT For IN 2005 CD , , the DT Company NN expects VVZ total JJ cash NN costs NNS per IN ounce NN of IN gold NN produced VVN to TO be VB between IN 135 CD and CC 145 CD . SENT These DT expected VVN increased JJ costs NNS compared VVN to TO 2004 CD are VBP due JJ to TO lower VV assumed VVN byproduct NN metals NNS prices NNS than IN those DT realized VVN in IN 2004 CD and CC a DT reduction NN in IN the DT contribution NN of IN foreign JJ exchange NN hedging VVG activities NNS . SENT The DT Company NN has VHZ traditionally RB sold VVN all DT of IN its PP$ production NN at IN the DT spot NN price NN of IN gold NN due JJ to TO its PP$ general JJ policy NN not RB to TO sell VV forward RB its PP$ future JJ gold NN production NN . SENT For IN a DT definition NN of IN terms NNS used VVN in IN the DT following VVG discussion NN , , see VVP Property NP , , Plant NP and CC Equipment NP Mineral NP Reserve NP and CC Mineral NP Resource NP . SENT 10 CD The NP Company's NP principal JJ operating NN divisions NNS are VBP the DT LaRonde NP Division NP , , the DT Regional NP Development NP Division NP and CC the DT Exploration NP Division NP . SENT The DT LaRonde NP Division NP consists VVZ of IN the DT LaRonde NP Mine NP and CC the DT adjacent JJ El NP Coco NP and CC Terrex NP properties NNS , , each DT of IN which WDT is VBZ 100 CD owned VVN and CC operated VVN by IN the DT Company NN . SENT The DT LaRonde NP Mine NP , , with IN its PP$ single JJ production NN shaft VV the DT Penna NP Shaft NN , , currently RB accounts NNS for IN all DT of IN the DT Company's NP gold NN production NN . SENT Since IN the DT commissioning VVG of IN the DT mill NN in IN 1988 CD , , the DT LaRonde NP Division NP has VHZ produced VVN over IN 2 CD . SENT 5 CD million CD ounces NNS of IN gold NN . SENT In IN March NP 2000 CD , , the DT Company NN completed VVD the DT Penna NP Shaft NN at IN the DT LaRonde NP Mine NP to TO a DT depth NN of IN 7 CD , , 380 CD feet NNS , , which WDT the DT Company NN believes VVZ makes VVZ it PP the DT deepest JJS single JJ lift NN shaft NN in IN the DT Western NP Hemisphere NP . SENT Production NN was VBD expanded VVN at IN the DT LaRonde NP Mine NP to TO 7 CD , , 000 CD tons NNS of IN ore NN treated VVN per IN day NN in IN October NP 2002 CD . SENT An DT extensive JJ surface NN and CC underground JJ exploratory JJ drilling NN program NN to TO delineate VV additional JJ mineral NN reserve NN began VVD in IN 1990 CD and CC is VBZ continuing VVG . SENT The DT program NN successfully RB outlined VVD several JJ ore NN zones NNS and CC a DT large JJ mineral NN resource NN to TO the DT east JJ of IN what WP was VBD , , at IN the DT time NN , , the DT main JJ production NN shaft NN . SENT As RB at IN December NP 31 CD , , 2004 CD , , the DT LaRonde NP Division NP had VHD established VVN proven JJ and CC probable JJ mineral NN reserves NNS of IN approximately RB 5 CD . SENT 1 CD million CD ounces NNS of IN contained JJ gold NN . SENT The DT Company's NP strategy NN is VBZ to TO focus VV on IN the DT continued JJ exploration NN , , development NN and CC expansion NN of IN its PP$ properties NNS in IN the DT Abitibi NP region NN of IN Quebec NP in IN which WDT the DT LaRonde NP Mine NP is VBZ situated VVN , , with IN a DT view NN to TO increasing VVG annual JJ gold NN production NN and CC gold NN mineral NN reserve NN . SENT The DT Company NN also RB plans VVZ to TO pursue VV opportunities NNS for IN growth NN in IN gold JJ production NN and CC gold NN reserves NNS through IN the DT acquisition NN or CC development NN of IN advanced JJ exploration NN properties NNS , , development NN properties NNS , , producing VVG properties NNS and CC other JJ mining NN businesses NNS in IN the DT Americas NPS or CC Europe NP . SENT Expenditures NNS on IN the DT expansion NN of IN the DT LaRonde NP Mine NP and CC exploration NN and CC development NN in IN the DT surrounding VVG region NN in IN the DT last JJ three CD fiscal JJ years NNS were VBD 53 CD million CD , , 44 CD million CD and CC 63 CD million CD , , respectively RB . SENT The DT 2004 CD expenditures NNS include VVP 31 CD million CD of IN capital NN expenditures NNS at IN the DT LaRonde NP Mine NP , , 8 CD million CD at IN the DT LaRonde NP II NP project NN , , 8 CD million CD for IN the DT development NN of IN the DT Lapa NP property NN , , 4 CD million CD for IN the DT development NN of IN the DT Goldex NP property NN , , and CC 2 CD million CD for IN the DT exploration NN of IN properties NNS in IN the DT surrounding VVG region NN . SENT Budgeted VVN 2005 CD exploration NN and CC capital NN expenditures NNS of IN 42 CD . SENT 0 CD million CD consist VVP of IN 14 CD . SENT 1 CD million CD of IN sustaining VVG capital NN expenditures NNS at IN the DT LaRonde NP Mine NP , , 12 CD . SENT 7 CD million CD on IN projects NNS relating VVG to TO the DT LaRonde NP II NP project NN , , 12 CD . SENT 1 CD million CD at IN the DT Lapa NP property NN , , 1 CD . SENT 5 CD million CD on IN bulk JJ sample NN and CC engineering NN projects NNS at IN the DT Goldex NP property NN and CC 1 CD . SENT 6 CD million CD on IN drilling NN at IN the DT Bousquet NP and CC Ellison NP properties NNS . SENT The DT financing NN for IN these DT expenditures NNS is VBZ expected VVN to TO be VB from IN internally RB generated VVN cash NN flow NN from IN operations NNS and CC from IN the DT Company's NP existing JJ cash NN balances NNS . SENT Depending VVG on IN the DT success NN of IN the DT exploration NN programs NNS at IN this DT and CC other JJ properties NNS , , the DT Company NN may MD be VB required VVN to TO make VV additional JJ capital NN expenditures NNS for IN exploration NN , , development NN and CC preproduction NN . SENT In IN addition NN , , the DT Company NN continuously RB evaluates VVZ opportunities NNS to TO make VV strategic JJ acquisitions NNS . SENT In IN the DT second JJ quarter NN of IN 2004 CD , , the DT Company NN acquired VVD an DT ownership NN interest NN in IN Riddarhyttan NP Resources NPS AB NP Riddarhyttan NP , , representing VVG 13 CD . SENT 8 CD of IN its PP$ outstanding JJ shares NNS . SENT In IN late JJ December NP 2004 CD , , Riddarhyttan NP concluded VVD a DT rights NNS offering NN for IN 7 CD . SENT 5 CD million CD shares NNS pursuant JJ to TO which WDT the DT Company NN raised VVD its PP$ ownership NN level NN to TO 14 CD of IN Riddarhyttan's NP outstanding JJ shares NNS . SENT In IN connection NN with IN this DT acquisition NN , , two CD representatives NNS of IN the DT Company NN were VBD elected VVN to TO Riddarhyttan's NP board NN of IN directors NNS . SENT Riddarhyttan NP is VBZ a DT precious JJ and CC base JJ metals NNS exploration NN and CC development NN company NN with IN a DT focus NN on IN the DT Nordic JJ region NN of IN Europe NP . SENT Its PP$ shares NNS are VBP listed VVN on IN the DT Stockholm NP Stock NP Exchange NP under IN the DT symbol NN RHYT NP . SENT Riddarhyttan NP is VBZ the DT 100 CD owner NN of IN the DT Suurikuusikko NP gold NN deposit NN , , located VVN approximately RB 550 CD miles NNS north RB of IN Helsinki NP near IN the DT town NN of IN Kittil NP in IN Finnish JJ Lapland NN . SENT Riddarhyttan's NP property NN position NN in IN the DT Suurikuusikko NP area NN consists VVZ of IN 22 CD contiguous JJ claims NNS approximately RB 4 CD , , 261 CD acres NNS with IN similar JJ Precambrian JJ greenstone NN belt NN geology NN and CC topography NN to TO the DT Company's NP land NN package NN in IN the DT Abitibi NP region NN of IN Quebec NP . SENT In IN the DT first JJ quarter NN of IN 2005 CD , , the DT Company NN entered VVN into IN an DT option NN agreement NN with IN Industrias NP Penoles NP S NP . SENT A DT . SENT de NP C NP . SENT V NN . SENT Penoles NP to TO acquire VV the DT Pinos NP Altos NP project NN in IN northern JJ Mexico NP . SENT The DT Pinos NP Altos NP project NN is VBZ located VVN on IN a DT 27 CD , , 000 CD acre NN property NN in IN the DT Sierra NP Madre NP gold NN belt NN , , 170 CD miles NNS west RB of IN the DT city NN of IN Chihuahua NP in IN northern JJ Mexico NP . SENT Under IN the DT terms NNS of IN the DT option NN agreement NN , , the DT Company NN will MD spend VV 2 CD . SENT 8 CD million CD on IN a DT 55 CD , , 000 CD foot NN diamond NN drilling NN program NN over IN the DT five CD months NNS after IN executing VVG the DT option NN agreement NN subject JJ to TO extension NN in IN certain JJ events NNS . SENT After IN the DT completion NN of IN the DT five CD month NN drilling NN program NN , , the DT Company NN will MD have VH a DT two CD month NN period NN in IN which WDT to TO acquire VV Penoles NP 100 CD interest NN in IN the DT project NN . SENT If IN the DT Company NN exercises VVZ its PP$ option NN to TO purchase VV the DT Pinos NP Altos NP project NN , , the DT purchase NN price NN will MD be VB approximately RB 65 CD million CD , , which WDT will MD be VB comprised VVN of IN 39 CD million CD in IN cash NN and CC 1 CD , , 809 CD , , 350 CD shares NNS of IN the DT Company NN . SENT The DT Company NN has VHZ no DT other JJ commitments NNS or CC agreements NNS with IN respect NN to TO any DT other JJ acquisitions NNS . SENT 11 CD The NP Company's NP Regional NP Development NP Division NP focuses VVZ on IN the DT development NN and CC management NN of IN the DT Company's NP advanced VVD projects NNS in IN the DT Abitibi NP region NN . SENT The DT Regional NP Development NP Division NP currently RB is VBZ responsible JJ for IN the DT Company's NP operations NNS in IN respect NN of IN the DT LaRonde NP II NP , , Lapa NP and CC Goldex NP projects NNS . SENT The DT Company NN , , through IN its PP$ Exploration NP Division NP , , focuses VVZ its PP$ exploration NN activities NNS primarily RB on IN the DT identification NN of IN new JJ mineral NN reserve NN , , mineral NN resource NN and CC development NN opportunities NNS in IN the DT proven JJ producing VVG regions NNS of IN Canada NP , , with IN a DT particular JJ emphasis NN on IN northwestern JJ Quebec NP . SENT The DT Company NN currently RB directly RB manages VVZ exploration NN on IN 56 CD properties NNS in IN central JJ and CC eastern JJ Canada NP and CC the DT western JJ United NP States NPS , , including VVG properties NNS acquired VVN from IN Contact NP Diamond NP Corporation NP formerly RB Sudbury NP Contact NP Mines NPS Limited NP Contact NP Diamond NP in IN September NP 2004 CD . SENT The DT Company's NP Reno NP , , Nevada NP exploration NN office NN , , acquired VVN in IN that DT transaction NN , , is VBZ focused VVN on IN evaluating VVG exploration NN opportunities NNS in IN the DT western JJ United NP States NPS and CC northern JJ Mexico NP . SENT The DT Company NN was VBD formed VVN by IN articles NNS of IN amalgamation NN under IN the DT laws NNS of IN the DT Province NP of IN Ontario NP on IN June NP 1 CD , , 1972 CD as IN a DT result NN of IN the DT amalgamation NN of IN Agnico NP Mines NPS Limited NP Agnico NP Mines NP and CC Eagle NP Gold NP Mines NPS Limited NP Eagle NP . SENT Agnico NP Mines NP was VBD incorporated VVN under IN the DT laws NNS of IN the DT Province NP of IN Ontario NP on IN January NP 21 CD , , 1953 CD under IN the DT name NN Cobalt NN Consolidated NP Mining NP Corporation NP Limited NP . SENT Eagle NP was VBD incorporated VVN under IN the DT laws NNS of IN the DT Province NP of IN Ontario NP on IN August NP 14 CD , , 1945 CD . SENT On IN December NP 19 CD , , 1989 CD , , Agnico NP Eagle NP acquired VVD the DT remaining JJ 57 CD interest NN in IN Dumagami NP Mines NPS Limited NP not RB already RB owned VVN by IN it PP as IN a DT consequence NN of IN the DT amalgamation NN of IN Dumagami NP Mines NPS Limited NP with IN a DT wholly RB owned VVN subsidiary NN of IN Agnico NP Eagle NP , , to TO continue VV as IN one CD company NN under IN the DT name NN Dumagami NP Mines NP Inc NP . SENT Dumagami NP . SENT On IN December NP 29 CD , , 1992 CD , , Dumagami NP transferred VVD all DT of IN its PP$ property NN and CC assets NNS , , including VVG the DT LaRonde NP Mine NP , , to TO Agnico NP Eagle NP and CC was VBD subsequently RB dissolved VVN . SENT On IN December NP 8 CD , , 1993 CD , , the DT Company NN acquired VVD the DT remaining JJ 46 CD . SENT 3 CD interest NN in IN Goldex NP Mines NPS Limited NP not RB already RB owned VVN by IN it PP , , as IN a DT consequence NN of IN the DT amalgamation NN of IN Goldex NP Mines NPS Limited NP with IN a DT wholly RB owned VVN subsidiary NN of IN the DT Company NN , , to TO continue VV as IN one CD company NN under IN the DT name NN Goldex NP Mines NP Limited NP . SENT On IN January NP 1 CD , , 1996 CD , , the DT Company NN amalgamated VVN with IN two CD wholly RB owned VVN subsidiaries NNS , , including VVG Goldex NP Mines NPS Limited NP . SENT In IN October NP 2001 CD , , pursuant JJ to TO a DT plan NN of IN arrangement NN , , the DT Company NN amalgamated VVN with IN an DT associated VVN corporation NN , , Mentor NP Exploration NP and CC Development NP Co NP . SENT , , Limited NP Mentor NP . SENT In IN connection NN with IN the DT arrangement NN , , the DT Company NN issued VVD 369 CD , , 348 CD common JJ shares NNS in IN consideration NN for IN the DT acquisition NN of IN all DT of IN the DT issued VVN and CC outstanding JJ shares NNS of IN Mentor NP that WDT it PP did VVD not RB already RB own JJ . SENT Effective JJ February NP 11 CD , , 1999 CD , , two CD subsidiaries NNS of IN the DT Company NN , , Sudbury NP Contact NP Mines NP , , Limited NP and CC Silver NP Century NP Explorations NNS Ltd NP . SENT Silver NP Century NP , , amalgamated VVD pursuant JJ to TO a DT court NN approved VVD plan NN of IN arrangement NN to TO form VV Contact NP Diamond NP . SENT The DT Company NN has VHZ an DT approximate JJ 44 CD interest NN in IN Contact NP Diamond NP . SENT Contact NP Diamond NP is VBZ a DT junior JJ exploration NN and CC development NN company NN with IN diamond NN properties NNS in IN Ontario NP , , Quebec NP , , Nunavut NP and CC the DT Northwest NP Territories NP . SENT Contact NP Diamond NP is VBZ incorporated VVN under IN the DT laws NNS of IN the DT Province NP of IN Ontario NP and CC is VBZ listed VVN on IN the DT Toronto NP Stock NP Exchange NP the DT TSX NP . SENT The DT Company's NP executive NN and CC registered JJ office NN is VBZ located VVN at IN Suite NP 500 CD , , 145 CD King NP Street NP East NP , , Toronto NP , , Ontario NP , , Canada NP M NP 5 CD C NP 2 CD Y NP 7 CD . SENT telephone NN number NN 416 CD 947 CD 1212 CD . SENT website NN . SENT http NN . SENT www JJ . SENT agnico NP eagle NN . SENT com NN . SENT The DT information NN contained VVN on IN the DT website NN is VBZ not RB part NN of IN this DT Form NP 20 CD F NN . SENT Business NN Overview NN The DT Company NN believes VVZ that IN it PP has VHZ a DT number NN of IN key JJ operating NN strengths NNS that WDT provide VVP distinct JJ competitive JJ advantages NNS . SENT First RB , , the DT Company NN and CC its PP$ predecessors NNS have VHP over IN three CD decades NNS of IN continuous JJ gold NN production NN , , experience NN and CC expertise NN in IN metals NNS mining NN . SENT The DT Company's NP operations NNS are VBP located VVN in IN areas NNS that WDT are VBP supportive JJ of IN the DT mining NN industry NN . SENT These DT operations NNS are VBP concentrated VVN in IN areas NNS among IN North NP America's NP principal JJ gold NN producing VVG regions NNS . SENT Second RB , , the DT Company NN believes VVZ that IN it PP is VBZ one CD of IN the DT lowest JJS total JJ cash NN cost NN producers NNS in IN the DT North JJ American JJ gold NN mining NN industry NN with IN total JJ cash NN costs NNS per IN ounce NN of IN gold NN produced VVN at IN 56 CD for IN 2004 CD . SENT The DT Company NN has VHZ achieved VVN significant JJ improvements NNS in IN these DT measures NNS through IN the DT strength NN of IN its PP$ byproduct NN revenue NN , , the DT economies NNS of IN scale NN afforded VVN by IN its PP$ large JJ single JJ shaft NN mine NN and CC its PP$ dedication NN to TO cost VV efficient JJ mining NN operations NNS . SENT In IN addition NN , , the DT Company NN believes VVZ its PP$ highly RB motivated VVN work NN force NN contributes VVZ significantly RB to TO continued VVN 12 CD operational JJ improvements NNS and CC to TO the DT Company's NP low JJ cost NN producer NN status NN . SENT For IN 2005 CD , , the DT Company NN expects VVZ total JJ cash NN cost NN per IN ounce NN of IN gold NN produced VVN to TO be VB between IN 135 CD and CC 145 CD . SENT Third JJ , , the DT Company's NP existing JJ operations NNS at IN the DT LaRonde NP Division NP provide VV a DT sound JJ economic JJ base NN for IN additional JJ mineral NN reserve NN and CC production NN development NN at IN the DT property NN and CC in IN the DT Abitibi NP region NN of IN northwestern JJ Quebec NP . SENT The DT experience NN gained VVD through IN building VVG and CC operating VVG the DT LaRonde NP Mine NP , , along RB with IN the DT LaRonde NP Mine's NP extensive JJ infrastructure NN , , are VBP expected VVN to TO support VV the DT development NN of IN new JJ projects NNS in IN the DT region NN including VVG the DT Lapa NP property NN , , the DT Goldex NP property NN and CC the DT development NN project NN at IN LaRonde NP to TO access VV the DT Company's NP mineral NN resource NN base NN located VVN outside IN of IN the DT Penna NP Shaft NN infrastructure NN the DT LaRonde NP II NP project NN . SENT Fourth JJ , , the DT Company's NP senior JJ management NN team NN has VHZ an DT average NN of IN 16 CD years NNS of IN operating NN and CC exploration NN experience NN in IN the DT mining NN industry NN . SENT Management's NP significant JJ experience NN has VHZ been VBN instrumental JJ in IN the DT Company's NP historical JJ growth NN and CC provides VVZ a DT solid JJ base NN upon IN which WDT to TO expand VV the DT Company's NP operations NNS . SENT The DT geological JJ knowledge NN that IN management NN has VHZ gained VVN through IN its PP$ years NNS of IN experience NN in IN mining VVG and CC developing VVG the DT LaRonde NP Division NP is VBZ expected VVN to TO benefit VV the DT Company's NP current JJ expansion NN program NN in IN the DT region NN . SENT The DT Company NN believes VVZ it PP can MD benefit VV not RB only RB from IN the DT existing JJ infrastructure NN at IN its PP$ mines NNS , , but CC also RB from IN geological JJ knowledge NN that IN it PP has VHZ gained VVN in IN mining VVG and CC developing VVG its PP$ properties NNS . SENT The DT Company's NP strategy NN is VBZ to TO capitalize VV on IN its PP$ mining NN expertise NN to TO exploit VV fully RB the DT potential NN of IN its PP$ properties NNS . SENT The DT Company's NP goal NN is VBZ to TO apply VV the DT proven JJ operating NN principles NNS of IN the DT LaRonde NP Division NP to TO each DT of IN its PP$ existing JJ and CC future JJ properties NNS . SENT The DT Company NN continues VVZ to TO focus VV its PP$ resources NNS and CC efforts NNS on IN the DT exploration NN and CC development NN of IN its PP$ properties NNS in IN the DT Abitibi NP region NN of IN Quebec NP , , including VVG LaRonde NP II NP , , the DT Lapa NP property NN , , the DT Goldex NP property NN and CC the DT LaRonde NP Mine NP with IN a DT view NN to TO increasing VVG annual JJ gold NN production NN and CC gold NN mineral NN reserve NN . SENT The DT Company NN is VBZ evaluating VVG these DT properties NNS as IN potential JJ growth NN opportunities NNS in IN the DT Abitibi NP region NN . SENT LaRonde's NNS proven JJ and CC probable JJ gold JJ mineral NN reserves NNS on IN contained JJ gold NN basis NN were VBD essentially RB unchanged JJ , , including VVG replacement NN of IN 292 CD , , 858 CD ounces NNS of IN gold NN mined VVN before IN mill NN recoveries NNS and CC smelter NN charges NNS . SENT As IN a DT result NN , , the DT LaRonde NP Division's NP current JJ proven JJ and CC probable JJ mineral NN reserve NN is VBZ estimated VVN to TO contain VV approximately RB 5 CD . SENT 1 CD million CD ounces NNS of IN gold NN , , 63 CD . SENT 4 CD million CD ounces NNS of IN silver NN , , 2 CD . SENT 1 CD billion CD pounds NNS of IN zinc NN and CC almost RB 276 CD . SENT 7 CD million CD pounds NNS of IN copper NN . SENT The DT underground JJ workings NNS at IN the DT Penna NP Shaft NN provide VVP a DT base NN from IN which WDT the DT Company NN conducted VVD its PP$ drilling NN program NN of IN 161 CD , , 000 CD feet NNS in IN 2004 CD and CC will MD conduct VV an DT estimated JJ 174 CD , , 000 CD feet NNS of IN drilling NN in IN 2005 CD . SENT For IN 2004 CD , , capital NN expenditures NNS at IN the DT LaRonde NP Mine NP together RB with IN expenditures NNS on IN regional JJ projects NNS and CC other JJ exploration NN and CC development NN projects NNS were VBD 53 CD million CD , , including VVG 31 CD million CD of IN capital NN expenditures NNS at IN the DT LaRonde NP Mine NP , , 8 CD million CD at IN the DT LaRonde NP II NP project NN , , 8 CD million CD for IN the DT development NN of IN the DT Lapa NP property NN , , 4 CD million CD for IN the DT development NN of IN the DT Goldex NP property NN and CC 2 CD million CD for IN the DT exploration NN and CC development NN of IN surrounding VVG properties NNS . SENT The DT regional JJ development NN team NN continues VVZ to TO evaluate VV the DT LaRonde NP II NP , , Lapa NP and CC Goldex NP development NN projects NNS . SENT The DT Company NN plans VVZ to TO continue VV to TO invest VV in IN sustaining VVG and CC project NN capital NN expenditures NNS at IN the DT LaRonde NP Mine NP together RB with IN regional JJ projects NNS and CC other JJ exploration NN and CC development NN projects NNS . SENT Budgeted VVN 2005 CD exploration NN and CC capital NN expenditures NNS of IN 42 CD . SENT 0 CD million CD consist VVP of IN 14 CD . SENT 1 CD million CD at IN the DT LaRonde NP Mine NP , , 12 CD . SENT 7 CD million CD at IN the DT LaRonde NP II NP project NN , , 12 CD . SENT 1 CD million CD at IN the DT Lapa NP property NN , , 1 CD . SENT 5 CD million CD at IN the DT Goldex NP property NN and CC 1 CD . SENT 6 CD million CD at IN the DT Bousquet NP and CC Ellison NP properties NNS . SENT There EX can MD be VB no DT assurance NN that IN the DT Company NN will MD not RB revise VV its PP$ anticipated JJ capital NN expenditure NN program NN . SENT The DT Company's NP growth NN strategy NN has VHZ been VBN to TO pursue VV the DT expansion NN of IN its PP$ development NN base NN through IN the DT acquisition NN of IN additional JJ properties NNS in IN the DT Americas NPS and CC Europe NP . SENT Historically RB , , the DT Company's NP producing VVG properties NNS have VHP resulted VVN from IN a DT combination NN of IN investments NNS in IN early JJ stage NN exploration NN companies NNS and CC primary JJ exploration NN activities NNS . SENT By IN investing VVG in IN early JJ stage NN exploration NN companies NNS , , the DT Company NN has VHZ been VBN able JJ to TO acquire VV control NN of IN exploration NN properties NNS at IN favourable JJ prices NNS . SENT The DT Company's NP approach NN to TO property NN acquisition NN has VHZ evolved VVN to TO include VV joint JJ ventures NNS and CC partnerships NNS and CC the DT acquisition NN of IN producing VVG properties NNS and CC , , more RBR recently RB , , has VHZ evolved VVN to TO include VV consideration NN of IN properties NNS outside JJ of IN Canada NP and CC the DT United NP States NPS . SENT The DT Company NN is VBZ currently RB considering VVG opportunities NNS to TO acquire VV development NN and CC producing VVG properties NNS in IN the DT Americas NPS and CC Europe NP . SENT Agnico NP Eagle NP mitigates VVZ the DT likelihood NN and CC potential JJ severity NN of IN the DT various JJ risks NNS it PP encounters VVZ in IN its PP$ day NN to TO day NN operations NNS through IN the DT application NN of IN the DT highest JJS standards NNS in IN the DT planning NN , , construction NN and CC operation NN of IN mining NN facilities NNS . SENT In IN addition NN , , emphasis NN is VBZ placed VVN on IN hiring VVG and CC retaining VVG competent JJ personnel NNS and CC developing VVG their PP$ skills NNS through IN training NN in IN safety NN and CC loss NN control NN . SENT Agnico NP Eagle's NP operating NN and CC technical JJ personnel NNS have VHP a DT 13 CD solid JJ track NN record NN of IN developing VVG and CC operating VVG precious JJ metal NN mines NNS and CC the DT LaRonde NP Mine NP has VHZ been VBN recognized VVN for IN its PP$ excellence NN in IN this DT regard NN with IN various JJ safety NN and CC development NN awards NNS . SENT Unfortunately RB , , in IN spite NN of IN extensive JJ efforts NNS to TO ensure VV the DT safety NN of IN employees NNS , , industrial JJ accidents NNS can MD occur VV . SENT In IN the DT first JJ quarter NN of IN 2004 CD , , two CD accidents NNS claimed VVD the DT lives NNS of IN an DT employee NN and CC a DT contract NN miner NN . SENT Quebec's NP Commission NP de FW la FW sant NP et FW de FW la FW s PP curit NP du NP travail NN completed VVD an DT investigation NN into IN these DT accidents NNS , , and CC the DT Company NN paid VVD fines NNS totalling VVG C $ 27 CD , , 500 CD in IN respect NN of IN these DT accidents NNS . SENT Also RB , , in IN January NP 2005 CD , , an DT accident NN claimed VVD the DT life NN of IN an DT employee NN . SENT The DT Commission NP de FW la FW sant NP et FW de FW la FW s PP curit NP du NP travail NN has VHZ initiated VVN an DT investigation NN into IN this DT accident NN . SENT Other JJ than IN the DT investigations NNS discussed VVN above IN , , no DT regulatory JJ or CC other JJ action NN has VHZ been VBN initiated VVN against IN the DT Company NN in IN connection NN with IN these DT industrial JJ accidents NNS . SENT The DT Company's NP LaRonde NP Mine NP remains VVZ one CD of IN the DT safest JJS mines NNS in IN Quebec NP with IN a DT lower JJR accident NN frequency NN index NN than IN the DT provincial JJ mining NN industry NN average NN . SENT Nevertheless RB , , the DT Company NN and CC all DT of IN its PP$ employees NNS continue VVP with IN a DT focused VVN effort NN to TO improve VV workplace NN safety NN . SENT Agnico NP Eagle NP also RB mitigates VVZ some DT of IN the DT Company's NP normal JJ business NN risk NN through IN the DT purchase NN of IN insurance NN coverage NN . SENT An DT Insurable JJ Risk NN Management NP Policy NP , , approved VVN by IN the DT Board NP of IN Directors NPS , , governs VVZ the DT purchase NN of IN insurance NN coverage NN and CC only RB permits VVZ the DT purchase NN of IN coverage NN from IN insurance NN companies NNS of IN the DT highest JJS credit NN quality NN . SENT For IN a DT more RBR complete JJ list NN of IN the DT risk NN factors NNS affecting VVG the DT Company NN , , please VV see VV Item NN 3 CD . SENT Key JJ Information NP Risk NN Factors NNS . SENT Mining NP Legislation NP and CC Regulation NP The DT mining NN industry NN in IN Canada NP operates VVZ under IN both DT federal JJ and CC provincial JJ legislation NN governing VVG the DT exploration NN , , development NN , , operation NN and CC decommissioning VVG of IN mines NNS and CC mineral NN processing NN facilities NNS . SENT Such JJ legislation NN relates VVZ to TO the DT method NN of IN acquisition NN and CC ownership NN of IN mining NN rights NNS , , labour NN , , occupational JJ or CC worker NN health NN and CC safety NN standards NNS , , royalties NNS , , mining NN , , exports NNS , , reclamation NN , , closure NN and CC rehabilitation NN of IN mines NNS , , and CC other JJ matters NNS . SENT The DT mining NN industry NN in IN Canada NP is VBZ also RB subject JJ to TO extensive JJ laws NNS and CC regulations NNS at IN both CC the DT federal JJ and CC provincial JJ levels NNS concerning VVG the DT protection NN of IN the DT environment NN . SENT The DT primary JJ federal JJ and CC provincial JJ regulatory JJ authorities NNS with IN jurisdiction NN over IN the DT Company's NP mining NN operations NNS in IN respect NN of IN environmental JJ matters NNS are VBP the DT Department NP of IN Fisheries NNS and CC Oceans NNS , , the DT Quebec NP Ministry NP of IN the DT Environment NP and CC the DT Quebec NP Ministry NP of IN Natural NP Resources NPS . SENT The DT construction NN , , development NN and CC operation NN of IN a DT mine NN , , mill NN or CC refinery NN requires VVZ compliance NN with IN applicable JJ environmental JJ laws NNS and CC regulations NNS and CC or CC review VV processes NNS including VVG the DT obtaining VVG of IN land NN use NN permits NNS , , water NN permits NNS , , air NN emissions NNS certifications NNS , , hazardous JJ substances NNS management NN and CC similar JJ authorizations NNS from IN various JJ governmental JJ agencies NNS . SENT Environmental JJ laws NNS and CC regulations NNS impose VV high JJ standards NNS on IN the DT mining NN industry NN to TO reduce VV or CC eliminate VV the DT effects NNS of IN waste NN generated VVN by IN mining NN and CC processing NN operations NNS and CC subsequently RB deposited VVN on IN the DT ground NN or CC emitted VVN into IN the DT air NN or CC water NN . SENT Laws NNS and CC regulations NNS regarding VVG the DT decommissioning VVG , , reclamation NN and CC rehabilitation NN of IN mines NNS may MD require VV approval NN of IN reclamation NN plans NNS , , the DT provision NN of IN financial JJ assurance NN and CC the DT long JJ term NN management NN of IN former JJ mines NNS . SENT In IN Quebec NP , , mining NN rights NNS are VBP governed VVN by IN Mining NP Act NP Quebec NP . SENT In IN 1966 CD , , the DT mining NN concession NN system NN set VVN out RP for IN Crown NP lands NNS containing VVG mineralized VVN zones NNS by IN the DT Mining NP Act NP Quebec NP was VBD replaced VVN by IN a DT system NN of IN claims NNS and CC mining NN leases NNS . SENT A DT claim NN entitles VVZ its PP$ holder NN to TO explore VV for IN minerals NNS on IN the DT subject JJ land NN . SENT It PP remains VVZ in IN force NN for IN a DT term NN of IN two CD years NNS from IN the DT date NN it PP is VBZ registered VVN and CC may MD be VB renewed VVN indefinitely RB subject JJ to TO continued JJ exploration NN works NNS in IN relation NN thereto RB . SENT A DT mining NN lease NN entitles VVZ its PP$ holder NN to TO mine NN and CC remove VV valuable JJ mineral NN substances NNS from IN the DT subject JJ land NN . SENT Leases NNS are VBP granted VVN initially RB for IN a DT term NN of IN 20 CD years NNS and CC are VBP renewable JJ up RB to TO three CD times NNS , , each DT for IN a DT duration NN of IN 10 CD years NNS . SENT 14 CD Organizational JJ Structure NN The DT Company's NP only JJ significant JJ associate NN is VBZ Contact NP Diamond NP formerly RB Sudbury NP Contact NP Mines NPS Limited NP , , a DT public JJ company NN listed VVN on IN the DT TSX NP under IN the DT symbol NN CO NP . SENT The DT Company NN has VHZ an DT approximate JJ 44 CD interest NN in IN Contact NP Diamond NP . SENT Contact NP Diamond NP is VBZ an DT exploration NN and CC development NN company NN with IN diamond NN properties NNS in IN Ontario NP , , Quebec NP , , Nunavut NP and CC the DT Northwest NP Territories NP . SENT Contact NP Diamond NP is VBZ a DT corporation NN incorporated VVN under IN the DT laws NNS of IN the DT Province NP of IN Ontario NP . SENT Historically RB and CC until IN August NP 31 CD , , 2003 CD Contact NP Diamond NP had VHD been VBN a DT subsidiary NN of IN the DT Company NN . SENT However RB in IN 2003 CD , , through IN a DT series NN of IN equity NN financings NNS , , Contact NP Diamond NP became VVD more RBR financially RB independent JJ and CC the DT Company's NP ownership NN was VBD diluted VVN to TO less JJR than IN 50 CD . SENT Accordingly RB , , the DT Company NN no RB longer JJR had VHD a DT controlling JJ financial JJ interest NN in IN Contact NP Diamond NP and CC therefore RB ceased VVD consolidating VVG Contact NP Diamond's NP operations NNS with IN its PP$ own JJ . SENT The DT Company NN now RB uses VVZ the DT equity NN method NN to TO account VV for IN its PP$ interest NN in IN Contact NP Diamond NP . SENT Each DT member NN of IN Contact NP Diamond's NP management NN team NN other JJ than IN Matthew NP Manson NP , , its PP$ recently RB appointed VVN President NP and CC Chief NP Operating NP Officer NP and CC Graham NP Long NP , , its PP$ recently RB appointed VVN Vice NP President NP , , Exploration NP , , a DT former JJ employee NN of IN the DT Company NN is VBZ also RB a DT member NN of IN the DT management NN team NN of IN the DT Company NN , , three CD of IN its PP$ directors NNS are VBP also RB directors NNS of IN the DT Company NN including VVG two CD directors NNS of IN the DT Company NN who WP are VBP also RB officers NNS of IN the DT Company NN , , and CC one CD of IN its PP$ directors NNS is VBZ also RB an DT officer NN of IN the DT Company NN . SENT In IN total NN , , three CD of IN the DT five CD officers NNS of IN the DT Company NN are VBP also RB officers NNS of IN Contact NP Diamond NP . SENT The DT Company NN does VVZ not RB have VH any DT significant JJ subsidiaries NNS . SENT Property NN , , Plant NP and CC Equipment NP LaRonde NP Division NP Property NP The NP Company's NP LaRonde NP Division NP consists VVZ of IN the DT LaRonde NP property NN , , currently RB the DT Company's NP only JJ material NN property NN , , and CC the DT adjacent JJ El NP Coco NP and CC Terrex NP properties NNS collectively RB the DT LaRonde NP Mine NP , , each DT of IN which WDT is VBZ 100 CD owned VVN and CC operated VVN by IN the DT Company NN . SENT The DT LaRonde NP Mine NP is VBZ situated VVN approximately RB 35 CD miles NNS west RB of IN the DT City NP of IN Val NP d'Or NP in IN northwestern JJ Quebec NN approximately RB 400 CD miles NNS northwest RB of IN Montreal NP , , Canada NP in IN the DT municipalities NNS of IN Preissac NP and CC Cadillac NP . SENT The DT LaRonde NP Mine NP can MD be VB accessed VVN from IN either DT Val NP d'Or NP or CC Rouyn NP Noranda NP , , which WDT is VBZ approximately RB 35 CD miles NNS west RB of IN the DT LaRonde NP Mine NP , , via IN Quebec NP provincial JJ highway NN No RB . SENT 117 CD . SENT The DT LaRonde NP Mine NP is VBZ situated VVN approximately RB 1 CD . SENT 2 CD miles NNS north RB of IN highway NN No RB . SENT 117 CD on IN Quebec NP regional JJ highway NN No RB . SENT 395 CD . SENT The DT Company NN has VHZ access NN to TO the DT Canadian JJ National NP Railway NP at IN Cadillac NP , , Quebec NP , , roughly RB four CD miles NNS from IN the DT LaRonde NP Mine NP . SENT Location NN Map NN of IN Agnico NP Eagle NP LaRonde NP Division NP 15 CD The DT LaRonde NP Mine NP is VBZ located VVN in IN the DT Abitibi NP region NN of IN northwestern JJ Quebec NP , , a DT region NN characterized VVN by IN its PP$ availability NN of IN experienced JJ mining NN personnel NNS . SENT The DT elevation NN is VBZ 1 CD , , 106 CD feet NNS above IN sea NN level NN . SENT All DT of IN the DT LaRonde NP Mine's NP power NN requirements NNS are VBP supplied VVN by IN Hydro NP Quebec NP through IN connections NNS to TO its PP$ main JJ power NN transmission NN grid NN . SENT Water NN used VVD in IN the DT LaRonde NP Mine's NP operations NNS is VBZ sourced VVN from IN Lac NP Preissac NP and CC is VBZ transported VVN approximately RB 2 CD . SENT 5 CD miles NNS to TO the DT mine JJ site NN through IN a DT surface NN pipeline NN . SENT The DT climate NN of IN the DT region NN is VBZ continental JJ and CC the DT average JJ annual JJ rainfall NN is VBZ 25 CD inches NNS and CC the DT average JJ annual JJ snowfall NN is VBZ 125 CD inches NNS . SENT The DT average JJ monthly JJ temperatures NNS range VVP from IN a DT minimum NN of IN 23 CD degrees NNS Celsius JJ in IN January NP to TO a DT maximum NN of IN 23 CD degrees NNS Celsius JJ in IN July NP . SENT Under IN normal JJ circumstances NNS , , mining NN operations NNS are VBP conducted VVN year NN round NN without IN interruption NN due JJ to TO weather VV conditions NNS . SENT However RB , , in IN 2002 CD high JJ underground JJ temperatures NNS due JJ to TO extreme JJ summer NN heat NN caused VVD delay NN in IN development NN activity NN in IN lower JJR portions NNS of IN the DT mine NN . SENT The DT LaRonde NP Mine NP operates VVZ under IN mining NN leases NNS obtained VVN from IN the DT Quebec NP Ministry NP of IN Natural NP Resources NPS and CC under IN certificates NNS of IN approval NN granted VVN by IN the DT Quebec NP Ministry NP of IN the DT Environment NP . SENT The DT LaRonde NP property NN consists VVZ of IN 35 CD contiguous JJ mining NN claims NNS and CC two CD provincial JJ mining NN leases NNS and CC covers VVZ in IN total NN approximately RB 2 CD , , 785 CD acres NNS . SENT The DT El NP Coco NP property NN consists VVZ of IN 22 CD contiguous JJ mining NN claims NNS and CC a DT portion NN of IN one CD of IN the DT LaRonde NP provincial JJ mining NN leases NNS and CC covers VVZ in IN total NN approximately RB 888 CD acres NNS . SENT The DT Terrex NP property NN consists VVZ of IN 20 CD mining NN claims NNS that WDT cover VVP in IN total NN approximately RB 1 CD , , 009 CD acres NNS . SENT In IN Quebec NP , , in IN order NN to TO retain VV title NN to TO mining NN claims NNS , , in IN addition NN to TO paying VVG a DT small JJ bi NP annual JJ rental JJ fee NN , , exploration NN work NN or CC an DT equivalent JJ value NN cash NN payment NN has VHZ to TO be VB completed VVN in IN advance NN either CC on IN the DT claim NN or CC on IN adjacent JJ claims NNS and CC filed VVN with IN the DT Quebec NP Ministry NP of IN Natural NP Resources NPS . SENT The DT amount NN of IN exploration NN work NN and CC bi NP annual JJ rental JJ fee NN required VVN bi NP annually RB ranges VVZ from IN 500 CD to TO 2 CD , , 500 CD per IN claim NN the DT rate NN is VBZ fixed VVN by IN Quebec NP Government NP regulations NNS . SENT The DT mining NN leases VVZ on IN the DT LaRonde NP property NN and CC on IN the DT LaRonde NP and CC El NP Coco NP properties NNS expire VVP in IN 2008 CD and CC 2021 CD , , respectively RB , , and CC are VBP automatically RB renewable JJ for IN three CD further JJR ten NN year NN terms NNS on IN payment NN of IN a DT small JJ fee NN . SENT The DT LaRonde NP Mine NP includes VVZ underground JJ operations NNS at IN the DT LaRonde NP and CC El NP Coco NP properties NNS that WDT can MD both CC be VB accessed VVN from IN the DT Penna NP Shaft NN , , a DT mill NN , , treatment NN plant NN , , secondary JJ crusher NN building NN and CC related JJ facilities NNS . SENT The DT El NP Coco NP property NN was VBD acquired VVN from IN Barrick NP Gold NP Corporation NP Barrick NP in IN June NP 1999 CD and CC is VBZ subject JJ to TO a DT 50 CD net JJ profits NNS interest NN in IN future JJ production NN from IN approximately RB 500 CD meters NNS 1 CD , , 640 CD feet NNS east JJ of IN the DT LaRonde NP property NN boundary NN . SENT The DT remaining JJ 1 CD , , 500 CD meters NNS 4 CD , , 921 CD feet NNS is VBZ subject JJ to TO a DT 4 CD net JJ smelter NN return NN royalty NN . SENT This DT area NN of IN the DT property NN is VBZ now RB substantially RB mined VVN out RP and CC therefore RB the DT Company NN did VVD not RB pay VV royalties NNS in IN 2004 CD and CC does VVZ not RB expect VV to TO pay VV royalties NNS in IN 2005 CD . SENT In IN 2003 CD , , exploration NN work NN started VVD to TO extend VV outside IN of IN the DT LaRonde NP property NN on IN to TO the DT Terrex NP property NN where WRB a DT down JJ plunge NN extension NN of IN the DT 20 CD North JJ gold NN zone NN was VBD discovered VVN . SENT The DT Terrex NP property NN is VBZ subject JJ to TO a DT 5 CD net JJ profits NNS royalty NN to TO Delfer NP Gold NP Mines NPS Inc NP . SENT , , a DT 1 CD of IN the DT net JJ smelter NN return NN royalty NN to TO Breakwater VV Resources NP Ltd NP . SENT and CC a DT 2 CD of IN the DT net JJ smelter NN return NN royalty NN to TO Barrick NP . SENT In IN addition NN , , the DT Company NN owns VVZ 100 CD of IN the DT Sphinx NN property NN immediately RB to TO the DT east JJ of IN the DT El NP Coco NP property NN . SENT Mining NP and CC Milling NP Facilities NPS The DT LaRonde NP Mine NP was VBD originally RB developed VVN utilizing VVG a DT 3 CD , , 961 CD foot NN shaft NN Shaft NN 1 CD and CC an DT underground JJ ramp NN access NN system NN . SENT The DT ramp NN access NN system NN is VBZ available JJ down RB to TO the DT 25 CD th NN Level NP of IN Shaft NN 1 CD and CC then RB continues VVZ down RP to TO Level NP 152 CD at IN the DT Penna NP Shaft NN . SENT The DT mineral NN reserve NN accessible JJ from IN Shaft NN 1 CD was VBD depleted VVN in IN September NP 2000 CD . SENT Shaft NN 1 CD is VBZ currently RB being VBG used VVN as IN a DT second JJ escape NN way NN and CC provides VVZ services NNS for IN the DT Penna NP Shaft NN i NP . SENT e SYM . SENT ventilation NN , , compressed VVN air NN , , water NN . SENT A DT second JJ production NN shaft NN Shaft NN 2 CD , , located VVN 4 CD , , 000 CD feet NNS to TO the DT east JJ of IN Shaft NN 1 CD , , was VBD completed VVN in IN 1994 CD down RB to TO a DT depth NN of IN 1 CD , , 722 CD feet NNS and CC was VBD used VVN to TO mine NN Zones NNS 6 CD and CC 7 CD . SENT Both DT ore NN zones NNS were VBD depleted VVN in IN March NP 2000 CD and CC the DT workings NNS were VBD allowed VVN to TO flood VV up RP to TO the DT 6 CD th NN Level NP . SENT A DT third JJ shaft NN the DT Penna NP Shaft NN located VVN approximately RB 1 CD , , 640 CD feet NNS to TO the DT east JJ of IN Shaft NN 1 CD , , was VBD completed VVN down RP to TO a DT depth NN of IN 7 CD , , 380 CD feet NNS in IN March NP 2000 CD . SENT The DT Penna NP Shaft NN is VBZ used VVN to TO mine NN Zones NNS 20 CD North NP , , 20 CD South NP , , 7 CD and CC 6 CD . SENT Four CD mining NN methods NNS have VHP historically RB been VBN used VVN at IN the DT LaRonde NP Mine NP . SENT open JJ pit NN for IN the DT two CD surface NN deposits NNS , , sublevel JJ retreat NN , , longitudinal JJ retreat NN with IN cemented VVN backfill NN , , and CC transverse JJ open JJ stoping NN with IN both DT cemented VVN and CC unconsolidated JJ backfill NN . SENT The DT primary JJ source NN of IN ore NN at IN the DT LaRonde NP Mine NP continues VVZ to TO be VB from IN underground JJ mining NN methods NNS . SENT During IN 2004 CD , , two CD methods NNS were VBD used VVN . SENT longitudinal JJ retreat NN with IN cemented VVN backfill NN and CC transverse JJ open JJ stoping NN with IN both DT cemented VVN and CC unconsolidated JJ backfill NN . SENT In IN the DT underground JJ mine NN , , sublevels NNS are VBP driven VVN at IN 100 CD foot NN and CC 130 CD foot NN intervals NNS , , depending VVG on IN the DT depth NN . SENT Stopes NNS are VBP undercut VVN in IN 45 CD foot NN panels NNS . SENT In IN the DT longitudinal JJ method NN , , panels NNS are VBP mined VVN in IN 45 CD foot NN sections NNS and CC backfilled VVN with IN 100 CD cemented VVN rock NN fill VV or CC paste VV fill VV . SENT In IN the DT transverse JJ open JJ stoping NN method NN , , 50 CD of IN the DT ore NN is VBZ mined VVN in IN the DT first JJ pass NN and CC filled VVN 16 CD with IN cemented VVN rock NN fill VV or CC paste VV fill VV from IN the DT paste NN backfill NN plant NN completed VVD two CD years NNS ago RB located VVN on IN the DT surface NN at IN the DT milling NN facility NN . SENT On IN the DT second JJ pass NN , , the DT remainder NN of IN the DT ore NN is VBZ mined VVN and CC filled VVN with IN unconsolidated JJ waste NN rock NN fill VV or CC paste VV fill VV . SENT Currently RB , , water NN is VBZ treated VVN at IN various JJ facilities NNS at IN the DT LaRonde NP Division NP . SENT Prior RB to TO the DT water NN entering VVG the DT tailings NN pond NN system NN , , cyanide NN is VBZ removed VVN at IN a DT cyanide NN destruction NN facility NN using VVG a DT sulphur NN dioxide NN Inco NP process NN . SENT A DT secondary JJ treatment NN plant NN located VVN between IN the DT 1 CD and CC 2 CD polishing NN ponds NNS uses VVZ a DT peroxysilica NN process NN to TO complete VV the DT cyanide NN destruction NN process NN . SENT In IN addition NN , , water NN with IN higher JJR than IN permissible JJ acidity NN is VBZ treated VVN by IN lime NN in IN the DT mill NN complex NN prior JJ to TO being VBG released VVN to TO the DT environment NN . SENT In IN the DT first JJ quarter NN of IN 2004 CD , , in IN response NN to TO revised VVN Federal JJ mining NN effluent JJ regulations NNS , , the DT Company NN completed VVD and CC commissioned VVD a DT new JJ water NN treatment NN plant NN that WDT will MD reduce VV tailing VVG effluent JJ toxicity NN immediately RB prior RB to TO discharge VV . SENT The DT plant NN uses VVZ a DT biological JJ treatment NN process NN . SENT Prior RB to TO the DT completion NN of IN the DT water NN treatment NN plant NN , , the DT Company NN retained VVD excess JJ water NN in IN its PP$ tailing VVG pond NN complex NN . SENT At IN the DT end NN of IN March NP 2004 CD treated VVN water NN released VVN from IN the DT plant NN successfully RB passed VVD a DT toxicity NN test NN . SENT The DT flow NN rate NN is VBZ steadily RB being VBG increased VVN as IN the DT biomass NN continues VVZ to TO build VV up RP . SENT In IN 2004 CD , , high JJ water NN levels NNS at IN the DT tailings NN pond NN at IN LaRonde NP caused VVD by IN above IN average JJ rainfall NN and CC overcast JJ conditions NNS were VBD mitigated VVN by IN a DT discharge NN of IN slightly RB toxic JJ water NN into IN the DT environment NN that WDT was VBD permitted VVN by IN the DT Quebec NP Minist NP re IN de NP l'Environnement NN . SENT Also RB , , the DT Company NN installed VVD a DT coffer NN dam NN in IN the DT tailings NN pond NN to TO provide VV extra JJ capacity NN . SENT In IN 2004 CD , , the DT Company NN initiated VVD construction NN on IN a DT second JJ phase NN expansion NN of IN the DT water NN treatment NN plant NN and CC to TO further RBR increase VV treatment NN capacity NN . SENT Second JJ phase NN construction NN was VBD completed VVN in IN December NP 2004 CD and CC the DT second JJ phase NN of IN the DT plant NN is VBZ expected VVN to TO be VB fully RB commissioned VVN in IN the DT second JJ quarter NN of IN 2005 CD . SENT Estimated JJ expenditures NNS for IN this DT second JJ phase NN expansion NN are VBP 4 CD . SENT 2 CD million CD . SENT Tailings NNS are VBP stored VVN in IN tailings NN ponds NNS covering VVG an DT area NN of IN approximately RB 293 CD acres NNS and CC waste NN rock NN is VBZ stored VVN in IN two CD waste NN rock NN piles NNS with IN a DT combined JJ volume NN of IN approximately RB 50 CD . SENT 4 CD million CD cubic JJ feet NNS . SENT The DT Company NN holds VVZ mining NN claims NNS to TO the DT northeast NN , , to TO the DT east JJ and CC to TO the DT southeast NN of IN the DT tailings NN ponds NNS that WDT would MD allow VV expansion NN of IN the DT tailings NN ponds NNS and CC the DT establishment NN of IN additional JJ waste NN disposal NN areas NNS . SENT Surface NN facilities NNS at IN the DT LaRonde NP Mine NP include VVP a DT 7 CD , , 000 CD tons NNS of IN ore NN treated VVN per IN day NN milling NN complex NN , , which WDT has VHZ been VBN expanded VVN three CD times NNS from IN the DT original JJ 2 CD , , 000 CD tons NNS of IN ore NN treated VVN per IN day NN rate NN . SENT The DT expansion NN to TO 7 CD , , 000 CD tons NNS per IN day NN was VBD completed VVN in IN October NP 2002 CD . SENT This DT expansion NN consisted VVD of IN additions NNS to TO the DT grinding VVG and CC precious JJ metals NNS circuits NNS and CC modifications NNS to TO the DT copper NN and CC zinc NN flotation NN circuits NNS . SENT An DT ore NN handling NN system NN was VBD completed VVN at IN the DT end NN of IN 1999 CD . SENT It PP included VVD a DT truck NN dump NN linked VVN by IN a DT new JJ conveyor NN gallery NN to TO a DT 5 CD , , 000 CD ton NN coarse JJ ore NN bin NN . SENT The DT coarse JJ ore NN bin NN feeds VVZ a DT semi NN autogenous JJ SAG NN mill NN that WDT was VBD installed VVN at IN the DT end NN of IN 1999 CD . SENT Ore NN from IN the DT Penna NP Shaft NN is VBZ transported VVN to TO the DT ore NN handling VVG facility NN by IN 35 CD ton NN trucks NNS . SENT The DT milling NN complex NN consists VVZ of IN a DT grinding VVG , , gravity NN , , copper NN flotation NN , , zinc NN flotation NN , , and CC a DT precious JJ metals NNS recovery NN circuit NN and CC refinery NN . SENT A DT copper NN concentrate VV containing VVG approximately RB 75 CD of IN the DT gold NN and CC by IN product NN silver NN and CC copper NN is VBZ recovered VVN . SENT The DT zinc NN flotation NN circuit NN produces VVZ a DT zinc NN concentrate VV containing VVG approximately RB 5 CD of IN the DT gold NN . SENT The DT remaining JJ 20 CD is VBZ recovered VVN by IN the DT precious JJ metals NNS circuit NN including VVG a DT new JJ refinery NN using VVG the DT Merrill NP Crowe NP process NN and CC shipped VVN as IN dor NN bars NNS . SENT Both CC the DT zinc NN and CC copper NN flotation NN circuits NNS consist VVP of IN a DT series NN of IN column NN and CC mechanical JJ cells NNS that WDT sequentially RB increase VV the DT zinc NN concentrate NN and CC copper NN concentrate NN quality NN . SENT In IN 2004 CD , , zinc NN recoveries NNS averaged VVD 83 CD . SENT 5 CD and CC zinc NN concentrate NN quality NN averaged VVD over IN 54 CD . SENT 23 CD zinc NN . SENT In IN 2004 CD , , copper NN recoveries NNS averaged VVD 78 CD . SENT 9 CD and CC copper NN concentrate NN quality NN averaged VVD 17 CD . SENT 1 CD for IN the DT year NN . SENT Since IN commercial JJ production NN began VVD in IN 1988 CD , , gold NN recoveries NNS have VHP averaged VVN over IN 92 CD . SENT During IN 2004 CD , , gold NN recoveries NNS averaged VVD approximately RB 91 CD . SENT 5 CD . SENT In IN 2004 CD , , silver NN recoveries NNS averaged VVD 86 CD . SENT 5 CD . SENT During IN 2004 CD , , the DT mill NN processed VVD approximately RB 3 CD . SENT 0 CD million CD tons NNS of IN ore NN , , averaging VVG approximately RB 8 CD , , 137 CD tons NNS of IN ore NN treated VVN per IN day NN and CC operating NN over IN 93 CD . SENT 8 CD of IN available JJ time NN . SENT 17 RB The DT following VVG table NN sets NNS out IN the DT metal NN recoveries NNS , , concentrate VV grades NNS and CC contained VVN metals NNS for IN the DT 2 CD . SENT 977 CD million CD tons NNS of IN ore NN extracted VVN by IN the DT Company NN at IN the DT LaRonde NP Division NP in IN 2004 CD . SENT Copper NN Concentrate NN 84 CD , , 827 CD tons NNS produced VVD Zinc NN Concentrate NN 184 CD , , 397 CD tons NNS produced VVN Head NP Grades NNS Overall JJ Metal NP Recoveries NNS Payable JJ Production NP 000 CD s PP Grade NP Recovery NP Grade NP Recovery NP Dor NN Produced VVN Gold NP 0 CD . SENT 10 CD oz NP t NN 2 CD . SENT 15 CD oz NP t NN 61 CD . SENT 50 CD 0 CD . SENT 30 CD oz NP t NN 8 CD . SENT 99 CD 59 CD , , 000 CD oz NP 91 CD . SENT 49 CD 271 CD . SENT 6 CD oz NP Silver NP 2 CD . SENT 51 CD oz NP t NN 44 CD . SENT 76 CD oz NP t NN 51 CD . SENT 00 CD 15 CD . SENT 00 CD oz NP t NN 15 CD . SENT 00 CD 1 CD , , 070 CD , , 000 CD oz NP 86 CD . SENT 50 CD 5 CD , , 699 CD oz NP Zinc NN 4 CD . SENT 03 CD 7 CD . SENT 53 CD 54 CD . SENT 23 CD 83 CD . SENT 50 CD 83 CD . SENT 50 CD 167 CD , , 282 CD lbs NNS Copper NP 0 CD . SENT 54 CD 14 CD . SENT 85 CD 78 CD . SENT 90 CD 78 CD . SENT 90 CD 22 CD , , 816 CD lbs NNS Development NP In IN 2004 CD , , development NN was VBD focused VVN on IN preparing VVG mining NN blocks NNS well RB in IN advance NN of IN their PP$ planned JJ production NN to TO mitigate VV the DT impact NN of IN any DT unforeseen JJ development NN delays NNS on IN production NN . SENT In IN 2004 CD , , the DT Company NN initiated VVD ramp NN development NN construction NN between IN Level NP 215 CD , , the DT lowest JJS producing VVG level NN of IN the DT LaRonde NP Mine NP , , and CC Level NP 236 CD in IN order NN to TO establish VV a DT new JJ mining NN horizon NN for IN production NN on IN this DT lower JJR level NN . SENT The DT ramp NN development NN to TO Level NP 221 CD is VBZ expected VVN to TO be VB completed VVN in IN the DT second JJ quarter NN of IN 2005 CD and CC the DT Company NN expects VVZ that IN the DT first JJ mining NN blocks NNS on IN Level NP 221 CD should MD be VB ready JJ for IN mining NN by IN the DT third JJ quarter NN of IN 2005 CD . SENT Ramp NN development NN to TO Level NP 236 CD is VBZ expected VVN to TO be VB completed VVN in IN the DT third JJ quarter NN of IN 2006 CD . SENT Also RB construction NN will MD continue VV on IN a DT ramp NN between IN the DT upper JJ and CC lower JJR mining NN horizons NNS of IN the DT Penna NP Shaft NN that WDT will MD provide VV the DT Company NN with IN continuous JJ ramp NN access NN from IN the DT surface NN to TO Level NP 236 CD . SENT The DT Company NN expects VVZ to TO complete VV this DT ramp NN development NN program NN in IN mid JJ 2005 CD . SENT In IN 2004 CD , , development NN crews NNS focused VVN on IN continuing VVG the DT Level NP 215 CD drift NN to TO the DT west NN as IN drilling NN from IN this DT level NN is VBZ pivotal JJ to TO the DT Company's NP ongoing JJ testing NN of IN Zone NP 20 CD North NP at IN depth NN and CC to TO the DT west NN . SENT In IN 2005 CD , , development NN and CC exploration NN activity NN will MD continue VV from IN the DT Level NP 215 CD Exploration NP Drift NN . SENT At IN December NP 31 CD , , 2004 CD , , development NN activity NN had VHD reached VVN 722 CD feet NNS to TO the DT west NN of IN the DT boundary NN between IN the DT LaRonde NP and CC Bousquet NP properties NNS . SENT The DT exploration NN drift NN will MD be VB extended VVN an DT additional JJ 590 CD feet NNS by IN mid JJ 2005 CD . SENT The DT focus NN of IN the DT development NN activity NN will MD be VB to TO define VV the DT western JJ limit NN of IN Zone NP 20 CD North NP at IN depth NN and CC to TO acquire VV additional JJ information NN on IN the DT high JJ grade NN polymetallic JJ zone NN of IN Zone NP 20 CD North NP at IN depth NN and CC to TO the DT west NN . SENT Geology NN and CC Diamond NP Drilling NP Geologically RB , , the DT LaRonde NP Mine NP property NN is VBZ located VVN near IN the DT southern JJ boundary NN of IN the DT Archean JJ age NN 2 CD . SENT 7 CD billion CD years NNS old JJ Abitibi NP Sub NP Province NP and CC the DT Pontiac NP Sub NP Province NP within IN the DT Superior NP Province NP of IN the DT Canadian JJ Shield NP . SENT The DT most RBS important JJ regional JJ structure NN is VBZ the DT Cadillac NP Larder NN Lake NP fault NN zone NN marking VVG the DT contact NN between IN the DT Abitibi NP and CC the DT Pontiac NP sub NN provinces NNS , , located VVN approximately RB 1 CD . SENT 2 CD miles NNS to TO the DT south NN of IN the DT LaRonde NP property NN . SENT The DT geology NN that WDT underlies VVZ the DT LaRonde NP Mine NP consists VVZ of IN three CD east JJ west NN trending VVG , , steeply RB south RB dipping VVG and CC generally RB southward RB facing VVG regional JJ lithological JJ units NNS geological JJ Groups NNS . SENT The DT units NNS are VBP , , from IN north NN to TO south NN . SENT i NP 1 CD , , 200 CD feet NNS of IN the DT Kewagama NP Group NP which WDT is VBZ made VVN up RP of IN thick JJ band NN of IN interbedded JJ wacke NN . SENT ii NNS 5 CD , , 000 CD feet NNS of IN the DT Blake NP River NP Group NP , , a DT volcanic JJ assemblage NN which WDT hosts VVZ all PDT the DT known VVN economic JJ mineralisation NN on IN the DT property NN . SENT and CC iii NP 1 CD , , 800 CD feet NNS of IN the DT Cadillac NP Group NP , , made VVD up RP of IN thick JJ band NN of IN wacke NN interbedded JJ with IN pelitic JJ schist NN and CC minor JJ iron NN formation NN . SENT Zones NNS of IN strong JJ sericite NN and CC chlorite NN alterations NNS , , which WDT enclose VV massive JJ to TO disseminated VVN sulphide NN mineralization NN in IN which WDT gold NN , , silver NN , , copper NN and CC zinc NN are VBP mined VVN at IN the DT LaRonde NP Mine NP follow VVP steeply RB dipping VVG , , east JJ west NN trending VVG , , anastomosing VVG shear NN zone NN structures NNS within IN the DT Blake NP River NP Group NP volcanic JJ units NNS from IN east JJ to TO west NN across IN the DT property NN . SENT These DT shear NN zones NNS comprise VVP a DT larger JJR structure NN , , the DT Doyon NP Dumagami NP Structural NP Zone NP , , which WDT hosts VVZ several JJ important JJ gold NN occurrences NNS including VVG the DT Doyon NN gold NN mine NN and CC the DT former JJ Bousquet NP mines NNS and CC has VHZ been VBN traced VVN for IN over IN 6 CD miles NNS within IN the DT Blake NP River NP Group NP from IN the DT LaRonde NP Division NP property NN westward RB to TO the DT Mouska NP gold NN mine NN . SENT The DT gold JJ bearing NN zones NNS at IN the DT LaRonde NP Division NP are VBP lens NN shaped JJ aggregates NNS of IN disseminated VVN , , stringer NN through IN to TO massive JJ , , aggregates NNS of IN coarse JJ pyrite NN with IN a DT copper NN , , zinc NN and CC silver NN content NN . SENT Ten CD zones NNS that WDT vary VVP in IN size NN from IN 50 CD , , 000 CD to TO 40 CD , , 000 CD , , 000 CD tons NNS have VHP been VBN identified VVN , , of IN which WDT eight CD are NN believed VVN to TO be VB economic JJ . SENT Gold NN content NN is VBZ 18 CD not RB proportional JJ to TO the DT total JJ sulphide NN content NN but CC does VVZ increase NN with IN copper NN content NN . SENT Gold NN values NNS are VBP also RB enhanced VVN where WRB closely RB spaced VVN north RB south RB fractures VVZ cut VV the DT pyrite NN lenses NNS . SENT These DT historical JJ relationships NNS are VBP maintained VVN at IN the DT Penna NP Shaft NN zones NNS . SENT The DT zinc NN silver NN i NP . SENT e SYM . SENT Zone NP 20 CD North NP mineralization NN , , which WDT is VBZ common JJ in IN the DT upper JJ Penna NP Shaft NN area NN and CC contains VVZ lower JJR gold NN values NNS , , grades NNS into IN gold JJ copper NN mineralization NN at IN depth NN . SENT North JJ south JJ fractures NNS have VHP been VBN noted VVN in IN the DT Penna NP Shaft NN underground JJ development NN along IN with IN the DT associated VVN gold NN value NN enhancement NN . SENT The DT copper NN mineral NN that WDT is VBZ present JJ at IN the DT Penna NP Shaft NN is VBZ chalcopyrite NN while IN the DT predominant JJ zinc NN mineral NN is VBZ sphalerite NN . SENT Compared VVN to TO the DT mineral NN reserve NN estimate NN as IN of IN December NP 31 CD , , 2003 CD , , on IN a DT tonnage NN basis NN , , the DT LaRonde NP Division's NP combined VVD proven JJ and CC probable JJ mineral NN reserve NN decreased VVD by IN 2 CD . SENT 1 CD to TO 40 CD . SENT 7 CD million CD tons NNS in IN 2004 CD . SENT The DT 40 CD . SENT 7 CD million CD tons NNS of IN mineral NN reserves NNS includes VVZ the DT replacement NN of IN 3 CD . SENT 0 CD million CD tons NNS that WDT were VBD mined VVN in IN 2004 CD . SENT The DT Company's NP ability NN to TO sustain VV its PP$ level NN of IN proven JJ and CC probable JJ mineral NN reserve NN was VBD primarily RB due JJ to TO continued JJ successful JJ exploration NN results NNS at IN depth NN . SENT In IN 2004 CD , , drilling VVG targeted JJ continued JJ definition NN of IN Zone NP 20 CD North NP , , Zone NP 7 CD and CC Zone NP 20 CD South NP and CC testing VVG the DT extension NN of IN Zone NP 20 CD North NP at IN depth NN and CC to TO the DT west NN the DT LaRonde NP II NP exploration NN program NN . SENT In IN 2004 CD , , one CD focus NN of IN the DT LaRonde NP II NP Project NP exploration NN program NN was VBD testing VVG Zone NP 20 CD North NP at IN depth NN and CC to TO the DT west NN . SENT The DT exploration NN program NN was VBD expanded VVN in IN 2004 CD when WRB the DT property NN boundary NN constraints NNS were VBD removed VVN with IN the DT Company's NP acquisition NN of IN the DT Bousquet NP and CC Terrex NP properties NNS in IN 2003 CD . SENT In IN 2004 CD , , other JJ goals NNS of IN the DT exploration NN program NN were VBD to TO continue VV the DT conversion NN of IN mineral NN resource NN to TO mineral NN reserve NN at IN depth NN in IN the DT Zone NP 20 CD North JJ portion NN of IN LaRonde NP II NP , , to TO confirm VV potential JJ higher JJR grade NN core NN at IN depth NN , , to TO define VV the DT recently RB discovered VVN polymetallic JJ zone NN at IN depth NN to TO the DT west NN and CC to TO test VV for IN the DT extension NN of IN Zone NP 20 CD South NP at IN depth NN and CC to TO the DT west NN . SENT The DT results NNS of IN the DT exploration NN program NN will MD be VB incorporated VVN into IN the DT LaRonde NP II NP feasibility NN study NN that IN the DT Company NN expects VVZ to TO complete VV by IN mid JJ 2005 CD . SENT A DT summary NN of IN the DT diamond NN drilling NN completed VVN on IN the DT LaRonde NP Mine NP property NN is VBZ set VVN out RP below RB . SENT Number NN of IN Holes NNS Drilled VVD Feet NNS Drilled VVD LaRonde NP Target NP for IN Diamond NP Drilling NP 2003 CD 2004 CD 2003 CD 2004 CD Production NN Stope NN Delineation NN 218 CD 180 CD 43 CD , , 285 CD 35 CD , , 880 CD Definition NN 84 CD 54 CD 50 CD , , 479 CD 24 CD , , 852 CD Deep NP Exploration NP LaRonde NP II NP , , Zone NP 20 CD North NP 41 CD 41 CD 69 CD , , 171 CD 98 CD , , 749 CD TOTAL NN 343 CD 275 CD 162 CD , , 935 CD 159 CD , , 481 CD The DT combined JJ cost NN of IN the DT diamond NN drilling NN at IN the DT LaRonde NP Mine NP was VBD approximately RB 2 CD . SENT 2 CD million CD in IN 2004 CD including VVG 0 CD . SENT 6 CD million CD in IN definition NN drilling NN expenses NNS charged VVN to TO operating VVG costs NNS at IN the DT LaRonde NP Mine NP and CC also RB the DT cost NN of IN the DT Level NP 215 CD exploration NN drift NN and CC services NNS . SENT The DT total JJ cost NN of IN exploration NN incurred VVN since IN production NN started VVN at IN the DT LaRonde NP Mine NP in IN 1988 CD is VBZ estimated VVN to TO be VB over IN C NP 58 CD . SENT 4 CD million CD . SENT Expenditures NNS on IN exploration NN and CC studies NNS for IN LaRonde NP II NP Zone NP 20 CD North NP at IN depth NN were VBD 3 CD . SENT 9 CD million CD in IN 2004 CD and CC is VBZ expected VVN to TO be VB 2 CD . SENT 2 CD million CD in IN 2005 CD . SENT Zone NP 20 NP North NP has VHZ developed VVN into IN what WP the DT Company NP believes VVZ is VBZ one CD of IN the DT largest JJS gold NN bearing VVG massive JJ sulphide NN mineralized VVD zones NNS known VVN in IN the DT world NN and CC one NN of IN the DT largest JJS mineralized VVN zones NNS known VVN in IN the DT Abitibi NP region NN of IN Ontario NP and CC Quebec NP . SENT The DT following VVG table NN summarizes VVZ Zone NP 20 CD North's NP contribution NN to TO the DT LaRonde NP Mine's NP mineral NN reserve NN . SENT Proven JJ and CC Probable JJ Mineral NP Reserves NPS Total NP LaRonde NP Property NP 40 CD , , 713 CD , , 000 CD tons NNS Zone NP 20 CD North NP 38 CD , , 202 CD , , 000 CD tons NNS 19 RB The DT following VVG tables NNS summarizes VVZ Zone NP 20 CD North's NP contribution NN to TO the DT LaRonde NP Mine's NP mineral NN resources NNS see VVP Note VV to TO Investors NNS Concerning VVG Estimates NNS of IN Mineral NP Resources NPS . SENT Measured VVN and CC Indicated VVN Mineral NP Resources NPS Total NP LaRonde NP Property NP 3 CD , , 972 CD , , 000 CD tons NNS Zone NP 20 CD North NP 3 CD , , 212 CD , , 000 CD tons NNS Inferred VVN Mineral NP Resource NP Total NP LaRonde NP Property NP 10 CD , , 831 CD , , 000 CD tons NNS Zone NP 20 CD North NP 10 CD , , 060 CD , , 000 CD tons NNS Zone NP 20 CD North NP initially RB occurs VVZ at IN a DT depth NN of IN 2 CD , , 200 CD feet NNS below IN surface NN and CC has VHZ been VBN traced VVN down RP to TO a DT depth NN of IN 10 CD , , 300 CD feet NNS below IN surface NN . SENT With IN increased JJ access NN on IN the DT lower JJR levels NNS of IN the DT mine JJ i NP . SENT e SYM . SENT , , Levels NP 170 CD , , 194 CD , , 215 CD and CC 218 CD , , the DT transformation NN from IN a DT zinc NN silver NN ore NN body NN to TO a DT gold JJ copper NN deposit NN continued VVD during IN 2004 CD . SENT Most JJS of IN the DT definition NN drilling NN was VBD conducted VVN from IN Levels NP 194 CD and CC 215 CD . SENT In IN 2004 CD , , deep JJ exploration NN drilling NN for IN the DT LaRonde NP II NP Project NP was VBD principally RB conducted VVN from IN Level NP 215 CD , , the DT deepest JJS exploration NN drift NN at IN the DT Penna NP Shaft NN . SENT Zone NP 20 NP North NP can MD be VB divided VVN into IN an DT upper JJ zinc NN silver NN enriched VVD zone NN and CC a DT lower JJR gold NN copper NN enriched VVD zone NN . SENT The DT zinc NN zone NN has VHZ been VBN traced VVN over IN a DT vertical JJ distance NN of IN 5 CD , , 600 CD feet NNS and CC a DT horizontal JJ distance NN of IN 1 CD , , 900 CD feet NNS , , with IN thicknesses NNS approaching VVG 125 CD feet NNS . SENT The DT gold NN zone NN has VHZ been VBN traced VVN over IN a DT vertical JJ distance NN of IN over IN 7 CD , , 200 CD feet NNS and CC a DT horizontal JJ distance NN of IN 2 CD , , 000 CD feet NNS , , with IN thicknesses NNS varying VVG from IN 35 CD feet NNS to TO 100 CD feet NNS . SENT The DT zinc NN zone NN consists VVZ of IN massive JJ zinc NN silver NN mineralization NN containing VVG 50 CD to TO 90 CD massive JJ pyrite NN and CC 10 CD to TO 50 CD massive JJ light JJ brown JJ sphalerite NN . SENT The DT gold JJ zone NN mineralization NN consists VVZ of IN 30 CD to TO 70 CD finely RB disseminated VVN to TO massive JJ pyrite NN containing VVG 1 CD to TO 10 CD chalcopyrite NN veinlets NNS , , minor JJ disseminated VVN sphalerite NN and CC rare JJ specks NNS of IN visible JJ gold NN . SENT Gold NN grades NNS are VBP generally RB related VVN to TO the DT chalcopyrite NN or CC copper NN content NN . SENT This DT is VBZ the DT same JJ historical JJ relationship NN noted VVD at IN Shaft NN 1 CD s PP Main NP Zone NP . SENT At IN depth NN , , the DT massive JJ sulphide NN lens NN becomes VVZ richer JJR in IN gold NN and CC copper NN . SENT During IN 2004 CD , , 2 CD . SENT 9 CD million CD tons NNS of IN ore NN grading VVG 0 CD . SENT 10 CD ounces NNS of IN gold NN per IN ton NN , , 2 CD . SENT 6 CD ounces NNS of IN silver NN per IN ton NN , , 0 CD . SENT 55 CD copper NN and CC 4 CD . SENT 3 CD zinc NN were VBD mined VVN from IN Zone NP 20 CD North NP . SENT While IN drilling NN results NNS in IN 2004 CD continued VVD to TO delineate VV and CC increase VV the DT size NN of IN the DT gold JJ ore NN body NN at IN depth NN , , one CD of IN the DT most RBS significant JJ results NNS of IN the DT year NN was VBD obtained VVN from IN drill NN hole NN 3215 CD 68 CD A DT . SENT The DT drill NN hole NN intersected VVD the DT following VVG values NNS . SENT Interval NN ft NP Drill NN Hole NP True NP Thickness NN ft NP Gold NP oz NP ton NN Cut NP 1 CD . SENT 5 CD oz NP Silver NP oz NP ton NN Copper NN Zinc NN From IN . SENT To TO . SENT 3215 CD 68 CD A NP 45 CD . SENT 9 CD 4 CD , , 160 CD . SENT 0 CD 4 CD , , 245 CD . SENT 0 CD 0 CD . SENT 19 CD 2 CD . SENT 21 CD 0 CD . SENT 61 CD 1 CD . SENT 87 CD The DT result NN is VBZ significant JJ because IN it PP indicates VVZ a DT reoccurrence NN of IN massive JJ sulphide NN bands NNS with IN up RB to TO 15 CD chalcopyrite NN mineralization NN and CC significant JJ zinc NN values NNS in IN an DT area NN deep RB and CC to TO the DT west NN of IN the DT Penna NP Shaft NN , , on IN the DT recently RB acquired VVN Terrex NP property NN . SENT Additional JJ drill NN intercepts NNS completed VVN in IN this DT sector NN in IN 2004 CD , , including VVG drill NN holes NNS 3215 CD 85 CD A DT and CC 3215 CD 95 CD , , which WDT confirmed VVD the DT presence NN of IN this DT new JJ polymetallic JJ massive JJ sulphide NN zone NN . SENT The DT results NNS are VBP summarized VVD below RB . SENT Drill VV Hole NP True NP Thickness NN ft NP From IN To TO Gold NP oz NP ton NN Cut NP 1 CD . SENT 5 CD oz NP Silver NP oz NP ton NN Copper NN Zinc NN 3215 CD 85 CD D NP 12 CD . SENT 1 CD 3 CD , , 784 CD . SENT 1 CD 3 CD , , 800 CD . SENT 2 CD 0 CD . SENT 26 CD 1 CD . SENT 95 CD 0 CD . SENT 37 CD 9 CD . SENT 66 CD Uncut JJ 12 CD . SENT 1 CD 3 CD , , 784 CD . SENT 1 CD 3 CD , , 800 CD . SENT 2 CD 0 CD . SENT 59 CD 1 CD . SENT 95 CD 0 CD . SENT 37 CD 9 CD . SENT 66 CD 3215 JJ 95 CD 40 CD . SENT 7 CD 3 CD , , 103 CD . SENT 6 CD 3 CD , , 152 CD . SENT 2 CD 0 CD . SENT 22 CD 1 CD . SENT 60 CD 0 CD . SENT 52 CD 6 CD . SENT 26 CD Uncut JJ 40 CD . SENT 7 CD 3 CD , , 103 CD . SENT 6 CD 3 CD , , 152 CD . SENT 2 CD 0 CD . SENT 26 CD 1 CD . SENT 60 CD 0 CD . SENT 52 CD 6 CD . SENT 26 RB The DT most RBS significant JJ result NN was VBD obtained VVN in IN drill NN hole NN 3215 CD 95 CD , , which WDT is VBZ the DT third JJ hole NN to TO confirm VV the DT existence NN of IN a DT higher JJR grade NN polymetallic JJ zone NN at IN depth NN . SENT The DT intercept NN , , located VVN at IN a DT depth NN of IN 9 CD , , 339 CD feet NNS and CC approximately RB 3 CD , , 700 CD feet NNS to TO the DT west NN of IN the DT Penna NP Shaft NN , , straddles VVZ the DT boundary NN of IN the DT LaRonde NP and CC Terrex NP properties NNS . SENT The DT intersection NN consisted VVD of IN 30 CD to TO 90 CD massive JJ pyrite NN with IN occurrences NNS of IN sphalerite NN and CC 20 CD chalcopyrite NN hosted VVD by IN a DT siliceous JJ matrix NN . SENT Visible JJ gold NN was VBD noted VVN in IN a DT quartz NN vein NN . SENT The DT vein NN graded VVD 2 CD . SENT 55 CD ounces NNS of IN gold NN uncut JJ over IN an DT interval NN of IN 2 CD . SENT 1 CD feet NNS . SENT With IN the DT most RBS recent JJ results NNS , , the DT polymetallic JJ zone NN has VHZ been VBN traced VVN over IN a DT length NN of IN approximately RB 1 CD , , 500 CD feet NNS and CC a DT vertical JJ height NN of IN 500 CD feet NNS . SENT Another DT significant JJ result NN was VBD obtained VVN in IN drill NN hole NN 3215 CD 85 CD A DT , , located VVN approximately RB 1 CD , , 000 CD feet NNS west JJ of IN 3215 CD 68 CD A DT , , which WDT intersected VVD strong JJ alteration NN but CC no DT significant JJ gold NN values NNS . SENT this DT result NN appears VVZ to TO indicate VV that DT drilling NN has VHZ reached VVN the DT western JJ limit NN of IN Zone NP 20 CD North NP at IN a DT depth NN of IN approximately RB 10 CD , , 000 CD feet NNS . SENT These DT results NNS will MD be VB used VVN in IN the DT preparation NN of IN the DT Company's NP deep JJ mining NN feasibility NN study NN that WDT is VBZ expected VVN to TO be VB completed VVN in IN mid JJ 2005 CD . SENT Agnico NP Eagle NP currently RB controls VVZ almost RB 20 CD miles NNS along IN this DT belt NN both CC east JJ and CC west JJ of IN the DT LaRonde NP Mine NP , , much RB of IN which WDT remains VVZ unexplored JJ . SENT Access NN to TO a DT portion NN of IN this DT property NN holding NN provided VVN by IN the DT LaRonde NP Mine's NP underground JJ infrastructure NN will MD facilitate VV further JJR exploration NN . SENT Historically RB , , increased JJ drill NN hole NN density NN has VHZ improved VVN initial JJ mineral NN reserve NN and CC mineral NN resource NN estimates NNS based VVN on IN widely RB spaced VVN drill NN holes NNS usually RB drilled VVN from IN the DT shaft NN stations NNS . SENT Ultimately RB development NN within IN the DT ore NN zones NNS has VHZ confirmed VVN or CC upgraded VVN the DT original JJ estimates NNS . SENT Zone NP 20 NP South NP is VBZ located VVN approximately RB 400 CD feet NNS south RB of IN Zone NP 20 CD North NP . SENT It PP consists VVZ of IN at IN least JJS two CD known JJ disseminated VVN to TO massive JJ sulphide NN gold NN copper NN zinc NN bearing NN lenses NNS made VVD up RP of IN 80 CD to TO 90 CD pyrite NN , , 5 CD to TO 10 CD sphalerite NN and CC 1 CD to TO 3 CD chalcopyrite NN . SENT The DT Zone NP 20 CD South NP horizon NN has VHZ been VBN traced VVN over IN a DT vertical JJ distance NN of IN 5 CD , , 300 CD feet NNS and CC a DT horizontal JJ distance NN of IN 400 CD feet NNS , , with IN a DT mineralized VVN thickness NN varying VVG from IN 10 CD feet NNS to TO 40 CD feet NNS . SENT The DT El NP Coco NP property NN contains VVZ the DT eastern JJ extension NN of IN Zone NP 20 CD South NP . SENT The DT current JJ mineral NN reserve NN position NN on IN Zone NP 20 CD South NP on IN the DT LaRonde NP property NN is VBZ 178 CD , , 000 CD ounces NNS and CC on IN the DT El NP Coco NP property NN is VBZ negligible JJ 180 CD ounces NNS . SENT In IN 2004 CD , , approximately RB 38 CD , , 000 CD tons NNS grading VVG 0 CD . SENT 12 CD ounces NNS of IN gold NN per IN ton NN were VBD mined VVN from IN Zone NP 20 CD South NP on IN the DT LaRonde NP property NN and CC over IN 23 CD , , 000 CD tons NNS grading VVG 0 CD . SENT 20 CD ounces NNS of IN gold NN per IN ton NN were VBD mined VVN from IN Zone NP 20 CD South NP on IN the DT El NP Coco NP property NN . SENT Most JJS of IN the DT current JJ reserves NNS for IN Zone NP 20 CD South NP almost RB 164 CD , , 000 CD ounces NNS of IN gold NN are VBP located VVN in IN the DT lower JJR mine NN area NN . SENT Mineralization NN of IN Zone NP 20 CD South NP in IN this DT lower JJR area NN of IN the DT Penna NP Shaft NN appears VVZ to TO be VB very RB similar JJ to TO what WP was VBD initially RB encountered VVN in IN Zone NP 20 CD South NP near IN Level NP 146 CD where WRB the DT mineralization NN is VBZ narrow JJ , , high JJ grade NN but CC more RBR difficult JJ to TO define VV . SENT Additional JJ high JJ grade NN gold NN mineralization NN at IN depth NN could MD have VH a DT significant JJ impact NN on IN the DT long JJ term NN mine NN plan NN . SENT High JJ grade NN mineralization NN just RB above IN Level NP 215 CD has VHZ not RB yet RB been VBN factored VVN into IN the DT long JJ term NN mine NN plan NN . SENT The DT significance NN of IN Zone NP 20 CD South NP production NN can MD be VB summarized VVD as RB follows VVZ . SENT Zone NP 20 NP South NP is VBZ characterized VVN by IN higher JJR grade NN mineralization NN frequently RB accompanied VVN by IN coarse JJ visible JJ gold NN . SENT Reserves NNS on IN the DT El NP Coco NP property NN were VBD substantially RB depleted VVN as RB at IN December NP 31 CD , , 2003 CD and CC production NN since IN then RB has VHZ come VVN from IN royalty NN free JJ areas NNS of IN Zone NP 20 CD South NP lens NN production NN . SENT Unlike IN the DT typical JJ LaRonde NP massive JJ sulphide NN model NN , , higher JJR gold NN grades NNS are VBP frequently RB accompanied VVN by IN higher JJR grade NN silver NN zinc NN mineralization NN . SENT In IN the DT LaRonde NP geological JJ model NN , , higher JJR grade NN gold NN mineralization NN is VBZ normally RB accompanied VVN by IN corresponding JJ higher JJR copper NN values NNS . SENT Mineralization NN is VBZ continuous JJ down RB to TO Level NP 154 CD 5 CD , , 050 CD feet NNS below IN surface NN . SENT Economic JJ mineralization NN reoccurs NNS at IN the DT Level NP 170 CD horizon NN 5 CD , , 600 CD feet NNS below IN surface NN and CC is VBZ open JJ at IN depth NN . SENT Mineralization NN has VHZ been VBN traced VVN to TO a DT depth NN of IN 7 CD , , 800 CD feet NNS . SENT Zone NP 20 NP South NP will MD require VV significantly RB more JJR delineation NN drilling NN . SENT Zone NP 20 NP South NP will MD be VB drilled VVN from IN the DT Level NP 215 CD exploration NN drift NN , , resulting VVG in IN shorter JJR drill NN holes NNS and CC significantly RB tighter JJR drill NN spacing NN . SENT In IN 2004 CD , , 23 CD drill NN holes NNS were VBD completed VVN in IN Zone NP 20 CD South NP below IN Level NP 215 CD . SENT The DT results NNS were VBD highly RB erratic JJ and CC generally RB poor JJ . SENT While IN additional JJ drilling NN will MD be VB conducted VVN in IN 2005 CD , , the DT current JJ results NNS do VVP not RB justify VV an DT economic JJ evaluation NN . SENT The DT 2004 CD drilling NN program NN continued VVD testing VVG Zone NP 20 CD North NP at IN depth NN and CC to TO the DT west NN and CC will MD continue VV upper JJ and CC lower RBR mine JJ delineation NN drilling NN . SENT In IN addition NN to TO drilling NN conducted VVN from IN the DT LaRonde NP Mine NP 21 CD infrastructure NN , , drilling NN was VBD also RB conducted VVN in IN 2004 CD using VVG the DT underground JJ infrastructure NN available JJ from IN the DT Company's NP recently RB acquired VVD Bousquet NP property NN . SENT For IN 2004 CD , , three CD main JJ areas NNS of IN drilling NN were VBD conducted VVN including VVG testing VVG potential JJ extensions NNS of IN mineralization NN at IN depth NN on IN the DT Ellison NP property NN from IN the DT 9 CD th NN Level NP and CC drilling NN from IN bottom NN of IN the DT Bousquet NP Shaft NN to TO probe VV the DT results NNS at IN depth NN encountered VVN in IN Drill NN Hole NP 3215 CD 68 CD A DT , , intersected VVN from IN LaRonde's NP Level NP 215 CD exploration NN drift NN . SENT Capital NP Projects NPS and CC Expansion NN In IN 2004 CD , , the DT Company NN commissioned VVD a DT water NN treatment NN plant NN that WDT reduces VVZ tailing VVG effluent JJ toxicity NN immediately RB prior RB to TO discharge VV . SENT The DT Company NN has VHZ initiated VVN construction NN on IN a DT second JJ phase NN expansion NN of IN the DT water NN treatment NN plant NN to TO further JJR increase NN treatment NN capacity NN , , which WDT was VBD completed VVN in IN December NP 2004 CD and CC is VBZ expected VVN to TO be VB fully RB commissioned VVN in IN the DT second JJ quarter NN of IN 2005 CD . SENT In IN 2004 CD , , the DT Company NN initiated VVD ramp NN development NN between IN Level NP 215 CD and CC Level NP 236 CD . SENT The DT Company NN expects VVZ to TO complete VV this DT development NN and CC ramp NN construction NN between IN the DT upper JJ and CC lower JJR mining NN horizons NNS at IN the DT Penna NP Shaft NN in IN 2005 CD . SENT The DT regional JJ development NN team NN will MD continue VV to TO evaluate VV the DT development NN project NN at IN LaRonde NP II NP , , the DT Company's NP mineral NN resource NN base NN located VVN outside IN of IN the DT Penna NP Shaft NN infrastructure NN . SENT In IN 2004 CD , , the DT Company NN continued VVD the DT deep JJ drilling NN program NN from IN the DT Level NP 215 CD drift NN and CC the DT bottom NN of IN the DT Bousquet NP Shaft NN to TO incorporate VV those DT results NNS into IN a DT feasibility NN study NN which WDT is VBZ expected VVN to TO be VB completed VVN in IN mid JJ 2005 CD . SENT In IN connection NN with IN the DT preparation NN of IN this DT feasibility NN study NN , , the DT development NN team NN is VBZ also RB refining VVG studies NNS of IN the DT technical JJ issues NNS associated VVN with IN deep JJ mining NN . SENT The DT Company NN made VVD capital NN expenditures NNS of IN 53 CD million CD in IN 2004 CD , , 22 CD million CD more JJR than IN originally RB budgeted VVN , , with IN the DT increase NN primarily RB due JJ to TO the DT commencement NN of IN underground JJ programs NNS at IN Lapa NP and CC Goldex NP projects NNS see VVP Lapa NP Project NP and CC Goldex NP Project NP . SENT Budgeted VVN 2005 CD exploration NN and CC capital NN expenditures NNS of IN 42 CD million CD consist VVP of IN 14 CD . SENT 1 CD million CD of IN sustaining VVG capital NN expenditures NNS at IN the DT LaRonde NP Mine NP , , 12 CD . SENT 7 CD million CD on IN projects NNS relating VVG to TO LaRonde NP II NP , , 12 CD . SENT 1 CD million CD on IN the DT Lapa NP property NN , , 1 CD . SENT 5 CD million CD on IN the DT bulk JJ sample NN and CC engineering NN projects NNS at IN the DT Goldex NP property NN and CC 1 CD . SENT 6 CD million CD on IN drilling NN at IN the DT Bousquet NP and CC Ellison NP properties NNS . SENT During IN 2005 CD , , the DT Company NN plans VVZ exploration NN expenditures NNS on IN grassroots NNS exploration NN projects NNS of IN approximately RB 4 CD . SENT 8 CD million CD . SENT Mineral NP Reserve NP and CC Mineral NP Resource NP The DT information NN set VVD forth RB below IN with IN respect NN to TO the DT mineral NN reserves NNS at IN the DT LaRonde NP Division NP , , Bousquet NP , , Ellison NP , , Goldex NP and CC Lapa NP properties NNS has VHZ been VBN prepared VVN by IN the DT following VVG qualified JJ people NNS in IN accordance NN with IN the DT Canadian JJ Securities NPS Administrators NPS National NP Instrument NP 43 CD 101 CD Standards NPS of IN Disclosure NN for IN Mineral NP Projects NPS National NP Instrument NP 43 CD 101 CD . SENT Property NN Qualified VVD person NN responsible JJ for IN mineral NN reserve NN estimates VVZ LaRonde NP Division NP Guy NP Gosselin NP , , P NN . SENT Eng NN . SENT , , P NN . SENT Geo NP . SENT , , Chief JJ Geologist NN , , LaRonde NP Division NP Bousquet NP and CC Ellison NP Normand NP Bedard NP , , P NN . SENT Geo NP . SENT , , Senior JJ Geologist NN , , Regional NP Development NP Division NP Goldex NP Marc NP Legault NP , , P NN . SENT Eng NN . SENT , , Manager NP , , Project NP Evaluations NNS Lapa NP Christian NP D'Amours NP , , P NN . SENT Geo NP . SENT , , Consulting NP Geologist NN The DT qualified JJ person NN responsible JJ for IN the DT LaRonde NP II NP prefeasibility NN study NN is VBZ Carol NP Plummer NP , , P NN . SENT Eng NN . SENT , , Project NP Manager NP for IN LaRonde NP II NP . SENT The DT qualified JJ person NN responsible JJ for IN the DT Lapa NP and CC Goldex NP preliminary JJ feasibility NN studies NNS is VBZ Rosaire NP Emond NP , , P NN . SENT Eng NN . SENT , , Senior NP Mining NP Engineer NN , , Regional NP Development NP Division NP . SENT The DT Company's NP Manager NP , , Project NP Evaluations NNS , , Marc NP H NP . SENT Legault NP , , P NN . SENT Eng NP , , a DT qualified JJ person NN under IN National NP Instrument NP 43 CD 101 CD , , has VHZ supervised VVN the DT preparation NN of IN and CC verified VVN the DT information NN that WDT forms VVZ the DT basis NN for IN the DT scientific JJ and CC technical JJ information NN in IN this DT Form NP 20 CD F NN . SENT The DT criteria NNS set VVN forth RB in IN National NP Instrument NP 43 CD 101 CD are VBP similar JJ to TO the DT reserve NN definitions NNS and CC guidelines NNS for IN classification NN of IN mineral NN resource NN used VVN by IN the DT United NP States NPS Securities NPS and CC Exchange NP Commission's NP Industry NP 22 CD Guide NP No NP . SENT 7 CD . SENT However RB , , the DT definitions NNS in IN National NP Instrument NP 43 CD 101 CD differ VVP in IN certain JJ respects NNS from IN the DT definitions NNS set VVN forth RB in IN the DT United NP States NPS Securities NPS and CC Exchange NP Commission's NP Industry NP Guide NP No NP . SENT 7 CD concerning VVG mining NN operations NNS . SENT The DT Company's NP mineral NN reserve NN estimate NN was VBD derived VVN from IN internally RB generated VVN data NNS or CC audited JJ reports NNS . SENT Cautionary JJ Note NN to TO Investors NNS concerning VVG estimates NNS of IN Measured VVN and CC Indicated VVN Resources NP This DT section NN uses VVZ the DT terms NNS measured VVD resources NNS and CC indicated JJ resources NNS . SENT We PP advise VVP investors NNS that IN while IN those DT terms NNS are VBP recognized VVN and CC required VVN by IN Canadian JJ regulations NNS , , the DT U NP . SENT S NP . SENT Securities NPS and CC Exchange NP Commission NP does VVZ not RB recognize VV them PP . SENT Investors NNS are VBP cautioned VVD not RB to TO assume VV that IN any DT part NN or CC all RB of IN mineral NN deposits NNS in IN these DT categories NNS will MD ever RB be VB converted VVN into IN reserves NNS . SENT Cautionary JJ Note NN to TO Investors NNS concerning VVG estimates NNS of IN Inferred VVN Resources NP This DT section NN uses VVZ the DT term NN inferred VVN resources NNS . SENT We PP advise VVP investors NNS that IN while IN this DT term NN is VBZ recognized VVN and CC required VVN by IN Canadian JJ regulations NNS , , the DT U NP . SENT S NP . SENT Securities NPS and CC Exchange NP Commission NP does VVZ not RB recognize VV it PP . SENT Inferred VVN resources NNS have VHP a DT great JJ amount NN of IN uncertainty NN as RB to TO their PP$ existence NN , , and CC great JJ uncertainty NN as RB to TO their PP$ economic JJ and CC legal JJ feasibility NN . SENT It PP cannot NN be VB assumed VVN that IN all DT or CC any DT part NN of IN an DT Inferred VVN Mineral NP Resource NP will MD ever RB be VB upgraded VVN to TO a DT higher JJR category NN . SENT Under IN Canadian JJ rules NNS , , estimates NNS of IN Inferred VVN Mineral NP Resources NPS may MD not RB form VV the DT basis NN of IN feasibility NN or CC pre NP feasibility NN studies NNS , , except IN in IN rare JJ cases NNS . SENT Investors NNS are VBP cautioned VVD not RB to TO assume VV that DT part NN or CC all DT of IN an DT inferred VVN resource NN exists VVZ , , or CC is VBZ economically RB or CC legally RB mineable JJ . SENT A DT Mineral NP Reserve NP is VBZ the DT economically RB mineable JJ part NN of IN a DT measured VVN or CC indicated VVN resource NN demonstrated VVN by IN at IN least JJS a DT preliminary JJ feasibility NN study NN . SENT This DT study NN must MD include VV adequate JJ information NN on IN mining NN , , processing NN , , metallurgical JJ , , economic JJ and CC other JJ relevant JJ factors NNS that WDT demonstrate VVP , , at IN the DT time NN of IN reporting NN , , that DT economic JJ extraction NN can MD be VB justified VVN . SENT A DT mineral NN reserve NN includes VVZ diluting VVG materials NNS and CC allows VVZ for IN losses NNS that WDT may MD occur VV when WRB the DT material NN is VBZ mined VVN . SENT A DT Proven JJ Mineral NP Reserve NP is VBZ the DT economically RB mineable JJ part NN of IN a DT measured VVN resource NN for IN which WDT quantity NN , , grade NN or CC quality NN , , densities NNS , , shape NN and CC physical JJ characteristics NNS are VBP so RB well RB established VVN that IN they PP can MD be VB estimated VVN with IN confidence NN sufficient JJ to TO allow VV the DT appropriate JJ application NN of IN technical JJ and CC economic JJ parameters NNS , , to TO support VV production NN planning NN and CC evaluation NN of IN the DT economic JJ viability NN of IN the DT deposit NN . SENT A DT Probable JJ Mineral NP Reserve NP is VBZ the DT economically RB mineable JJ part NN of IN an DT indicated JJ mineral NN resource NN for IN which WDT quantity NN , , grade NN or CC quality NN , , densities NNS , , shape NN and CC physical JJ characteristics NNS can MD be VB estimated VVN with IN a DT level NN of IN confidence NN sufficient JJ to TO allow VV the DT appropriate JJ application NN of IN technical JJ and CC economic JJ parameters NNS , , to TO support VV mine NN planning NN and CC evaluation NN of IN the DT economic JJ viability NN of IN the DT deposit NN . SENT A DT Mineral NP Resource NP is VBZ a DT concentration NN or CC occurrence NN of IN natural JJ , , solid JJ , , inorganic JJ or CC fossilized VVN organic JJ material NN in IN or CC on IN the DT earth's JJ crust NN in IN such JJ form NN and CC quantity NN and CC of IN such PDT a DT grade NN or CC quality NN that IN it PP has VHZ reasonable JJ prospects NNS for IN economic JJ extraction NN . SENT The DT location NN , , quantity NN , , grade NN , , geological JJ characteristics NNS and CC continuity NN of IN a DT mineral NN resource NN are VBP known VVN , , estimated VVN or CC interpreted VVN from IN specific JJ geological JJ evidence NN and CC knowledge NN . SENT A DT Measured VVN Mineral NP Resource NP is VBZ that DT part NN of IN a DT mineral NN resource NN for IN which WDT quantity NN , , grade NN or CC quality NN , , densities NNS , , shape NN and CC physical JJ characteristics NNS can MD be VB estimated VVN with IN a DT level NN of IN confidence NN sufficient JJ to TO allow VV the DT appropriate JJ application NN of IN technical JJ and CC economic JJ parameters NNS , , to TO support VV mine NN planning NN and CC evaluation NN of IN the DT economic JJ viability NN of IN the DT deposit NN . SENT The DT estimate NN is VBZ based VVN on IN detailed JJ and CC reliable JJ exploration NN , , sampling VVG and CC testing VVG information NN gathered VVN through IN appropriate JJ techniques NNS from IN locations NNS such JJ as IN outcrops NNS , , trenches NNS , , pits NNS , , workings NNS and CC drill VV holes NNS that WDT are VBP spaced VVN closely RB enough RB to TO confirm VV both DT geological JJ and CC grade NN continuity NN . SENT An DT Indicated JJ Mineral NP Resource NP is VBZ that DT part NN of IN a DT mineral NN resource NN for IN which WDT quantity NN , , grade NN or CC quality NN , , densities NNS , , shape NN and CC physical JJ characteristics NNS can MD be VB estimated VVN with IN a DT level NN of IN confidence NN sufficient JJ to TO allow VV the DT appropriate JJ application NN of IN technical JJ and CC economic JJ parameters NNS , , to TO support VV mine NN planning NN and CC evaluation NN of IN the DT economic JJ viability NN of IN the DT deposit NN . SENT The DT estimate NN is VBZ based VVN on IN detailed JJ and CC reliable JJ exploration NN and CC testing NN information NN gathered VVN through IN appropriate JJ techniques NNS from IN locations NNS such JJ as IN outcrops NNS , , trenches NNS , , pits NNS , , workings NNS and CC drill VV holes NNS that WDT are VBP spaced VVN closely RB enough RB for IN geological JJ and CC grade NN continuity NN to TO be VB reasonably RB assumed VVN . SENT Mineral NN resources NNS that WDT are VBP not RB mineral NN reserves NNS do VVP not RB have VH demonstrated VVN economic JJ viability NN . SENT 23 CD A NP Preliminary JJ Feasibility NN Study NN means VVZ a DT comprehensive JJ study NN of IN the DT viability NN of IN a DT mineral NN project NN that WDT has VHZ advanced VVN to TO a DT stage NN where WRB the DT mining NN method NN , , in IN the DT case NN of IN underground JJ mining NN , , or CC the DT pit NN configuration NN , , in IN the DT case NN of IN an DT open JJ pit NN , , has VHZ been VBN established VVN , , and CC which WDT , , if IN an DT effective JJ method NN of IN mineral NN processing NN has VHZ been VBN determined VVN , , includes VVZ a DT financial JJ analysis NN based VVN on IN reasonable JJ assumptions NNS of IN technical JJ , , engineering NN , , operating NN , , economic JJ factors NNS and CC the DT evaluation NN of IN other JJ relevant JJ factors NNS which WDT are VBP sufficient JJ for IN a DT qualified JJ person NN , , acting VVG reasonably RB , , to TO determine VV if IN all DT or CC part NN of IN the DT Mineral NP Resource NP may MD be VB classified VVN as IN a DT Mineral NP Reserve NP . SENT National NP Instrument NP 43 NP 101 CD requires VVZ mining NN companies NNS to TO disclose VV reserves NNS and CC resources NNS using VVG the DT subcategories NNS of IN proven JJ reserves NNS , , probable JJ reserves NNS , , measured VVN resources NNS , , indicated JJ resources NNS and CC inferred VVN resources NNS . SENT Mineral NN resources NNS that WDT are VBP not RB mineral NN reserves NNS do VVP not RB have VH demonstrated VVN economic JJ viability NN . SENT Cut VVN off IN Grade NP means VVZ a DT in IN respect NN of IN mineral NN resources NNS , , the DT lowest JJS grade NN below IN which WDT the DT mineralized VVN rock NN currently RB cannot NN reasonably RB be VB expected VVN to TO be VB economically RB extracted VVN , , and CC b LS in IN respect NN of IN mineral NN reserves NNS , , the DT lowest JJS grade NN below IN which WDT the DT mineralized VVN rock NN currently RB cannot NN be VB economically RB extracted VVN as IN demonstrated VVN by IN either CC a DT preliminary JJ feasibility NN study NN or CC a DT feasibility NN study NN . SENT Cut VVN off IN grades NNS vary VVP between IN deposits NNS depending VVG upon IN the DT amenability NN of IN ore NN to TO gold JJ extraction NN and CC upon IN costs NNS of IN production NN and CC metal NN prices NNS . SENT at IN December NP 31 CD , , LaRonde NP Division NP 2004 CD 2003 CD 2002 CD Gold NN Proven VVN 1 CD tons NNS 3 CD , , 600 CD , , 000 CD 4 CD , , 100 CD , , 000 CD 3 CD , , 800 CD , , 000 CD Average JJ grade NN gold NN ounces NNS per IN ton NN 0 CD . SENT 14 CD 0 CD . SENT 14 CD 0 CD . SENT 13 CD Probable JJ 1 CD tons NNS 27 CD , , 400 CD , , 000 CD 25 CD , , 900 CD , , 000 CD 22 CD , , 700 CD , , 000 CD Average JJ grade NN gold NN ounces NNS per IN ton NN 0 CD . SENT 16 CD 0 CD . SENT 16 CD 0 CD . SENT 13 CD Zinc NN Proven JJ tons NNS 2 CD , , 900 CD , , 000 CD 2 CD , , 800 CD , , 000 CD 4 CD , , 200 CD , , 000 CD Average JJ grade NN gold NN ounces NNS per IN ton NN 0 CD . SENT 03 CD 0 CD . SENT 03 CD 0 CD . SENT 03 CD Probable JJ tons NNS 6 CD , , 800 CD , , 000 CD 8 CD , , 900 CD , , 000 CD 11 CD , , 000 CD , , 000 CD Average JJ grade NN gold NN ounces NNS per IN ton NN 0 CD . SENT 03 CD 0 CD . SENT 03 CD 0 CD . SENT 03 CD Total JJ mineral NN reserve NN tons NNS 40 CD , , 700 CD , , 000 CD 41 CD , , 600 CD , , 000 CD 41 CD , , 700 CD , , 000 CD Total JJ contained JJ gold NN ounces NNS 2 CD 5 CD , , 104 CD , , 000 CD 5 CD , , 020 CD , , 000 CD 4 CD , , 022 CD , , 000 CD Tonnage NN information NN is VBZ rounded VVN to TO the DT nearest JJS 100 CD , , 000 CD tons NNS . SENT Notes NNS . SENT 1 LS The DT proven JJ and CC probable JJ mineral NN reserves NNS set VVD forth RB in IN the DT table NN above IN are VBP based VVN on IN net JJ smelter NN return NN cut VVD off RP value NN of IN the DT ore NN that WDT varies VVZ between IN C NP 35 CD . SENT 38 CD per IN ton NN and CC C $ 54 CD . SENT 43 CD per IN ton NN depending VVG on IN the DT deposit NN . SENT For IN instance NN , , the DT C NP 35 CD . SENT 38 CD cut NN off RP , , which WDT is VBZ supported VVN by IN LaRonde NP engineering NN reports NNS that WDT demonstrate VVP that DT economic JJ extraction NN can MD be VB justified VVN , , is VBZ applied VVN only RB in IN respect NN of IN the DT recovery NN of IN gold JJ mineralization NN located VVN in IN a DT part NN of IN the DT LaRonde NP Mine NP immediately RB adjacent JJ to TO zinc NN mineralization NN to TO which WDT the DT C $ 54 CD . SENT 43 CD cut NN off RB applies VVZ . SENT The DT zinc NN mineralization NN is VBZ economic JJ at IN a DT cut NN off IN grade NN of IN C NP 54 CD . SENT 43 CD and CC will MD be VB extracted VVN in IN the DT ordinary JJ course NN . SENT When WRB the DT zinc NN mineralization NN is VBZ extracted VVN , , the DT access NN costs NNS for IN the DT zinc NN will MD have VH been VBN incurred VVN . SENT To TO extract VV the DT gold JJ mineralization NN from IN this DT area NN once IN the DT adjacent JJ zinc NN mineralization NN has VHZ been VBN extracted VVN , , the DT Company NN will MD not RB have VH to TO incur VV additional JJ access NN costs NNS . SENT As IN a DT result NN , , the DT incremental JJ cost NN of IN extracting VVG the DT gold NN mineralization NN is VBZ low JJ , , and CC a DT cut NN off IN grade NN of IN C NP 35 CD . SENT 38 CD is VBZ appropriate JJ . SENT The DT metal NN grades NNS reported VVD in IN the DT mineral NN reserve NN estimate NN represent VVP in IN place NN grades NNS and CC do VVP not RB reflect VV losses NNS in IN the DT recovery NN process NN , , that WDT is VBZ , , the DT metallurgical JJ losses NNS associated VVN with IN processing VVG the DT extracted VVN ore NN . SENT The DT Company's NP historical JJ metallurgical JJ recovery NN rates NNS for IN gold NN at IN the DT LaRonde NP Mine NP to TO December NP 31 CD , , 2004 CD were VBD 91 CD . SENT 5 CD . SENT 86 CD . SENT 5 CD for IN silver NN , , 78 CD . SENT 9 CD for IN copper NN and CC 83 CD . SENT 5 CD for IN zinc NN . SENT The DT mineral NN reserve NN figures NNS presented VVD herein RB are VBP estimates NNS , , and CC no DT assurance NN can MD be VB given VVN that IN the DT anticipated JJ tonnages NNS and CC grades NNS will MD be VB achieved VVN or CC that IN the DT indicated JJ level NN of IN recovery NN will MD be VB realized VVN . SENT The DT 2005 CD mineral NN reserve NN and CC mineral NN resource NN estimate NN at IN LaRonde NP was VBD calculated VVN using VVG a DT gold JJ price NN of IN 360 CD per IN ounce NN , , a DT silver JJ price NN of IN 5 CD . SENT 42 CD per IN ounce NN , , a DT copper NN price NN of IN 0 CD . SENT 95 CD per IN pound NN , , a DT zinc NN price NN of IN 0 CD . SENT 41 CD per IN pound NN and CC a DT C NP US NP exchange NN rate NN of IN 1 CD . SENT 42 CD . SENT The DT metal NN and CC foreign JJ exchange NN assumptions NNS were VBD changed VVN in IN 2004 CD resulting VVG from IN changes NNS in IN the DT prices NNS for IN each DT metal NN and CC C NP US NP exchange NN rate NN and CC reflect VV the DT three CD year NN historical JJ average JJ initial JJ prices NNS and CC exchange NN rate NN for IN the DT three CD year NN period NN ended VVN December NP 31 CD , , 2004 CD . SENT The DT impact NN of IN the DT increase NN in IN gold JJ price NN from IN 325 CD to TO 360 CD was VBD essentially RB negated VVN by IN the DT change NN in IN the DT C NP US NP exchange NN rate NN from IN 1 CD . SENT 50 CD to TO 1 CD . SENT 42 CD . SENT For IN every DT 10 CD change NN in IN the DT gold JJ price NN , , there EX would MD be VB an DT estimated JJ 7 CD change NN in IN proven JJ and CC probable JJ reserves NNS . SENT 2 CD Represents VVZ contained VVN gold NN ounces NNS and CC does VVZ not RB include VV equivalent JJ gold NN ounces NNS for IN the DT byproduct NN metals NNS contained VVN in IN mineral NN reserve NN . SENT 24 CD Reconciliation NN of IN LaRonde NP Division NP Mineral NP Reserve NP The DT following VVG table NN shows VVZ the DT reconciliation NN of IN mineral NN reserves NNS in IN nearest JJS thousand CD tons NNS at IN the DT LaRonde NP Division NP by IN category NN as IN at IN December NP 31 CD , , 2003 CD to TO December NP 31 CD , , 2004 CD . SENT Proven JJ Probable JJ Total JJ December NP 31 CD , , 2003 CD 6 CD , , 848 CD 34 CD , , 754 CD 41 CD , , 602 CD Mined VVD 2 CD , , 977 CD 2 CD , , 977 CD Revision NN 2 CD , , 622 CD 535 CD 2 CD , , 088 CD December NP 31 CD , , 2004 CD 6 CD , , 493 CD 34 CD , , 219 CD 40 CD , , 713 CD Preparation NN of IN Scientific NP and CC Technical NP Data NP The DT personnel NNS at IN the DT LaRonde NP Division NP utilize VV quality NN assurance NN procedures NNS and CC assay NN protocols NNS in IN connection NN with IN drilling VVG and CC sampling VVG that IN conform VV to TO industry NN accepted VVD quality NN control NN procedures NNS . SENT Exploration NN drilling NN is VBZ carried VVN out RP on IN approximately RB a DT 400 CD foot NN by IN 400 CD foot NN pattern NN , , whereas IN reserve NN drilling NN is VBZ carried VVN out RP on IN approximately RB a DT 130 CD foot NN by IN 130 CD foot NN pattern NN . SENT Samples NNS are VBP taken VVN at IN regular JJ one CD foot NN to TO five CD feet NNS intervals NNS and CC assayed VVN for IN gold NN using VVG the DT fire NN assay NN method NN . SENT Drill NN hole NN collar NN , , survey NN and CC assay NN information NN used VVN in IN modelling VVG and CC resource NN estimation NN are VBP manually RB verified VVN by IN on IN site NN geologic JJ staff NN and CC all DT core JJ sample NN metal NN grades NNS are VBP verified VVN by IN independent JJ assay NN laboratories NNS . SENT Factors NNS that WDT could MD affect VV the DT accuracy NN or CC reliability NN of IN the DT results NNS of IN the DT sampling VVG and CC assaying VVG carried VVN out RP at IN the DT LaRonde NP Division NP include VVP uncleanliness NN of IN the DT coreshack NN area NN , , a DT dirty JJ coresaw NN , , the DT lack NN of IN an DT unobstructed JJ drain NN for IN water NN and CC rock NN cuttings NNS during IN the DT cutting VVG process NN , , the DT inability NN to TO collect VV uniform JJ representative NN samples NNS of IN adequate JJ size NN , , as RB well RB as IN an DT ore NN core NN recovery NN of IN less JJR than IN 100 CD . SENT In IN cases NNS of IN irregular JJ mineralization NN , , representative NN samples NNS are VBP sometimes RB chosen VVN in IN order NN to TO avoid VV introducing VVG a DT sampling VVG bias NN during IN cutting VVG . SENT Complete JJ information NN on IN the DT verification NN procedures NNS , , the DT quality NN assurance NN program NN , , quality NN control NN procedures NNS , , operating NN and CC capital NN cost NN assumptions NNS , , parameters NNS and CC methods NNS and CC a DT full JJ discussion NN of IN the DT factors NNS that WDT may MD materially RB affect VV mineral NN reserve NN and CC mineral NN resource NN estimates NNS may MD be VB found VVN in IN the DT 2005 CD LaRonde NP Mineral NP Resource NP and CC Mineral NP Reserve NP Estimate NP , , Agnico NP Eagle NP Mines NPS Limited NP , , LaRonde NP Division NP filed VVD with IN Canadian JJ Securities NPS Administrators NPS on IN SEDAR NP . SENT Lapa NP Project NP The NP Lapa NP Project NP is VBZ a DT pre NP production NN stage NN development NN property NN located VVN approximately RB seven CD miles NNS east JJ of IN the DT LaRonde NP Mine NP near IN Cadillac NP , , Quebec NP and CC is VBZ accessible JJ by IN provincial JJ highway NN . SENT The DT Lapa NP property NN is VBZ made VVN up RP of IN the DT Tonawanda NP property NN , , which WDT consists VVZ of IN 42 CD mining NN claims NNS totalling VVG approximately RB 1 CD , , 912 CD acres NNS , , and CC the DT Zulapa NP property NN , , which WDT consists VVZ of IN one CD mining NN concession NN totalling VVG approximately RB 231 CD acres NNS . SENT In IN 2002 CD , , soon RB after IN signing VVG an DT initial JJ option NN agreement NN with IN Breakwater NN Resources NPS and CC undertaking VVG an DT aggressive JJ exploration NN program NN , , the DT Company NN discovered VVD a DT new JJ gold NN deposit NN almost RB 1 CD , , 000 CD feet NNS below IN the DT surface NN . SENT In IN 2003 CD , , the DT Company NN purchased VVD the DT Lapa NP property NN from IN Breakwater NN Resources NP for IN a DT payment NN of IN 8 CD . SENT 925 CD million CD , , a DT 1 CD net JJ smelter NN return NN royalty NN on IN the DT Tonawanda NP property NN and CC a DT 0 CD . SENT 5 CD net JJ smelter NN return NN royalty NN on IN the DT Zulapa NP property NN . SENT An DT additional JJ 1 CD million CD is VBZ payable JJ to TO Breakwater VV if IN the DT published VVN inferred VVN mineral NN resource NN at IN the DT Lapa NP property NN reaches VVZ 2 CD . SENT 0 CD million CD ounces NNS of IN gold NN . SENT Of IN the DT total JJ potential JJ cash NN consideration NN of IN 9 CD . SENT 925 CD million CD , , 2 CD . SENT 0 CD million CD may MD be VB used VVN by IN the DT Company NN as IN a DT credit NN to TO offset VV net JJ smelter NN return NN royalties NNS payable JJ . SENT In IN February NP 2003 CD , , the DT inferred VVN mineral NN resource NN for IN the DT Lapa NP property NN , , which WDT consisted VVD entirely RB of IN the DT Contact NP Zone NP lens NN , , was VBD estimated VVN to TO be VB 3 CD , , 270 CD , , 546 CD tons NNS grading VVG 0 CD . SENT 249 CD ounces NNS per IN ton NN of IN gold NN . SENT Most JJS of IN the DT mineralized VVN drill NN holes NNS in IN the DT Contact NP Zone NP contain VVP visible JJ gold NN . SENT For IN this DT mineral NN resource NN estimate NN , , high JJ assay NN values NNS were VBD capped VVN at IN 1 CD . SENT 50 CD ounces NNS per IN ton NN . SENT Drilling NN throughout IN 2003 CD also RB confirmed VVD a DT new JJ zone NN , , the DT Contact NP South NP Zone NP , , immediately RB adjacent JJ to TO the DT west NN and CC south RB of IN the DT Contact NP Zone NP . SENT The DT 2003 CD drilling NN program NN also RB focused VVN on IN infill NN drilling NN that WDT resulted VVD in IN the DT resource NN to TO reserve VV conversion NN at IN year NN end NN . SENT In IN 2003 CD , , the DT Company NN also RB focused VVN on IN collecting VVG material NN to TO be VB used VVN in IN conducting VVG metallurgical JJ testing NN and CC preliminary JJ engineering NN and CC baseline JJ environmental JJ studies NNS were VBD initiated VVN . SENT As RB of IN December NP 31 CD , , 2003 CD the DT Lapa NP property NN had VHD probable JJ mineral NN reserves NNS of IN 4 CD . SENT 6 CD million CD tons NNS grading VVG 0 CD . SENT 25 CD gold JJ ounces NNS per IN ton NN . SENT 25 CD Drilling NN in IN 2004 CD concentrated VVN on IN expanding VVG the DT known VVN ore NN bodies NNS Contact NP Zone NP and CC Contact NP South NP Zone NP as RB well RB as IN drilling VVG untested JJ portions NNS of IN the DT volcano NN sedimentary JJ contact NN in IN the DT eastern JJ portion NN of IN the DT property NN . SENT Exploration NN drilling NN , , in IN particular JJ drill NN holes NNS 118 CD 04 CD 52 CD B NP , , 118 CD 04 CD 57 CD C NP and CC 118 CD 04 CD 57 CD E NN which WDT tested VVD below IN the DT lowest JJS level NN of IN the DT Lapa NP property NN reserves NNS at IN approximately RB 4 CD , , 100 CD feet NNS below IN the DT surface NN successfully RB traced VVD the DT Contact NP Zone NP lens NN in IN particular JJ to TO a DT depth NN of IN 5 CD , , 200 CD feet NNS and CC the DT deposit NN remains VVZ open JJ for IN expansion NN at IN depth NN . SENT The DT results NNS are VBP summarized VVD below RB . SENT Drill VV Hole NP True NP Thickness NN ft NP From IN To TO Gold NP oz NP ton NN Cut NP 1 CD . SENT 5 CD oz NP 118 CD 04 CD 52 CD B NP 9 CD . SENT 8 CD 4 CD , , 832 CD . SENT 6 CD 4 CD , , 845 CD . SENT 7 CD 0 CD . SENT 20 CD 118 JJ 04 CD 57 CD C NP 19 CD . SENT 7 CD 6 CD , , 189 CD . SENT 9 CD 6 CD , , 210 CD . SENT 2 CD 0 CD . SENT 21 CD 118 JJ 04 CD 57 CD E NN 12 CD . SENT 5 CD 5 CD , , 997 CD . SENT 0 CD 6 CD , , 009 CD . SENT 8 CD 0 CD . SENT 20 CD Preliminary JJ engineering NN throughout IN 2004 CD was VBD focused VVN on IN providing VVG various JJ options NNS for IN the DT development NN of IN the DT property NN . SENT In IN 2004 CD the DT Company NN initiated VVD a DT project NN to TO sink VV a DT 2 CD , , 700 CD foot NN deep JJ shaft NN at IN the DT Lapa NP property NN . SENT Completion NN of IN the DT shaft NN is VBZ expected VVN to TO occur VV in IN 2006 CD . SENT The DT shaft NN will MD provide VV access NN for IN underground JJ diamond NN drilling NN to TO test VV the DT depth NN potential NN of IN the DT deposit NN , , confirm VVP appropriate JJ mining NN methods NNS and CC initiate VV a DT bulk JJ sampling NN program NN . SENT Activity NN at IN the DT Lapa NP property NN in IN 2005 CD will MD focus VV on IN the DT construction NN of IN the DT shaft NN and CC initiating VVG the DT underground JJ drilling NN program NN . SENT At IN December NP 31 CD , , 2004 CD , , the DT Lapa NP property NN contained VVD 4 CD . SENT 5 CD million CD tons NNS of IN probable JJ reserves NNS grading VVG 0 CD . SENT 26 CD ounces NNS of IN gold NN per IN ton NN . SENT The DT slight JJ reduction NN in IN probable JJ reserves NNS less JJR than IN 2 CD in IN contained VVN gold NN ounces NNS is VBZ mainly RB due JJ to TO drilling NN results NNS in IN 2004 CD that WDT affected VVD the DT western JJ limit NN of IN the DT Lapa NP deposit NN . SENT December NP 31 CD , , 2004 CD December NP 31 CD , , 2003 CD Gold NP Probable JJ tons NNS 4 CD , , 509 CD , , 000 CD 4 CD , , 661 CD , , 000 CD Average JJ grade NN gold NN ounces NNS per IN ton NN 0 CD . SENT 26 CD 0 CD . SENT 25 CD Total JJ mineral NN reserve NN tons NNS 4 CD , , 509 CD , , 000 CD 4 CD , , 661 CD , , 000 CD Total JJ contained JJ gold NN ounces NNS 1 CD , , 168 CD , , 000 CD 1 CD , , 187 CD , , 000 CD Tonnage NN information NN is VBZ rounded VVN to TO the DT nearest JJS 100 CD , , 000 CD tons NNS . SENT Notes NNS . SENT 1 LS The DT 2004 CD mineral NN reserve NN and CC mineral NN resource NN estimate NN was VBD calculated VVN using VVG a DT gold JJ price NN of IN 360 CD per IN ounce NN and CC a DT C NP US NP exchange NN rate NN of IN 1 CD . SENT 42 CD . SENT In IN estimating VVG the DT Lapa NP probable JJ mineral NN reserve NN and CC mineral NN resource NN , , cut VVD off RP grades NNS of IN 0 CD . SENT 19 CD and CC 0 CD . SENT 15 CD ounces NNS per IN ton NN , , respectively RB , , were VBD used VVN to TO evaluate VV drill NN intercepts NNS that WDT have VHP been VBN adjusted VVN to TO respect VV a DT minimum JJ mining NN width NN of IN 9 CD . SENT 2 CD feet NNS . SENT Separate JJ cut NN off IN grades NNS are VBP used VVN for IN the DT estimation NN of IN mineral NN reserves NNS and CC mineral NN resources NNS . SENT The DT cut NN off IN grade NN used VVN for IN the DT estimate NN of IN mineral NN reserves NNS is VBZ based VVN on IN the DT grades NNS used VVN in IN the DT preliminary JJ feasibility NN study NN or CC feasibility NN study NN that WDT supports VVZ the DT estimate NN of IN mineral NN reserves NNS whereas IN the DT cut NN off IN grade NN used VVN for IN the DT estimation NN of IN mineral NN resources NNS is VBZ determined VVN by IN the DT Company NN based VVN on IN the DT minimum JJ grade NN of IN ore NN that WDT has VHZ reasonable JJ prospects NNS for IN economic JJ extraction NN . SENT The DT estimate NN was VBD derived VVN using VVG a DT three CD dimensional JJ block NN model NN of IN the DT deposit NN . SENT the DT grades NNS were VBD interpolated VVN using VVG the DT inverse JJ distance NN power NN squared VVD method NN . SENT The DT metal NN grades NNS reported VVD in IN the DT mineral NN reserve NN estimate NN represent VVP in IN place NN grades NNS and CC do VVP not RB reflect VV losses NNS in IN the DT recovery NN process NN , , that WDT is VBZ , , the DT metallurgical JJ losses NNS associated VVN with IN processing VVG the DT extracted VVN ore NN . SENT The DT mineral NN reserve NN and CC resource NN figures NNS presented VVD herein RB are VBP estimates NNS , , and CC no DT assurance NN can MD be VB given VVN that IN the DT anticipated JJ tonnages NNS and CC grades NNS will MD be VB achieved VVN or CC that IN the DT indicated JJ level NN of IN recovery NN will MD be VB realized VVN . SENT In IN addition NN to TO the DT mineral NN reserves NNS set VVD out RP above IN , , at IN December NP 31 CD , , 2004 CD the DT Lapa NP property NN contained VVD 0 CD . SENT 8 CD million CD tons NNS of IN indicated JJ mineral NN resource NN grading VVG 0 CD . SENT 16 CD ounces NNS of IN gold NN per IN ton NN and CC 1 CD . SENT 9 CD million CD tons NNS of IN inferred VVN mineral NN resource NN grading VVG 0 CD . SENT 22 CD ounces NNS of IN gold NN per IN ton NN . SENT As RB at IN December NP 31 CD , , 2003 CD , , the DT Lapa NP property's NNS estimated VVD indicated JJ mineral NN resource NN was VBD 0 CD . SENT 7 CD million CD tons NNS grading VVG 0 CD . SENT 16 CD ounces NNS of IN gold NN per IN ton NN and CC its PP$ estimated JJ inferred VVN mineral NN resource NN was VBD 0 CD . SENT 3 CD million CD tons NNS grading VVG 0 CD . SENT 18 CD ounces NNS of IN gold NN per IN ton NN . SENT 2 CD For IN the DT 2004 CD mineral NN reserve NN and CC mineral NN resource NN estimate NN , , high JJ assay NN values NNS were VBD capped VVN at IN 1 CD . SENT 5 CD and CC 2 CD . SENT 0 CD ounces NNS of IN gold NN per IN ton NN , , respectively RB , , for IN the DT Contact NP Zone NP and CC Contact NP South NP Zone NP that WDT comprise VVP the DT Lapa NP deposit NN . SENT Preparation NN of IN Scientific NP and CC Technical NP Data NP The DT qualified JJ person NN responsible JJ for IN the DT Lapa NP mineral NN reserves NNS and CC mineral NN resource NN estimate NN is VBZ Christian NP D'Amours NP , , P NN . SENT Geo NP . SENT , , of IN Service NP Conseil NP Geopointcom NP . SENT All DT Lapa NP drill NN core NN has VHZ been VBN logged VVN and CC the DT results NNS have VHP been VBN verified VVN by IN Dino NP Lombardi NP , , P NN . SENT Geo NP . SENT , , Senior JJ Geologist NN , , Exploration NP Division NP , , who WP is VBZ fully RB qualified VVN per IN the DT 26 CD standards NNS outlined VVN in IN National NP Instrument NP 43 CD 101 CD . SENT The DT Exploration NP Division NP personnel NNS utilize VV quality NN assurance NN and CC assay NN protocols NNS that WDT conform VVP to TO industry NN accepted VVD quality NN control NN procedures NNS . SENT Exploration NN drilling NN at IN Lapa NP is VBZ carried VVN out RP on IN approximately RB a DT 400 CD foot NN by IN 400 CD foot NN pattern NN , , whereas IN probable JJ reserve NN drilling NN is VBZ carried VVN out RP on IN approximately RB a DT 260 CD foot NN by IN 260 CD foot NN pattern NN . SENT Samples NNS are VBP taken VVN consecutively RB at IN one CD foot NN to TO five CD feet NNS intervals NNS . SENT The DT drill NN core NN selected VVN for IN analysis NN is VBZ sawed VVN in IN half NN with IN one CD half NN sent VVD to TO a DT commercial JJ laboratory NN and CC the DT other JJ half NN retained VVN for IN future JJ reference NN . SENT Upon IN reception NN of IN the DT assay NN results NNS , , the DT pulps NNS and CC rejects NNS are VBP recovered VVN and CC submitted VVN to TO a DT second JJ laboratory NN for IN check NN assay NN purposes NNS . SENT The DT gold NN assaying VVG method NN uses VVZ a DT 30 CD gram NN sample NN by IN Fire NP Assay NN or CC Metallic JJ Sieve NN finish NN as IN requested VVN by IN the DT project NN geologist NN . SENT The DT laboratories NNS used VVN are VBP Bourlamaque NP Assay NN Laboratories NP Ltd NP . SENT , , Val NP d'Or NP , , Quebec NP , , and CC Expert NN Laboratories NPS Inc NP . SENT , , Rouyn NP Noranda NP , , Quebec NP . SENT Goldex NP Project NP The NP Goldex NP Project NP is VBZ a DT development NN property NN held VVN under IN 22 CD claims NNS , , totalling VVG approximately RB 661 CD . SENT 7 CD acres NNS . SENT The DT Goldex NP property NN is VBZ located VVN in IN Val NP d'Or NP , , Quebec NP and CC is VBZ accessible JJ by IN provincial JJ highway NN . SENT The DT claims NNS are VBP renewable JJ every DT second JJ year NN upon IN payment NN of IN a DT small JJ fee NN . SENT The DT Company NN has VHZ a DT 100 CD working VVG interest NN in IN the DT Goldex NP property NN . SENT The DT Goldex NP property NN is VBZ made VVN of IN three CD claim NN blocks NNS . SENT the DT Probe NN block NN ten CD claims NNS , , 302 CD . SENT 4 CD acres NNS . SENT the DT Dalton NP block NN one CD claim NN , , 25 CD . SENT 7 CD acres NNS . SENT and CC the DT Goldex NP Extension NP block NN 11 CD claims NNS , , 333 CD . SENT 6 CD acres NNS . SENT The DT Goldex NP Extension NP Zone NP , , which WDT is VBZ the DT gold JJ deposit NN on IN which WDT the DT Company NN is VBZ currently RB focusing VVG its PP$ exploration NN and CC development NN efforts NNS , , was VBD discovered VVN in IN 1989 CD on IN the DT Goldex NP Extension NP claim NN block NN although IN a DT small JJ portion NN of IN the DT deposit NN is VBZ interpreted VVN to TO occur VV on IN both CC the DT Dalton NP and CC Probe NN claim NN blocks NNS . SENT Probe NN Mines NP Ltd NP . SENT holds VVZ a DT 5 CD net JJ smelter NN return NN royalty NN interest NN on IN the DT Probe NN claim NN block NN . SENT Should MD commercial JJ production NN commence VV on IN the DT Dalton NP claim NN , , 18 CD , , 000 CD shares NNS of IN the DT Company NN will MD be VB issued VVN to TO the DT estate NN of IN John NP Michael NP Dalton NP Jr NP . SENT The DT Goldex NP Extension NP block NN claims NNS are VBP subject JJ to TO a DT 1 CD net JJ smelter NN return NN royalty NN interest NN in IN favour NN of IN Donald NP , , Bernard NP , , Marlin NP and CC Christine NP Charlebois NP . SENT The DT surface NN facilities NNS at IN the DT Goldex NP Project NP include VVP a DT headframe NN , , a DT surface NN building NN containing VVG a DT mechanical JJ shop NN , , a DT warehouse NN , , an DT office NN and CC a DT 2 CD , , 600 CD foot NN shaft NN , , which WDT provides VVZ underground JJ access NN . SENT Since IN 1989 CD , , the DT Company NN has VHZ undertaken VVN a DT major JJ exploration NN program NN on IN the DT Goldex NP Extension NP Zone NP . SENT This DT program NN included VVD deepening VVG the DT shaft NN from IN 1 CD , , 500 CD feet NNS to TO its PP$ current JJ 2 CD , , 600 CD foot NN depth NN , , over IN 158 CD , , 700 CD feet NNS of IN drilling NN , , over IN 6 CD , , 833 CD feet NNS of IN horizontal JJ development NN , , 146 CD , , 500 CD cubic JJ feet NNS of IN slashing VVG , , 476 CD . SENT 2 CD feet NNS of IN raising VVG and CC the DT extraction NN and CC milling NN of IN two CD bulk NN samples NNS 36 CD , , 743 CD tons NNS in IN 1995 CD and CC 113 CD , , 395 CD tons NNS in IN 1996 CD . SENT Underground JJ exploration NN drilling NN in IN 1997 CD confirmed VVD earlier JJR results NNS that WDT outlined VVD a DT large JJ zone NN of IN low JJ grade NN mineralization NN ranging VVG from IN 20 CD to TO 25 CD million CD tons NNS in IN size NN with IN a DT gold JJ grade NN in IN the DT range NN of IN 0 CD . SENT 064 CD to TO 0 CD . SENT 072 CD ounces NNS per IN ton NN using VVG a DT cutting VVG factor NN of IN one CD ounce NN per IN ton NN . SENT In IN 1997 CD , , the DT Company NN completed VVD a DT mining NN study NN that WDT showed VVD that IN the DT deposit NN was VBD not RB economically RB viable JJ to TO mine NN using VVG the DT mining NN approach NN chosen VVN and CC drill NN hole NN indicated VVD grade NN . SENT Results NNS from IN the DT bulk JJ sampling NN suggested VVD , , however RB , , that IN the DT estimation NN method NN used VVN may MD have VH underestimated VVN the DT realized VVN grade NN for IN the DT Goldex NP Extension NP Zone NP . SENT However RB , , in IN late JJ 1997 CD , , in IN view NN of IN the DT then RB prevailing JJ market NN price NN of IN gold NN , , the DT property NN was VBD placed VVN on IN a DT care NN and CC maintenance NN basis NN . SENT In IN September NP 1998 CD , , the DT workings NNS were VBD allowed VVN to TO flood VV . SENT The DT carrying VVG value NN of IN the DT Goldex NP Project NP was VBD written VVN down RB to TO nil NN in IN 1997 CD . SENT Throughout IN 2003 CD , , the DT Company NP re NN evaluated VVD the DT Goldex NP project NN reviewing VVG mining NN methods NNS and CC grade NN estimation NN methods NNS . SENT In IN February NP 2004 CD , , a DT new JJ reserve NN and CC resource NN estimate NN was VBD completed VVN for IN the DT Goldex NP Extension NP Zone NP conforming VVG to TO National NP Instrument NP 43 CD 101 CD which WDT , , coupled VVN with IN a DT new JJ preliminary JJ feasibility NN study NN , , led VVN to TO a DT probable JJ reserve NN estimate NN of IN 1 CD . SENT 6 CD million CD ounces NNS of IN gold NN contained VVN in IN 24 CD . SENT 0 CD million CD tons NNS grading VVG 0 CD . SENT 069 CD ounces NNS of IN gold NN per IN ton NN . SENT In IN addition NN , , the DT February NP 2004 CD reserve NN and CC resource NN estimate NN led VVN to TO an DT indicated JJ resource NN estimate NN of IN 1 CD . SENT 2 CD million CD tons NNS grading VVG 0 CD . SENT 077 CD ounces NNS of IN gold NN per IN ton NN and CC an DT inferred VVN resource NN estimate NN of IN 2 CD . SENT 8 CD million CD tons NNS grading VVG 0 CD . SENT 062 CD ounces NNS of IN gold NN per IN ton NN . SENT In IN February NP 2004 CD , , based VVN on IN a DT review NN of IN the DT project NN conducted VVN by IN independent JJ engineers NNS , , the DT Company NN decided VVD to TO undertake VV a DT 4 CD . SENT 7 CD million CD underground JJ bulk NN sampling VVG program NN to TO provide VV additional JJ geological JJ and CC sampling VVG information NN to TO increase VV the DT level NN of IN confidence NN in IN the DT gold JJ grade NN . SENT Three CD vertical JJ raises NNS plus CC additional JJ diamond NN drilling NN would MD be VB completed VVN in IN 2004 CD with IN a DT bulk JJ sample NN to TO be VB processed VVN in IN the DT first JJ quarter NN of IN 2005 CD . SENT 27 CD Dewatering NN of IN the DT underground JJ workings NNS was VBD completed VVN in IN 2004 CD in IN preparation NN for IN a DT bulk JJ sample NN . SENT The DT shaft NN bottom NN is VBZ at IN a DT depth NN of IN 2 CD , , 610 CD feet NNS . SENT Shaft NN rehabilitation NN was VBD completed VVN to TO a DT depth NN of IN 750 CD feet NNS . SENT In IN 2004 CD , , a DT total NN of IN 2 CD , , 000 CD feet NNS of IN raise NN development NN was VBD excavated VVN through IN the DT center NN of IN the DT gold JJ mineralization NN at IN three CD separate JJ locations NNS along IN the DT 1 CD , , 500 CD feet NNS strike NN length NN of IN the DT Goldex NP deposit NN . SENT Mapping VVG and CC sampling VVG of IN these DT raises NNS started VVD in IN 2004 CD and CC was VBD completed VVN in IN January NP 2005 CD . SENT Over IN 17 CD , , 000 CD feet NNS of IN diamond NN drilling NN was VBD also RB completed VVN . SENT An DT 18 CD , , 213 CD ton NN bulk NN sample NN , , that WDT was VBD gathered VVN during IN the DT excavation NN of IN the DT raises NNS , , was VBD processed VVN during IN late JJ January NP and CC February NP 2005 CD and CC returned VVD a DT grade NN of IN 0 CD . SENT 081 CD ounces NNS of IN gold NN per IN ton NN , , nearly RB 10 CD higher JJR than IN the DT grade NN of IN 0 CD . SENT 074 CD ounces NNS of IN gold NN per IN ton NN returned VVN during IN the DT 113 CD , , 000 CD ton NN bulk NN sample NN processed VVN in IN 1997 CD . SENT The DT following VVG table NN shows VVZ the DT Goldex NP property NN reserves NNS as IN of IN December NP 31 CD , , 2004 CD . SENT While IN the DT current JJ probable JJ reserve NN estimate NN is VBZ essentially RB unchanged JJ at IN 1 CD . SENT 6 CD million CD contained VVN ounces NNS of IN gold NN , , the DT geological JJ confirmation NN program NN has VHZ greatly RB increased VVN the DT confidence NN level NN in IN the DT estimate NN . SENT December NP 31 CD , , 2004 CD December NP 31 CD , , 2003 CD Gold NP Probable JJ tons NNS 22 CD , , 148 CD , , 000 CD 23 CD , , 983 CD , , 000 CD Average JJ grade NN gold NN ounces NNS per IN ton NN 0 CD . SENT 074 CD 0 CD . SENT 069 CD Total JJ mineral NN reserve NN 1 CD tons NNS 22 CD , , 148 CD , , 000 CD 23 CD , , 983 CD , , 000 CD Total JJ contained JJ gold NN ounces NNS 1 CD , , 627 CD , , 000 CD 1 CD , , 647 CD , , 000 CD Tonnage NN information NN is VBZ rounded VVN to TO the DT nearest JJS 100 CD , , 000 CD tons NNS . SENT Notes NNS . SENT 1 LS The DT 2005 CD mineral NN reserve NN and CC mineral NN resource NN estimate NN was VBD calculated VVN using VVG a DT gold JJ price NN of IN 360 CD per IN ounce NN and CC a DT C NP US NP exchange NN rate NN of IN 1 CD . SENT 42 CD . SENT The DT cut NN off IN grade NN used VVN to TO evaluate VV drill NN intercepts NNS at IN Goldex NP was VBD 0 CD . SENT 04 CD ounce NN per IN ton NN over IN a DT minimum JJ true JJ thickness NN of IN 50 CD feet NNS . SENT The DT reserve NN was VBD derived VVN by IN evaluating VVG a DT three CD dimensional JJ model NN of IN the DT Goldex NP Extension NP Zone NP , , whose WP$ gold NN grade NN was VBD estimated VVN using VVG a DT 95 CD confidence NN interval NN grade NN calculation NN method NN , , and CC then RB adjusting VVG the DT model NN envelope NN to TO only RB include VV sectors NNS with IN a DT greater JJR than IN 75 CD probability NN of IN exceeding VVG the DT 0 CD . SENT 04 CD ounce NN per IN ton NN cut NN off IN grade NN . SENT The DT metal NN grades NNS reported VVD in IN the DT mineral NN reserve NN estimate NN represent VVP in IN place NN grades NNS and CC do VVP not RB reflect VV losses NNS in IN the DT recovery NN process NN , , that WDT is VBZ , , the DT metallurgical JJ losses NNS associated VVN with IN processing VVG the DT extracted VVN ore NN . SENT The DT mineral NN reserve NN and CC resource NN figures NNS presented VVD herein RB are VBP estimates NNS , , and CC no DT assurance NN can MD be VB given VVN that IN the DT anticipated JJ tonnages NNS and CC grades NNS will MD be VB achieved VVN or CC that IN the DT indicated JJ level NN of IN recovery NN will MD be VB realized VVN . SENT In IN addition NN to TO the DT mineral NN reserves NNS set VVD out RP above IN , , the DT Goldex NP property NN contained VVD 0 CD . SENT 9 CD million CD tons NNS of IN indicated JJ resource NN grading VVG 0 CD . SENT 07 CD ounces NNS of IN gold NN per IN ton NN and CC 3 CD . SENT 5 CD million CD tons NNS of IN inferred VVN mineral NN resource NN grading VVG 0 CD . SENT 05 CD ounces NNS per IN ton NN . SENT As RB at IN December NP 31 CD , , 2003 CD , , Goldex NP was VBD estimated VVN to TO have VH 1 CD . SENT 2 CD million CD tons NNS of IN indicated JJ resource NN grading VVG 0 CD . SENT 08 CD ounces NNS of IN gold NN per IN ton NN and CC 2 CD . SENT 8 CD million CD tons NNS of IN inferred VVN mineral NN resource NN grading VVG 0 CD . SENT 18 CD ounces NNS of IN gold NN per IN ton NN . SENT Preparation NN of IN Scientific NP and CC Technical NP Data NP At IN Goldex NP , , exploration NN drilling NN was VBD carried VVN out RP on IN approximately RB a DT 300 CD foot NN by IN 600 CD foot NN pattern NN whereas IN probable JJ reserve NN drilling NN was VBD carried VVN out RP on IN approximately RB a DT 100 CD foot NN by IN 100 CD foot NN pattern NN . SENT Core NN samples NNS were VBD taken VVN consecutively RB at IN one CD foot NN to TO five CD feet NNS intervals NNS . SENT The DT core NN selected VVN for IN analysis NN was VBD cut VVN or CC sawed VVN in IN half NN with IN one CD half NN sent VVD to TO a DT commercial JJ assay NN laboratory NN . SENT Prior RB to TO 2004 CD , , 1 CD . SENT 4 CD inch NN diameter NN , , or CC BQ NP , , core NN was VBD used VVN to TO test VV the DT Goldex NP Extension NP Zone NP . SENT whereas IN in IN 2004 CD , , 1 CD . SENT 8 CD inch NN diameter NN , , or CC NQ NP , , core NN drilling NN was VBD completed VVN at IN Goldex NP . SENT Upon IN reception NN of IN the DT assay NN results NNS , , at IN least JJS 10 CD of IN the DT pulps NNS and CC rejects NNS were VBD sent VVN to TO another DT laboratory NN for IN check NN assay NN purposes NNS . SENT Prior RB to TO 2004 CD , , the DT principal JJ gold NN assaying VVG method NN used VVN was VBD either RB by IN Fire NP Assay NN with IN an DT atomic JJ absorption NN of IN a DT 30 CD gram NN pulverized VVD sub NN sample NN or CC by IN Metallic JJ Sieve NN assaying VVG method NN of IN a DT 30 CD gram NN pulverized VVD sub NN sample NN . SENT The DT principal JJ laboratory NN used VVN was VBD Abilab NP Laboratories NPS , , Val NP d'Or NP Quebec NP . SENT During IN the DT 2004 CD 2005 CD program NN , , ALS NPS Chemex NP of IN Val NP d'Or NP Quebec NP completed VVD all DT of IN the DT assaying VVG of IN core NN and CC chip NN samples NNS . SENT The DT principal JJ assaying VVG method NN was VBD by IN Fire NP Assay NN with IN an DT atomic JJ absorption NN or CC gravimetric JJ finish NN of IN a DT 50 CD gram NN pulverized VVD sub NN sample NN . SENT In IN the DT case NN of IN visible JJ gold NN , , a DT 1000 CD gram NN pulverized VVD sub NN sample NN was VBD assayed VVN using VVG the DT Total JJ Pulverisation NN method NN . SENT Bousquet NP and CC Ellison NP Properties NPS The DT Bousquet NP property NN is VBZ located VVN immediately RB west RB of IN the DT LaRonde NP property NN and CC consists VVZ of IN two CD mining NN leases VVZ 180 CD . SENT 6 CD acres NNS and CC 31 CD claims NNS 951 CD . SENT 0 CD acres NNS . SENT The DT property NN , , along RB with IN various JJ equipment NN and CC other JJ mining NN properties NNS , , was VBD acquired VVN from IN Barrick NP in IN September NP 2003 CD for IN 3 CD . SENT 9 CD million CD in IN cash NN including VVG transaction NN costs NNS , , 28 CD 1 CD . SENT 5 CD million CD in IN common JJ shares NNS of IN the DT Company NN , , and CC the DT assumption NN of IN specific JJ reclamation NN and CC other JJ obligations NNS related VVN to TO the DT Bousquet NP property NN . SENT The DT property NN is VBZ subject JJ to TO a DT 2 CD net JJ smelter NN return NN royalty NN interest NN in IN favour NN of IN Barrick NP . SENT The DT Ellison NP property NN is VBZ located VVN immediately RB west RB of IN the DT Bousquet NP property NN and CC consists VVZ of IN eight CD claims NNS 249 CD . SENT 8 CD acres NNS . SENT The DT property NN was VBD acquired VVN in IN August NP 2002 CD for IN C $ 0 CD . SENT 5 CD million CD in IN cash NN and CC a DT commitment NN to TO spend VV C $ 0 CD . SENT 5 CD million CD in IN exploration NN over IN four CD years NNS . SENT The DT property NN is VBZ subject JJ to TO a DT net JJ smelter NN return NN royalty NN interest NN in IN favour NN of IN Yorbeau NP Resources NPS Inc NP . SENT that DT varies VVZ between IN 1 CD . SENT 5 CD and CC 2 CD . SENT 5 CD depending VVG on IN the DT price NN of IN gold NN . SENT Should MD commercial JJ production NN from IN the DT Ellison NP property NN commence VV , , Yorbeau NP Resources NPS Inc NP . SENT will MD receive VV an DT additional JJ C NP 0 CD . SENT 5 CD million CD in IN cash NN . SENT As RB of IN December NP 31 CD , , 2004 CD , , Agnico NP Eagle NP has VHZ spent VVN C NP 1 CD . SENT 9 CD M NP in IN exploration NN on IN the DT Ellison NP property NN . SENT In IN the DT first JJ quarter NN of IN 2003 CD , , a DT mineral NN resource NN was VBD estimated VVN for IN the DT A NP Zone NP on IN the DT Ellison NP property NN conforming VVG to TO National NP Instrument NP 43 CD 101 CD . SENT The DT estimate NN , , which WDT used VVD a DT gold JJ price NN of IN 300 CD per IN ounce NN and CC 0 CD . SENT 09 CD ounce NN per IN ton NN cut NN off IN grade NN , , revealed VVD an DT indicated JJ mineral NN resource NN of IN 249 CD , , 000 CD tons NNS grading VVG 0 CD . SENT 16 CD ounces NNS of IN gold NN per IN ton NN . SENT With IN the DT underground JJ exploration NN access NN provided VVN by IN the DT Bousquet NP II NP infrastructure NN , , an DT exploration NN program NN was VBD initiated VVN in IN late RB 2003 CD to TO test VV the DT potential NN of IN both CC the DT Ellison NP and CC Bousquet NP properties NNS . SENT As RB of IN December NP 2004 CD , , exploration NN activity NN on IN the DT Ellison NP property NN totalled VVD 22 CD holes NNS totalling VVG 37 CD , , 422 CD feet NNS . SENT The DT two CD main JJ targets NNS were VBD the DT deep JJ extension NN of IN the DT Bousquet NP 1 CD corridor NN and CC the DT felsic JJ volcanic JJ package NN to TO the DT south NN . SENT The DT drilling NN activity NN on IN the DT Bousquet NP property NN for IN the DT same JJ period NN totalled VVD 57 CD , , 562 CD feet NNS in IN 32 CD holes NNS . SENT The DT main JJ targets NNS were VBD the DT deep JJ extension NN of IN the DT Bousquet NP 2 CD ore NN body NN , , the DT deep JJ extension NN of IN the DT 3 CD 1 CD Zone NP and CC the DT felsic JJ volcanic JJ package NN to TO the DT south NN which WDT may MD potentially RB contain VV mineralization NN similar JJ to TO that WDT found VVD at IN the DT Laronde NP Mine NP . SENT In IN addition NN , , in IN 2003 CD , , the DT mineral NN resources NNS at IN the DT Bousquet NP and CC Ellison NP properties NNS were VBD reviewed VVN with IN the DT possibility NN of IN mining NN resource NN blocks NNS which WDT could MD become VV potentially RB economic JJ given VVN the DT proximity NN of IN the DT mill NN facility NN at IN LaRonde NP . SENT The DT result NN was VBD the DT definition NN of IN a DT small JJ proven JJ mineral NN reserve NN 104 CD , , 000 CD tons NNS grading VVG 0 CD . SENT 09 CD ounces NNS of IN gold NN per IN ton NN of IN which WDT 100 CD , , 419 CD tonnes NNS were VBD extracted VVN in IN 2004 CD from IN a DT small JJ open JJ pit NN mine NN grading VVG 0 CD . SENT 07 CD ounces NNS of IN gold NN per IN ton NN . SENT In IN addition NN , , 20 CD , , 124 CD tons NNS of IN low JJ grade NN material NN grading VVG 0 CD . SENT 04 CD ounces NNS of IN gold NN per IN ton NN and CC 284 CD , , 459 CD tons NNS of IN waste NN were VBD extracted VVN . SENT As RB of IN December NP 31 CD 2004 CD , , 63 CD , , 287 CD tons NNS have VHP been VBN milled VVN at IN a DT grade NN of IN 0 CD . SENT 08 CD ounces NNS of IN gold NN per IN ton NN . SENT The DT remaining JJ ore NN and CC the DT low JJ grade NN material NN is VBZ crushed VVN and CC stockpiled VVN close NN to TO the DT mill NN . SENT The DT 2004 CD measured VVN and CC indicated VVN mineral NN resource NN at IN the DT Bousquet NP property NN is VBZ approximately RB 2 CD . SENT 0 CD million CD tons NNS grading VVG 0 CD . SENT 18 CD ounces NNS of IN gold NN per IN ton NN and CC the DT inferred VVN mineral NN resource NN is VBZ 2 CD . SENT 0 CD million CD tons NNS grading VVG 0 CD . SENT 22 CD ounces NNS of IN gold NN per IN ton NN . SENT The DT December NP 31 CD , , 2004 CD measured VVN and CC indicated VVN mineral NN resource NN at IN Ellison NP is VBZ 0 CD . SENT 3 CD million CD tons NNS grading VVG 0 CD . SENT 17 CD ounces NNS of IN gold NN per IN ton NN , , almost RB unchanged JJ from IN December NP 31 CD , , 2003 CD , , but CC the DT inferred VVN resource NN decreased VVD to TO 1 CD . SENT 1 CD million CD tons NNS grading VVG 0 CD . SENT 19 CD ounces NNS of IN gold NN per IN ton NN . SENT The DT main JJ changes NNS occurred VVD in IN the DT newly RB named VVN Zone NP 3 CD 4 CD formerly RB called VVN the DT Deep JJ Zone NP 3 CD which WDT represents VVZ the DT deep JJ extension NN of IN the DT Bousquet NP 1 CD mineralization NN . SENT The DT zone NN straddled VVD the DT Bousquet NP Ellison NP property NN boundary NN . SENT The DT tonnage NN and CC grade NN decreased VVD significantly RB but CC the DT drilling NN allowed VVD the DT delineation NN of IN approximately RB 0 CD . SENT 4 CD million CD tons NNS of IN indicated JJ resources NNS grading VVG 0 CD . SENT 26 CD ounces NNS of IN gold NN per IN ton NN . SENT The DT exploration NN program NN will MD continue VV during IN the DT first JJ quarter NN of IN 2005 CD with IN approximately RB 29 CD , , 000 CD feet NNS of IN diamond NN drilling NN at IN a DT budgeted VVN cost NN of IN C NP 1 CD . SENT 6 CD million CD . SENT Following VVG that DT program NN , , a DT revision NN of IN the DT economic JJ potential NN of IN the DT resource NN identified VVN on IN both DT properties NNS will MD be VB initiated VVN and CC should MD be VB terminated VVN during IN the DT third JJ quarter NN . SENT Preparation NN of IN Scientific NP and CC Technical NP Data NP In IN estimating VVG the DT Bousquet NP and CC Ellison NP 2004 CD mineral NN reserve NN and CC mineral NN resource NN , , a DT minimum JJ gold NN cut VVN off IN grade NN of IN 0 CD . SENT 09 CD ounces NNS of IN gold NN per IN ton NN was VBD used VVN to TO evaluate VV drill NN intercepts NNS that WDT have VHP been VBN adjusted VVN to TO respect VV a DT minimum JJ mining NN width NN of IN 9 CD . SENT 8 CD feet NNS . SENT The DT estimate NN was VBD derived VVN using VVG a DT combination NN of IN three CD dimensional JJ block NN modelling VVG grades NNS were VBD interpolated VVN using VVG the DT inverse JJ distance NN power NN squared VVD method NN for IN certain JJ zones NNS and CC for IN the DT other JJ zones NNS , , by IN the DT polygonal JJ method NN on IN longitudinal JJ sections NNS . SENT A DT portion NN of IN the DT resource NN estimate NN is VBZ based VVN on IN estimates NNS reported VVD when WRB the DT Bousquet NP I NN mine NN closed VVD in IN 1996 CD . SENT This DT information NN is VBZ of IN a DT good JJ quality NN and CC is VBZ considered VVN reliable JJ . SENT The DT resource NN was VBD reviewed VVN and CC reclassified VVD using VVG the DT CIM NP Standards NPS on IN Mineral NP Resources NPS 29 NP and CC Mineral NP Reserves NPS Definitions NNS and CC Guidelines NNS the DT CIM NP Guidelines NNS published VVN by IN the DT Canadian NP Institute NP of IN Mining NP , , Metallurgy NN and CC Petroleum NP . SENT Joutel NP Project NP The DT Joutel NP properties NNS consist VVP of IN the DT Eagle NP Mine NP including VVG the DT Eagle NP West NP Zone NP and CC the DT Telbel NP Mine NP , , in IN Joutel NP Township NP , , Quebec NP , , located VVN approximately RB 180 CD miles NNS northwest RB of IN the DT LaRonde NP mine NN . SENT The DT Eagle NP Mine NP and CC Telbel NP Mine NP are VBP held VVN under IN two CD adjoining JJ provincial JJ mining NN leases NNS , , totalling VVG approximately RB 911 CD acres NNS . SENT Dismantling VVG of IN the DT Eagle NP Mine NP and CC Telbel NP Mine NP facilities NNS was VBD completed VVN in IN 2000 CD . SENT Mining NN and CC milling NN operations NNS at IN the DT Eagle NP and CC Telbel NP Mines NPS in IN Joutel NP ceased VVD in IN December NP 1993 CD and CC the DT Company NN began VVD the DT restoration NN of IN the DT Joutel NP mining NN and CC milling NN site NN in IN 1998 CD . SENT The DT carrying VVG value NN of IN the DT Joutel NP mine NN site NN was VBD written VVN down RB to TO nil NN in IN 1997 CD . SENT During IN 1996 CD , , the DT Company NN submitted VVD a DT mine JJ closure NN plan NN for IN the DT Joutel NP Project NP to TO the DT Minister NP of IN Natural NP Resources NPS in IN Quebec NP . SENT Based VVN on IN this DT closure NN plan NN , , the DT estimated JJ current JJ reclamation NN cost NN is VBZ 0 CD . SENT 3 CD million CD . SENT Expenditures NNS on IN reclamation NN at IN the DT Joutel NP Project NP under IN this DT closure NN plan NN were VBD 0 CD . SENT 1 CD million CD in IN 2004 CD and CC 0 CD . SENT 1 CD million CD in IN 2003 CD . SENT As IN of IN December NP 31 CD , , 2004 CD , , the DT Company's NP reclamation NN provision NN for IN the DT Joutel NP Project NP was VBD 0 CD . SENT 7 CD million CD . SENT All DT decommissioning VVG and CC rehabilitation NN of IN the DT Joutel NP property NN has VHZ been VBN completed VVN except IN for IN re NN vegetation NN of IN the DT tailings NN area NN . SENT In IN 2002 CD , , the DT Company NN submitted VVD a DT modelling VVG study NN on IN the DT long JJ term NN acid NN drainage NN potential NN of IN tailings NN area NN to TO the DT Ministry NP of IN Natural NP Resources NPS in IN Quebec NP in IN support NN of IN a DT closure NN plan NN to TO revegetate VV the DT tailings NN pond NN . SENT The DT Company NN is VBZ currently RB monitoring VVG the DT site NN and CC will MD repeat VV the DT modelling VVG exercise NN in IN 2005 CD to TO validate VV it PP against IN actual JJ water NN conditions NNS in IN the DT tailings NN . SENT This DT new JJ modelling VVG study NN will MD be VB submitted VVN to TO the DT Ministry NP of IN Natural NP Resources NPS and CC contouring VVG and CC re NN vegetation NN of IN the DT tailings NN area NN will MD commence VV after IN receiving VVG a DT favourable JJ ruling NN from IN the DT Ministry NP of IN Natural NP Resources NPS regarding VVG the DT closure NN plan NN . SENT Vezza NP Project NP The NP Company's NP Vezza NP Project NP is VBZ located VVN approximately RB 38 CD miles NNS northwest RB of IN the DT Joutel NP properties NNS and CC consists VVZ of IN the DT Vezza NP deposit NN located VVN in IN Vezza NP Township NP , , Quebec NP and CC a DT number NN of IN properties NNS in IN the DT Vezza NP , , Noyon NP and CC Cavalier NP Townships NNS in IN Quebec NP . SENT The DT Vezza NP Project NP currently RB comprises VVZ ten CD exploration NN properties NNS held VVN under IN 578 CD mining NN claims NNS , , totalling VVG approximately RB 22 CD , , 152 CD acres NNS . SENT The DT Company NN owns VVZ 100 CD of IN the DT Vezza NP deposit NN free JJ of IN royalty NN interests NNS . SENT The DT carrying VVG value NN of IN the DT Vezza NP Project NP was VBD written VVN down RB to TO nil NN in IN 1997 CD . SENT The DT Company NN has VHZ submitted VVN a DT closure NN plan NN to TO the DT Ministry NP of IN Environment NP in IN Quebec NP which WDT was VBD accepted VVN . SENT Rehabilitation NP will MD be VB carried VVN out RP after IN the DT Company NN has VHZ made VVN a DT decision NN on IN the DT future JJ exploration NN potential NN of IN the DT property NN . SENT Expenditures NNS under IN the DT closure NN plans NNS were VBD 0 CD . SENT 1 CD million CD in IN 2004 CD and CC are VBP expected VVN to TO be VB 0 CD . SENT 1 CD million CD in IN 2005 CD . SENT As IN at IN December NP 31 CD , , 2004 CD , , the DT Company's NP reclamation NN provision NN for IN the DT Vezza NP Project NP was VBD nil NN . SENT Agnico NP Eagle's NP Exploration NP Activities NNS Agnico NP Eagle NP continued VVD to TO actively RB explore VV in IN Quebec NP , , Newfoundland NP , , Nevada NP and CC Idaho NP . SENT At IN the DT end NN of IN December NP 2004 CD , , the DT land NN holdings NNS of IN Agnico NP Eagle NP consisted VVD of IN 3 CD , , 162 CD mineral NN titles NNS claims NNS , , mining NN leases NNS , , etc FW . SENT covering VVG 139 CD , , 123 CD acres NNS . SENT During IN 2003 CD and CC 2004 CD , , Agnico NP Eagle's NP exploration NN activities NNS were VBD focused VVN mainly RB on IN the DT Lapa NP property NN and CC acquiring VVG additional JJ property NN along IN the DT Cortez NP sector NN of IN the DT Battle NP Mountain NP trend NN in IN Nevada NP . SENT Riddarhyttan NP In IN May NP 2004 CD , , the DT Company NN acquired VVD 12 CD . SENT 7 CD million CD common JJ shares NNS in IN Riddarhyttan NP from IN its PP$ then RB largest JJS shareholder NN , , Swedish JJ private JJ company NN , , Dunross NP Co NP . SENT AB NP , , bringing VVG its PP$ total JJ ownership NN interest NN in IN Riddarhyttan NP to TO 13 CD . SENT 8 CD . SENT Together RB with IN an DT additional JJ 800 CD , , 000 CD shares NNS of IN Riddarhyttan NP purchased VVD by IN the DT Company NN in IN the DT second JJ quarter NN of IN the DT year NN and CC transaction NN costs NNS , , total JJ cash NN consideration NN of IN 11 CD . SENT 8 CD million CD was VBD paid VVN by IN the DT Company NN . SENT In IN late JJ December NP 2004 CD , , Riddarhyttan NP concluded VVD a DT rights NNS offering NN for IN 7 CD . SENT 5 CD million CD shares NNS pursuant JJ to TO which WDT the DT Company NN raised VVD its PP$ ownership NN level NN in IN Riddarhyttan NP to TO 14 CD . SENT 0 CD of IN the DT outstanding JJ shares NNS . SENT In IN connection NN with IN this DT acquisition NN , , two CD representatives NNS of IN the DT Company NN were VBD elected VVN to TO Riddarhyttan's NP board NN of IN directors NNS . SENT 30 CD Riddarhyttan NP is VBZ a DT precious JJ and CC base JJ metals NNS exploration NN and CC development NN company NN with IN a DT focus NN on IN the DT Nordic JJ region NN of IN Europe NP . SENT Its PP$ shares NNS are VBP listed VVN on IN the DT Stockholm NP Stock NP Exchange NP under IN the DT symbol NN RHYT NP . SENT Riddarhyttan NP is VBZ the DT 100 CD owner NN of IN the DT Suurikuusikko NP gold NN deposit NN , , located VVN approximately RB 550 CD miles NNS north RB of IN Helsinki NP near IN the DT town NN of IN Kittil NP in IN Finnish JJ Lapland NN . SENT Riddarhyttan's NP property NN position NN in IN the DT Suurikuusikko NP area NN consists VVZ of IN 22 CD contiguous JJ claims NNS approximately RB 4 CD , , 261 CD acres NNS with IN similar JJ Precambrian JJ greenstone NN belt NN geology NN and CC topography NN to TO the DT Company's NP land NN package NN in IN the DT Abitibi NP region NN of IN Quebec NP . SENT In IN March NP 2005 CD , , Riddarhyttan NP reported VVD an DT indicated JJ mineral NN resource NN at IN Suurikuusikko NP , , made VVD up RP of IN several JJ zones NNS that WDT occur VVP over IN a DT 2 CD . SENT 5 CD mile NN structure NN , , of IN 10 CD . SENT 6 CD million CD tons NNS grading VVG 0 CD . SENT 16 CD ounces NNS of IN gold NN per IN ton NN and CC an DT additional JJ inferred VVN gold NN resource NN , , consisting VVG of IN 8 CD . SENT 4 CD million CD tons NNS grading VVG 0 CD . SENT 13 CD ounces NNS of IN gold NN per IN ton NN . SENT The DT mineral NN resource NN estimate NN for IN Suurikuusikko NP was VBD prepared VVN for IN Riddarhyttan NP in IN accordance NN with IN the DT Australasian NP Code NP for IN Reporting NP Mineral NP Resources NPS and CC Ore NP Reserves NPS , , September NP 1999 CD the DT JORC NP Code NP . SENT Mineral NN resources NNS that WDT have VHP been VBN disclosed VVN herein RB were VBD estimated VVN using VVG a DT minimum JJ gold NN grade NN cut VVD off RP of IN approximately RB 0 CD . SENT 058 CD ounces NNS of IN gold NN per IN ton NN . SENT Mineral NN resources NNS estimates NNS prepared VVN under IN reporting VVG codes NNS other JJ than IN National NP Instrument NP 43 CD 101 CD should MD not RB be VB relied VVN upon RP as IN they PP may MD not RB conform VV to TO National NP Instrument NP 43 CD 101 CD standards NNS and CC definitions NNS . SENT However RB , , reserve NN and CC resource NN categories NNS in IN the DT JORC NP Code NP are VBP substantially RB similar JJ to TO the DT corresponding JJ categories NNS of IN mineral NN reserves NNS and CC resources NNS required VVN under IN National NP Instrument NP 43 CD 101 CD . SENT To TO the DT best JJS of IN the DT Company's NP knowledge NN , , the DT Riddarhyttan NP estimate NN is VBZ relevant JJ and CC reliable JJ . SENT Pinos NP Altos NP In IN March NP 2005 CD , , the DT Company NN entered VVN into IN an DT option NN agreement NN with IN Penoles NP , , a DT Mexican JJ public JJ mining NN company NN , , to TO acquire VV the DT Pinos NP Altos NP project NN in IN northern JJ Mexico NP . SENT The DT Pinos NP Altos NP project NN is VBZ located VVN on IN a DT 27 CD , , 000 CD acre NN property NN in IN the DT Sierra NP Madre NP gold NN belt NN , , 170 CD miles NNS west RB of IN the DT city NN of IN Chihuahua NP in IN northern JJ Mexico NP . SENT Under IN the DT terms NNS of IN the DT option NN agreement NN , , the DT Company NN will MD spend VV 2 CD . SENT 8 CD million CD on IN a DT 55 CD , , 000 CD foot NN diamond NN drilling NN program NN over IN the DT five CD months NNS after IN executing VVG the DT option NN agreement NN subject JJ to TO extension NN in IN certain JJ events NNS . SENT After IN the DT completion NN of IN the DT five CD month NN drilling NN program NN , , the DT Company NN will MD have VH a DT two CD month NN period NN in IN which WDT to TO acquire VV Penoles NP 100 CD interest NN in IN the DT project NN . SENT If IN the DT Company NN exercises VVZ its PP$ option NN to TO purchase VV the DT Pinos NP Altos NP project NN , , the DT purchase NN price NN will MD be VB approximately RB 65 CD million CD , , which WDT will MD be VB comprised VVN of IN 39 CD million CD in IN cash NN and CC 1 CD , , 809 CD , , 350 CD shares NNS of IN the DT Company NN . SENT The DT Company NN has VHZ no DT other JJ commitments NNS or CC agreements NNS with IN respect NN to TO any DT other JJ acquisitions NNS . SENT The DT Pinos NP Altos NP property NN is VBZ made VVN up RP of IN 3 CD blocks NNS , , the DT Parre NP a DT Concessions NNS 19 CD concessions NNS , , 14 CD , , 928 CD acres NNS , , the DT Madro NP o NN Concessions NNS 16 CD concessions NNS , , 8 CD , , 199 CD acres NNS and CC the DT Pinos NP Altos NP Concession NN 1 CD concession NN , , 4 CD , , 129 CD acres NNS . SENT The DT Madro NP o NN Concessions NNS which WDT cover VVP approximately RB 64 CD of IN the DT current JJ mineral NN resource NN are VBP subject JJ to TO Net JJ Smelter NN Royalty NP of IN 3 CD . SENT 5 CD payable JJ to TO Minerales NP El NP Madro NP o NN S NP . SENT A DT . SENT de NP C NP . SENT V NN . SENT The DT Pinos NP Altos NP Concession NN which WDT covers VVZ approximately RB 36 CD of IN the DT current JJ mineral NN resource NN is VBZ subject JJ to TO a DT 2 CD . SENT 5 CD Net JJ Smelter NN Return NN royalty NN payable JJ to TO the DT Consejo NP de NP Recursos NP Minerales NP , , a DT Mexican NP Federal NP Government NP agency NN . SENT after IN 20 CD years NNS , , this DT portion NN of IN the DT property NN will MD also RB be VB subject JJ to TO a DT 3 CD . SENT 5 CD Net JJ Smelter NN Return NN Royalty NP payable JJ to TO Minerales NP El NP Madro NP o NN S NP . SENT A DT . SENT de NP C NP . SENT V NN . SENT Beginning VVG on IN May NP 18 CD , , 2006 CD , , advance NN royalty NN payments NNS of IN 0 CD . SENT 142 CD million CD are VBP payable JJ to TO Minerales NP El NP Madro NP o NN S NP . SENT A DT . SENT de NP C NP . SENT V NN . SENT The DT surface NN rights NNS for IN approximately RB 1 CD , , 000 CD acres NNS have VHP been VBN secured VVN for IN mine NN construction NN and CC installations NNS at IN Pinos NP Altos NP . SENT The DT property NN is VBZ also RB approximately RB 60 CD miles NNS from IN a DT major JJ electric JJ power NN terminus NN and CC within IN 6 CD miles NNS of IN a DT proposed VVN extension NN of IN the DT grid NN . SENT Pe NN oles NP acquired VVD the DT property NN in IN 1995 CD and CC drilling VVG to TO date NN has VHZ outlined VVN an DT indicated JJ mineral NN resource NN of IN 4 CD . SENT 4 CD million CD tons NNS with IN a DT grade NN of IN 0 CD . SENT 18 CD ounces NNS of IN gold NN per IN ton NN and CC 3 CD . SENT 82 CD ounces NNS of IN silver NN per IN ton NN . SENT In IN addition NN , , the DT property NN has VHZ an DT inferred VVN mineral NN resource NN of IN 2 CD . SENT 5 CD million CD tons NNS grading VVG 0 CD . SENT 18 CD ounces NNS of IN gold NN per IN ton NN and CC 3 CD . SENT 41 CD ounces NNS of IN silver NN per IN ton NN . SENT Over IN 90 CD of IN the DT Pinos NP Altos NP mineral NN resource NN is VBZ located VVN in IN the DT Santo NP Nino NN vein NN , , along IN a DT regional JJ fault NN zone NN that WDT holds VVZ a DT number NN of IN other JJ known VVN deposits NNS in IN the DT area NN . SENT This DT Santo NP Nino NP vein NN zone NN has VHZ thicknesses NNS of IN up RB to TO 150 CD feet NNS over IN a DT length NN of IN 1 CD . SENT 2 CD miles NNS and CC a DT vertical JJ extent NN of IN at IN least JJS 1 CD , , 800 CD feet NNS . SENT It PP remains VVZ open JJ to TO the DT west NN and CC at IN depth NN . SENT Pe NN oles NP work NN to TO date NN has VHZ also RB included VVN metallurgical JJ testing NN and CC initial JJ work NN on IN the DT permitting VVG for IN a DT potential JJ mining NN operation NN . SENT The DT mineral NN resource NN estimate NN by IN Pe NN oles NP was VBD completed VVN in IN June NP 2003 CD and CC was VBD reviewed VVN by IN the DT Company NN and CC determined VVN to TO conform VV with IN the DT standards NNS of IN National NP Instrument NP 43 CD 101 CD . SENT The DT data NNS disclosed VVD , , including VVG the DT sampling NN , , analytical JJ and CC test NN data NNS underlying VVG the DT mineral NN resource NN estimate NN , , has VHZ been VBN verified VVN . SENT The DT key JJ 31 CD assumptions NNS and CC parameters NNS used VVN in IN the DT estimate NN are VBP a DT gold JJ price NN of IN 300 CD per IN ounce NN , , a DT silver JJ price NN of IN 4 CD . SENT 75 CD per IN ounce NN , , a DT 0 CD . SENT 10 CD ounce NN per IN ton NN gold NN grade NN cut VVD off RP , , and CC metallurgical JJ recoveries NNS of IN 92 CD . SENT 39 CD for IN gold NN and CC 47 CD . SENT 83 CD for IN silver NN . SENT Gold NN assays NNS were VBD cut VVN to TO 0 CD . SENT 89 CD ounces NNS per IN ton NN while IN silver NN assays NNS were VBD cut VVN to TO 19 CD . SENT 25 CD ounces NNS per IN ton NN . SENT Although IN more JJR recent JJ exploration NN information NN has VHZ been VBN collected VVN in IN the DT area NN where WRB the DT mineral NN resource NN estimate NN was VBD completed VVN , , it PP is VBZ the DT opinion NN of IN the DT qualified JJ person NN that IN including VVG this DT information NN would MD not RB materially RB change VV the DT estimate NN . SENT The DT Company NN believes VVZ that IN the DT estimate NN of IN mineral NN resources NNS at IN Pinos NP Altos NP is VBZ not RB likely JJ to TO be VB materially RB affected VVN by IN any DT known VVN environmental JJ , , permitting VVG , , legal JJ , , title NN , , taxation NN , , socio NN political JJ , , marketing NN or CC other JJ relevant JJ issues NNS . SENT In IN Mexico NP , , mineral NN rights NNS are VBP granted VVN as IN exploration NN and CC exploitation NN concessions NNS which WDT require VVP that IN a DT certain JJ minor JJ mineral NN exploration NN work NN be VB completed VVN and CC submitted VVN and CC that IN a DT minor JJ amount NN of IN taxes NNS are VBP paid VVN annually RB . SENT Legal NP and CC Regulatory NP Proceedings NNS As IN disclosed VVN by IN the DT Company NN on IN March NP 18 CD , , 2004 CD , , the DT staff NN of IN the DT Ontario NP Securities NPS Commission NP had VHD been VBN investigating VVG the DT Company NN in IN relation NN to TO the DT timing NN and CC content NN of IN the DT Company's NP disclosure NN concerning VVG a DT rock NN fall NN that WDT occurred VVD at IN the DT LaRonde NP Mine NP in IN the DT first JJ quarter NN of IN 2003 CD . SENT The DT Company NN is VBZ currently RB in IN discussions NNS with IN Ontario NP Securities NPS Commission NP staff NN concerning VVG this DT matter NN and CC the DT timing NN of IN the DT Company's NP disclosure NN of IN a DT production NN shortfall NN prior RB to TO its PP$ earnings NNS announcement NN in IN the DT third JJ quarter NN of IN 2003 CD . SENT The DT Company NN believes VVZ it PP is VBZ unlikely JJ that IN there EX will MD be VB any DT material JJ financial JJ impact NN resulting VVG from IN this DT matter NN . SENT In IN addition NN , , on IN November NP 4 CD , , 2004 CD , , the DT Company NN was VBD advised VVN that IN Ontario NP Securities NPS Commission NP staff NN were VBD investigating VVG an DT officer NN of IN the DT Company NN for IN potential JJ insider NN trading NN violations NNS . SENT On IN November NP 5 CD , , 2004 CD , , the DT Company NN suspended VVD the DT officer NN with IN pay NN pending VVG the DT outcome NN of IN an DT internal JJ investigation NN into IN the DT allegations NNS . SENT On IN November NP 8 CD , , 2004 CD the DT Board NN of IN Directors NNS met VVN and CC appointed VVN an DT independent JJ director NN to TO conduct VV , , with IN the DT assistance NN of IN the DT Company's NP external JJ counsel NN , , an DT investigation NN into IN the DT matter NN and CC to TO report VV back RB to TO the DT Board NP . SENT The DT Board NP of IN Directors NPS met VVD again RB on IN November NP 15 CD , , December NP 1 CD , , December NP 3 CD and CC December NP 7 CD , , 2004 CD in IN connection NN with IN the DT investigation NN . SENT On IN December NP 7 CD , , 2004 CD , , the DT Company NN terminated VVD the DT officer NN . SENT The DT Company NN is VBZ cooperating VVG with IN the DT Ontario NP Securities NPS Commission NP in IN its PP$ investigation NN . SENT ITEM NN 5 CD . SENT OPERATING NN AND CC FINANCIAL NP REVIEW NP AND CC PROSPECTS NNS Business NN Overview NN and CC 2004 CD Highlights NNS The DT Company NN is VBZ a DT leading JJ , , intermediate JJ sized VVD , , gold JJ producer NN with IN roots NNS that WDT go VVP back RB more JJR than IN 30 CD years NNS . SENT Today NN it PP operates VVZ the DT LaRonde NP gold NN mine NN in IN northwestern JJ Quebec NP , , Canada NP , , one CD of IN the DT world's JJ most JJS mining NN friendly JJ and CC political JJ risk NN free JJ areas NNS . SENT The DT Company's NP strategy NN is VBZ to TO build VV a DT multi NNS mine NN platform NN from IN the DT foundation NN of IN its PP$ LaRonde NP Mine NP . SENT In IN 2004 CD , , Agnico NP Eagle NP continued VVD to TO work VV towards IN that DT goal NN by IN commencing VVG development NN at IN the DT Lapa NP property NN , , located VVN seven CD miles NNS east JJ of IN LaRonde NP . SENT At IN the DT Goldex NP property NN , , 35 CD miles NNS east JJ of IN LaRonde NP , , the DT Company NN continued VVD the DT progression NN of IN its PP$ regional JJ strategy NN as IN a DT bulk JJ sampling NN program NN completed VVN in IN early JJ 2005 CD returned VVD a DT grade NN that WDT was VBD 10 CD higher JJR than IN previously RB modeled VVN . SENT The DT results NNS of IN this DT program NN will MD be VB incorporated VVN into IN a DT new JJ mine NN plan NN which WDT will MD be VB completed VVN in IN 2005 CD . SENT Management NP currently RB expects VVZ Lapa NP and CC Goldex NP to TO begin VV contributing VVG to TO the DT Company's NP production NN in IN late JJ 2008 CD . SENT With IN proven JJ and CC probable JJ reserves NNS of IN 5 CD . SENT 1 CD million CD ounces NNS of IN gold NN , , LaRonde NP is VBZ now RB the DT largest JJS gold NN deposit NN in IN Canada NP . SENT With IN the DT development NN at IN Lapa NP and CC Goldex NP in IN 2004 CD and CC 2005 CD , , Agnico NP Eagle NP is VBZ on IN its PP$ way NN to TO achieving VVG its PP$ strategic JJ goal NN . SENT However RB , , Agnico NP Eagle's NP vision NN extends VVZ beyond IN northwestern JJ Quebec NP . SENT The DT Company NN is VBZ actively RB pursuing VVG opportunities NNS in IN the DT United NP States NPS and CC northern JJ Mexico NP and CC has VHZ a DT 14 CD equity NN position NN in IN Riddarhyttan NP Resources NPS AB NP which WDT owns VVZ the DT Suurikuusikko NP gold NN deposit NN in IN Finland NP . SENT In IN addition NN , , in IN the DT first JJ quarter NN of IN 2005 CD , , the DT Company NN acquired VVD an DT option NN on IN the DT Pinos NP Altos NP project NN in IN northern JJ Mexico NP . SENT Agnico NP Eagle NP continues VVZ to TO focus VV on IN mining NN friendly JJ , , low JJ political JJ risk NN areas NNS where WRB the DT experience NN obtained VVN in IN northwestern JJ Quebec NN can MD be VB used VVN to TO build VV or CC acquire VV new JJ mines NNS . SENT Wherever WRB this DT strategy NN leads VVZ , , Agnico NP Eagle NP will MD continue VV to TO leverage VV off RP the DT experience NN gained VVD at IN LaRonde NP . SENT Agnico NP Eagle NP has VHZ created VVN a DT dominant JJ land NN position NN around IN its PP$ LaRonde NP Mine NP with IN properties NNS at IN different JJ stages NNS of IN development NN running VVG for IN almost RB 45 CD kilometers NNS along IN the DT gold NN rich JJ Cadillac NP Bousquet NP belt NN . SENT This DT strategic JJ 32 CD concentration NN , , combined VVN with IN decades NNS of IN experience NN in IN the DT region NN , , provides VVZ Agnico NP Eagle NP with IN competitive JJ advantages NNS including VVG . SENT operating NN and CC development NN synergies NNS , , enhanced JJ opportunities NNS for IN exploration NN and CC economies NNS of IN scale NN and CC serving VVG as IN a DT base NN for IN applying VVG its PP$ experience NN to TO any DT new JJ ventures NNS . SENT This DT greatly RB assists VVZ in IN creating VVG value NN for IN shareholders NNS . SENT Agnico NP Eagle's NP production NN is VBZ low JJ cost NN , , which WDT protects VVZ shareholders NNS during IN periods NNS of IN weaker JJR gold NN prices NNS . SENT The DT Company NN is VBZ positioned VVN to TO benefit VV from IN a DT stronger JJR gold NN price NN and CC , , throughout IN its PP$ 30 CD year NN history NN , , it PP has VHZ never RB sold VVN away RP the DT upside NN for IN its PP$ gold JJ production NN . SENT The DT Company NN earns VVZ the DT majority NN of IN its PP$ revenue NN and CC generates VVZ cash NN flow NN from IN the DT production NN and CC sale NN of IN gold NN in IN both DT dor NN and CC concentrate VV form NN . SENT The DT remainder NN of IN revenue NN and CC cash NN flow NN is VBZ generated VVN by IN the DT production NN and CC sale NN of IN byproduct NN metals NNS , , namely RB silver NN , , zinc NN and CC copper NN . SENT In IN 2004 CD , , Agnico NP Eagle NP increased VVD gold JJ production NN to TO a DT record NN level NN . SENT This DT was VBD a DT record JJ year NN on IN numerous JJ fronts NNS . SENT Record JJ gold NN production NN of IN 271 CD , , 567 CD ounces NNS . SENT Record NN mined VVD and CC processed VVD tonnage NN at IN about IN 3 CD . SENT 0 CD million CD tons NNS . SENT Record JJ low JJ full JJ year NN and CC fourth JJ quarter NN total JJ cash NN costs NNS per IN ounce NN of IN 56 CD and CC 13 CD , , respectively RB . SENT Record NN earnings NNS and CC cash NN flow NN from IN operating VVG activities NNS at IN US NP 47 CD . SENT 9 CD million CD and CC US NP 49 CD . SENT 5 CD million CD , , respectively RB . SENT and CC Record NP proven JJ and CC probable JJ gold NN reserves NNS of IN 7 CD . SENT 9 CD million CD ounces NNS . SENT Throughout IN this DT section NN , , the DT terms NNS total VVP cash NN costs NNS per IN ounce NN and CC minesite NN costs NNS per IN ton NN are VBP used VVN . SENT Both CC of IN these DT measures NNS are VBP non JJ GAAP NP measures NNS and CC are VBP discussed VVN in IN more JJR detail NN , , including VVG management's NNS use VVP of IN the DT measures NNS and CC their PP$ limitations NNS and CC the DT reconciliation NN of IN such JJ measures NNS to TO GAAP NP measures NNS , , on IN pages NNS 37 CD to TO 38 CD . SENT Key NP Performance NP Drivers NP The DT key JJ drivers NNS of IN financial JJ performance NN for IN Agnico NP Eagle NP are VBP . SENT the DT spot NN price NN of IN gold NN . SENT spot NN prices NNS of IN silver NN , , zinc NN and CC copper NN . SENT the DT C NP US NP exchange NN rate NN . SENT production NN volumes NNS . SENT and CC production NN costs NNS . SENT Agnico NP Eagle NP has VHZ never RB sold VVN gold NN forward RB because IN of IN the DT belief NN that IN low JJ cost NN production NN is VBZ the DT best JJS protection NN against IN decreasing VVG gold JJ prices NNS . SENT As IN a DT result NN , , the DT Company NN is VBZ positioned VVN to TO benefit VV from IN rising VVG gold JJ prices NNS . SENT The DT sale NN of IN byproduct NN silver NN , , zinc NN and CC copper NN is VBZ important JJ to TO both DT revenue NN and CC total JJ cash NN costs NNS per IN ounce NN . SENT Therefore RB , , hedging VVG strategies NNS are VBP implemented VVN occasionally RB to TO mitigate VV the DT effects NNS of IN fluctuating VVG prices NNS of IN byproduct NN metals NNS . SENT The DT C NP US NP exchange NN rate NN is VBZ also RB an DT important JJ financial JJ driver NN as IN practically RB all DT operating NN costs NNS are VBP paid VVN in IN Canadian JJ dollars NNS while IN revenue NN is VBZ generated VVN in IN US NP dollars NNS . SENT As IN such JJ , , hedging VVG strategies NNS are VBP also RB used VVN to TO mitigate VV the DT impact NN of IN fluctuating VVG exchange NN rates NNS on IN total JJ cash NN costs NNS per IN ounce NN . SENT Markets NNS The DT gold NN price NN based VVN on IN Scotia NP Mocatta NP Metal NP Matters VVZ reports NNS continued VVN to TO rise VV in IN 2004 CD reaching VVG the DT highest JJS intraday NN level NN since IN the DT late JJ 1980 CD s PP at IN 457 CD oz NP in IN December NP 2004 CD . SENT Gold NN prices NNS London NP PM NP fixes NNS during IN the DT year NN ranged VVD from IN a DT low NN of IN 375 CD oz NP to TO a DT high NN of IN 454 CD oz NP finishing VVG the DT year NN at IN 437 CD oz NP . SENT 33 CD Gold NP PM NP Fix NP US NP Oz NP Many JJ factors NNS contributed VVD to TO the DT increase NN in IN gold JJ prices NNS throughout IN 2004 CD . SENT The DT most RBS influential JJ factor NN was VBD continued VVN weakness NN in IN the DT US NP dollar NN largely RB caused VVN by IN growing VVG concern NN about IN the DT United NP States NPS trade NN and CC budget NN deficits NNS . SENT A DT stabilizing VVG global JJ economy NN led VVN to TO increased JJ gold NN demand NN for IN jewellery NN in IN 2004 CD after IN three CD years NNS of IN declines NNS . SENT Investment NN demand NN , , sparked VVN by IN the DT launch NN of IN additional JJ gold NN Exchange NP Traded VVD Funds NP ETFs NP , , has VHZ also RB helped VVN push NN prices NNS higher RBR . SENT ETFs NNS give VVP fund NN managers NNS the DT opportunity NN to TO buy VV exposure NN to TO gold JJ bullion NN without IN owning VVG physical JJ metal NN . SENT Producer NN de NP hedging NN has VHZ also RB contributed VVN to TO improved JJ demand NN . SENT As IN physical JJ and CC investment NN demand NN increased VVN throughout IN 2004 CD , , declining VVG mine PP supply VV further RBR fueled VVN price NN increases NNS . SENT Global JJ mine NN production NN was VBD negatively RB impacted VVN in IN 2004 CD as IN South NP African NP production NN decreased VVD steadily RB throughout IN the DT year NN as IN a DT result NN of IN the DT rapid JJ appreciation NN of IN the DT rand NN against IN the DT US NP dollar NN . SENT At IN the DT beginning NN of IN 2004 CD , , the DT silver NN price NN based VVN on IN Scotia NP Mocatta NP Metal NP Matters VVZ reports NNS continued VVD a DT strong JJ rally NN which WDT began VVD in IN November NP 2003 CD . SENT The DT rally NN took VVD silver NN to TO a DT high NN of IN 8 CD . SENT 44 CD oz NP in IN April NP 2004 CD . SENT The DT sharp JJ appreciation NN in IN silver NN prices NNS caused VVD physical JJ demand NN to TO decrease VV and CC thus RB prices NNS retreated VVD to TO 5 CD . SENT 43 CD oz NP during IN April NP and CC May NP of IN 2004 CD . SENT Silver NN prices NNS then RB appreciated VVN gradually RB from IN these DT lows NNS and CC prices NNS reached VVD 8 CD . SENT 17 CD oz NP in IN December NP before IN retreating VVG again RB . SENT Despite IN the DT rapid JJ price NN appreciation NN , , industrial JJ demand NN still RB showed VVD modest JJ growth NN in IN 2004 CD as IN jewellery NN and CC silverware NN fabricators NNS became VVD accustomed VVN to TO the DT higher JJR prices NNS . SENT Silver's NNS use VVP in IN photography NN has VHZ been VBN declining VVG since IN 1999 CD and CC is VBZ expected VVN to TO continue VV declining VVG as IN digital JJ photography NN becomes VVZ more RBR widespread JJ . SENT Investment NN demand NN was VBD also RB a DT factor NN leading VVG to TO the DT price NN changes NNS in IN 2004 CD as IN the DT commodity NN became VVD more RBR popular JJ with IN funds NNS as IN a DT means VVZ to TO offset VV continued JJ US NP dollar NN weakness NN . SENT Silver NP PM NP Fix NP US NP Oz NP 34 CD The DT year NN 2004 CD was VBD a DT banner NN year NN for IN base NN metals NNS in IN general NN with IN increased JJ demand NN , , stemming VVG from IN the DT rapid JJ economic JJ growth NN in IN China NP , , stimulating VVG a DT worldwide JJ price NN rise NN . SENT Continued JJ weakness NN in IN the DT US NP dollar NN , , the DT primary JJ currency NN of IN quoted VVN market NN prices NNS , , also RB contributed VVD to TO the DT increase NN in IN metal NN prices NNS . SENT Zinc NN and CC copper NN refined JJ metal NN prices NNS in IN US NP dollars NNS rose VVD over IN 25 CD and CC 60 CD , , respectively RB , , as IN the DT growth NN in IN global JJ demand NN for IN these DT metals NNS outpaced VVD the DT growth NN in IN global JJ supply NN . SENT Zinc NN concentrate NN spot NN treatment NN charges NNS fell VVD marginally RB over IN the DT year NN as IN smelter NN shortages NNS developed VVD , , but CC spot NN copper NN treatment NN charges NNS rose VVD dramatically RB as IN supplies NNS from IN mine NN re IN openings NNS and CC new JJ production NN overtook VVD smelter NN demand NN . SENT Refined JJ copper NN and CC zinc NN both CC have VHP mainly RB industrial JJ usages NNS . SENT Copper NN is VBZ used VVN mainly RB in IN the DT electrical JJ and CC construction NN industry NN in IN the DT form NN of IN cable NN , , electrical JJ wire NN and CC pipes NNS for IN plumbing NN . SENT Zinc NN is VBZ mainly RB used VVN for IN galvanizing VVG to TO protect VV against IN corrosion NN to TO vehicles NNS , , machinery NN and CC building NN structures NNS . SENT Results NNS of IN Operations NP Revenues NNS from IN Mining NP Operations NP In IN 2004 CD , , revenue NN from IN mining NN operations NNS increased VVD 48 CD to TO 188 CD million CD from IN 127 CD million CD in IN 2003 CD . SENT The DT increased JJ revenue NN was VBD due JJ to TO both DT increased JJ production NN volumes NNS and CC increased VVN metal NN prices NNS . SENT In IN 2004 CD , , Agnico NP Eagle NP achieved VVD record JJ production NN of IN all DT metals NNS with IN gold JJ production NN up IN 15 CD to TO 271 CD , , 567 CD ounces NNS while IN byproduct NN silver NN , , zinc NN and CC copper NN production NN increased VVN by IN 44 CD , , 67 CD and CC 13 CD , , respectively RB . SENT The DT majority NN of IN the DT Company's NP revenue NN is VBZ derived VVN from IN precious JJ metal NN sales NNS . SENT In IN 2004 CD , , sales NNS of IN gold NN and CC silver NN accounted VVD for IN 75 CD of IN revenues NNS , , down RB from IN 84 CD and CC 88 CD in IN 2003 CD and CC 2002 CD , , respectively RB . SENT The DT decline NN in IN the DT percentage NN of IN revenues NNS from IN precious JJ metals NNS is VBZ largely RB due JJ to TO increased JJ revenues NNS from IN byproduct NN copper NN and CC zinc NN as IN a DT result NN of IN a DT sharp JJ increase NN in IN prices NNS for IN each DT metal NN . SENT Revenues NNS from IN mining NN operations NNS are VBP accounted VVN for IN net NN of IN related JJ smelting VVG , , refining NN , , transportation NN and CC other JJ charges NNS . SENT In IN 2005 CD , , Agnico NP Eagle NP anticipates VVZ precious JJ metal NN sales NNS to TO account VV for IN 78 CD of IN overall JJ revenue NN . SENT The DT table NN below RB summarizes VVZ net JJ revenue NN by IN metal NN . SENT 2004 CD 2003 CD 2002 CD Revenues NNS from IN mining NN operations NNS thousands NNS . SENT Gold NP 105 CD , , 528 CD 85 CD , , 566 CD 80 CD , , 177 CD Silver NN 35 CD , , 289 CD 20 CD , , 584 CD 14 CD , , 115 CD Zinc NN 33 CD , , 044 CD 14 CD , , 218 CD 14 CD , , 762 CD Copper NN 14 CD , , 188 CD 6 CD , , 452 CD 1 CD , , 027 CD 188 CD , , 049 CD 126 CD , , 820 CD 108 CD , , 027 CD Production NN . SENT Gold NN ounces NNS 271 CD , , 567 CD 236 CD , , 653 CD 260 CD , , 183 CD Silver NN 000 CD s PP ounces NNS 5 CD , , 699 CD 3 CD , , 953 CD 3 CD , , 084 CD Zinc NN 000 CD s PP pounds NNS 167 CD , , 282 CD 100 CD , , 337 CD 108 CD , , 060 CD Copper NN 000 CD s PP pounds NNS 22 CD , , 816 CD 20 CD , , 131 CD 8 CD , , 927 CD Revenue NN from IN gold NN sales NNS increased VVD 20 CD million CD , , or CC 23 CD , , in IN 2004 CD . SENT Approximately RB 49 CD of IN the DT 20 CD million CD increase NN was VBD due JJ to TO increased JJ production NN , , while IN 51 CD of IN the DT increase NN was VBD attributable JJ to TO increased JJ realized VVN prices NNS . SENT Realized VVN gold NN prices NNS increased VVD 14 CD in IN 2004 CD to TO 418 CD per IN ounce NN from IN 368 CD per IN ounce NN in IN 2003 CD . SENT Silver NN revenue NN increased VVD 15 CD million CD , , or CC 71 CD , , in IN 2004 CD . SENT Of IN the DT 15 CD million CD increase NN , , 46 CD was VBD due JJ to TO increased JJ production NN , , while IN 54 CD was VBD attributable JJ to TO increased JJ realized VVN prices NNS . SENT Realized VVN silver NN prices NNS increased VVD 35 CD in IN 2004 CD to TO 6 CD . SENT 84 CD per IN ounce NN from IN 5 CD . SENT 07 CD per IN ounce NN in IN 2003 CD . SENT Revenue NN from IN copper NN sales NNS increased VVD 8 CD million CD , , or CC 120 CD , , in IN 2004 CD . SENT Revenue NN from IN zinc NN sales NNS increased VVD 19 CD million CD , , or CC 132 CD , , in IN 2004 CD . SENT Both DT copper NN and CC zinc NN revenues NNS benefited VVN from IN increased JJ production NN and CC prices NNS but CC were VBD negatively RB impacted VVN by IN higher RBR smelting VVG , , refining NN and CC transportation NN charges NNS . SENT Higher RBR smelting VVG and CC refining VVG charges NNS were VBD mostly RB attributable JJ to TO the DT increased JJ production NN volumes NNS for IN both DT copper NN and CC zinc NN and CC to TO rising VVG treatment NN charges NNS for IN copper NN . SENT Increased VVN transportation NN charges NNS were VBD due JJ to TO higher JJR ocean NN freight NN for IN zinc NN and CC copper NN concentrate VVP shipments NNS as IN the DT growing VVG Asian JJ economies NNS continue VVP to TO put VV a DT strain NN on IN the DT marine JJ transportation NN system NN . SENT The DT impact NN of IN increasing VVG ocean NN freight NN costs NNS was VBD somewhat RB mitigated VVN throughout IN 2004 CD as IN 35 CD the DT Company NN began VVD delivering VVG zinc NN concentrate VV to TO Falconbridge's NP nearby JJ Kidd NP Creek NP smelter NN in IN Timmins NP , , Ontario NP . SENT Gold NN production NN increased VVD to TO 271 CD , , 567 CD ounces NNS in IN 2004 CD , , up RB 15 CD from IN 236 CD , , 653 CD ounces NNS in IN 2003 CD , , primarily RB due JJ to TO increased JJ tonnage NN from IN LaRonde's NP lower RBR , , gold NN copper NN rich JJ , , mining NN horizons NNS . SENT Production NN of IN all DT metals NNS increased VVN as IN LaRonde NP benefited VVD from IN operational JJ improvements NNS , , a DT more RBR focused JJ mining NN plan NN and CC increased JJ ore NN throughput NN . SENT For IN 2004 CD , , ore NN throughput NN increased VVD 22 CD to TO 3 CD . SENT 0 CD million CD tons NNS from IN 2 CD . SENT 4 CD million CD tons NNS in IN 2003 CD . SENT The DT increased JJ ore NN throughput NN was VBD a DT result NN of IN a DT new JJ mining NN plan NN , , which WDT was VBD designed VVN and CC implemented VVN at IN the DT end NN of IN 2003 CD to TO address VV the DT production NN difficulties NNS that WDT were VBD encountered VVN . SENT While IN LaRonde NP achieved VVD record JJ tonnages NNS for IN both DT ore NN mined VVN and CC milled VVN , , lower JJR than IN expected VVN gold NN grades NNS resulted VVN in IN gold JJ production NN below IN the DT Company's NP original JJ estimate NN of IN 300 CD , , 000 CD ounces NNS . SENT Higher JJR than IN expected VVN dilution NN on IN the DT lower JJR mining NN levels NNS was VBD the DT main JJ reason NN for IN the DT decreased VVN gold NN grade NN . SENT As IN a DT result NN , , the DT Company NN has VHZ adjusted VVN its PP$ reserves NNS and CC production NN forecasts NNS to TO take VV into IN account NN the DT increased JJ dilution NN . SENT The DT mining NN team NN at IN LaRonde NP continues VVZ to TO look VV for IN ways NNS to TO minimize VV this DT dilution NN effect NN . SENT Silver NN and CC zinc NN production NN increased VVD 44 CD and CC 67 CD , , respectively RB when WRB compared VVN to TO 2003 CD , , largely RB due JJ to TO higher JJR tonnage NN milled VVD . SENT Copper NN production NN increased VVD 13 CD as IN ore NN production NN from IN the DT lower JJR level NN mining NN areas NNS increased VVD . SENT As IN a DT result NN of IN implementing VVG a DT new JJ mining NN plan NN , , ore NN production NN from IN the DT lower JJR gold NN copper NN rich JJ levels NNS accounted VVD for IN 63 CD of IN the DT ore NN processed VVN through IN the DT mill NN , , up RB from IN 55 CD in IN 2003 CD . SENT Operational JJ improvements NNS and CC ore NN body NN optimization NN continued VVD throughout IN 2004 CD , , culminating VVG in IN record JJ quarterly JJ mill NN throughput NN of IN almost RB 800 CD , , 000 CD tons NNS or CC 8 CD , , 614 CD tons NNS per IN day NN in IN the DT fourth JJ quarter NN . SENT Fourth JJ quarter NN revenues NNS also RB increased VVD in IN 2004 CD compared VVN to TO 2003 CD due NN to TO the DT same JJ factors NNS which WDT affected VVD full JJ year NN revenues NNS . SENT Interest NN and CC Sundry JJ Income NN Interest NN and CC sundry JJ income NN consists VVZ of IN interest NN on IN cash NN balances NNS , , realized VVD gains NNS on IN the DT disposition NN of IN available JJ for IN sale NN securities NNS , , and CC amortization NN related VVN to TO gold JJ put NN option NN contracts NNS expiring VVG in IN the DT year NN . SENT Interest NN and CC sundry JJ income NN was VBD 0 CD . SENT 7 CD million CD in IN 2004 CD compared VVN to TO 2 CD . SENT 8 CD million CD in IN 2003 CD . SENT The DT 2 CD . SENT 1 CD million CD decrease NN was VBD due JJ almost RB entirely RB to TO decreased VVN gains NNS on IN the DT disposition NN of IN available JJ for IN sale NN securities NNS . SENT Interest NN on IN cash NN balances NNS and CC charges NNS relating VVG to TO amortization NN of IN gold JJ puts NNS purchased VVN in IN 1999 CD remained VVD relatively RB unchanged JJ over IN 2003 CD . SENT Production NN Costs NNS In IN 2004 CD , , production NN costs NNS decreased VVD 6 CD to TO 98 CD million CD from IN 105 CD million CD in IN 2003 CD . SENT The DT table NN below RB presents VVZ the DT components NNS of IN production NN costs NNS . SENT 2004 CD 2003 CD 2002 CD thousands NNS Definition NN Drilling NP 723 CD 511 CD 437 CD Stope NN Development NP 10 CD , , 768 CD 11 CD , , 832 CD 8 CD , , 625 CD Mining NP 20 CD , , 851 CD 17 CD , , 263 CD 10 CD , , 961 CD Underground JJ Services NP 32 CD , , 668 CD 25 CD , , 836 CD 16 CD , , 591 CD Milling NP 34 CD , , 466 CD 27 CD , , 478 CD 20 CD , , 603 CD Surface NP Services NP 2 CD , , 480 CD 2 CD , , 245 CD 1 CD , , 928 CD Administration NP 8 CD , , 005 CD 6 CD , , 472 CD 5 CD , , 368 CD Minesite NP production NN costs NNS 109 CD , , 961 CD 91 CD , , 637 CD 64 CD , , 513 CD El NP Coco NP Royalty NP 12 CD , , 888 CD 10 CD , , 764 CD Accretion NN expense NN and CC reclamation NN costs NNS 314 CD 519 CD 1 CD , , 301 CD Inventory NN adjustments NNS 7 CD , , 436 CD 368 CD 1 CD , , 071 CD Hedging NN losses NNS gains NNS 4 CD , , 671 CD 314 CD 1 CD , , 680 CD Production NN costs NNS per IN Consolidated NP Statement NN of IN Income NP Loss NN 98 CD , , 168 CD 104 CD , , 990 CD 75 CD , , 969 CD Minesite NP production NN costs NNS increased VVD to TO 110 CD million CD from IN 92 CD million CD in IN 2003 CD primarily RB as IN a DT result NN of IN the DT increased JJ tonnage NN mined VVN and CC milled VVN in IN 2004 CD and CC the DT continued JJ strength NN of IN the DT Canadian JJ dollar NN . SENT The DT average JJ 36 CD C NP US NP exchange NN rate NN for IN 2004 CD fell VVD to TO 1 CD . SENT 3017 CD from IN 1 CD . SENT 4018 CD in IN 2003 CD and CC this DT deterioration NN of IN the DT US NP dollar NN was VBD responsible JJ for IN 8 CD . SENT 1 CD million CD of IN the DT 18 CD . SENT 3 CD million CD increase NN in IN 2004 CD minesite NN production NN costs NNS . SENT Underground JJ services NNS costs NNS increased VVD due JJ to TO increased JJ preventative JJ maintenance NN to TO underground JJ fixed JJ and CC mobile JJ equipment NN resulting VVG from IN the DT increased JJ tonnage NN mined VVD . SENT At IN the DT beginning NN of IN 2004 CD , , two CD separate JJ industrial JJ accidents NNS claimed VVD the DT lives NNS of IN a DT contract NN miner NN and CC an DT employee NN . SENT As IN a DT result NN , , the DT Company NN conducted VVD a DT review NN of IN safety NN procedures NNS and CC made VVN modifications NNS to TO underground JJ equipment NN to TO further RBR ensure VV the DT safety NN of IN the DT Company's NP employees NNS that WDT also RB contributed VVD to TO the DT increased JJ minesite NN production NN costs NNS . SENT Increases NNS in IN the DT cost NN of IN raw JJ materials NNS such JJ as IN fuel NN and CC iron NN , , used VVN in IN the DT mining NN process NN , , and CC chemicals NNS , , used VVN in IN the DT milling NN process NN , , further RBR contributed VVN to TO the DT overall JJ increase NN in IN minesite NN production NN costs NNS . SENT The DT increased JJ mine NN production NN costs NNS were VBD offset VVN by IN a DT number NN of IN factors NNS which WDT helped VVD reduce VV total JJ production NN costs NNS . SENT In IN 2004 CD , , Agnico NP Eagle NP did VVD not RB incur VV royalty NN expenditures NNS on IN production NN attributable JJ to TO the DT El NP Coco NP property NN as IN this DT area NN of IN the DT mine NN was VBD essentially RB mined VVN out RP at IN the DT end NN of IN 2003 CD . SENT At IN the DT end NN of IN 2004 CD , , 7 CD . SENT 4 CD million CD of IN minesite NN production NN costs NNS were VBD allocated VVN to TO inventory NN which WDT was VBD a DT significant JJ increase NN from IN the DT small JJ inventory NN adjustments NNS made VVN in IN 2003 CD . SENT Due JJ to TO the DT large JJ increases NNS in IN production NN volumes NNS in IN 2004 CD , , zinc NN and CC copper NN concentrate NN inventories NNS were VBD much RB higher JJR at IN the DT end NN of IN 2004 CD compared VVN to TO 2003 CD . SENT This DT inventory NN adjustment NN reflects VVZ the DT production NN costs NNS associated VVN with IN unsold JJ concentrates VVZ at IN the DT end NN of IN the DT year NN . SENT Realized VVN hedging NN gains NNS also RB contributed VVD to TO the DT reduction NN in IN production NN costs NNS . SENT Hedge JJ gains NNS increased VVN over IN 2003 CD due JJ to TO the DT continued JJ deterioration NN of IN the DT US NP dollar NN . SENT Throughout IN 2004 CD , , the DT Company NN was VBD able JJ to TO benefit VV from IN its PP$ currency NN hedges NNS to TO sell VV US NP dollars NNS at IN a DT C NP US NP exchange NN rate NN of IN 1 CD . SENT 59 CD , , well RB above IN the DT average JJ C NP US NP exchange NN rate NN of IN 1 CD . SENT 30 CD . SENT These DT realized VVN hedging NN gains NNS were VBD somewhat RB offset VVN by IN negative JJ mark NN to TO market NN adjustments NNS on IN certain JJ foreign JJ exchange NN hedges NNS which WDT do VVP not RB qualify VV for IN hedge JJ accounting NN . SENT In IN 2003 CD , , operational JJ difficulties NNS and CC increased VVN royalty NN expenses NNS were VBD responsible JJ for IN the DT 27 CD million CD increase NN in IN minesite NN production NN costs NNS compared VVN to TO 2002 CD . SENT The DT rock NN fall NN in IN the DT first JJ quarter NN of IN 2003 CD and CC the DT production NN drilling NN challenges NNS encountered VVD in IN the DT third JJ quarter NN of IN 2003 CD caused VVN mining NN and CC underground JJ service NN costs NNS to TO increase VV over IN 2002 CD . SENT Furthermore RB , , of IN the DT 27 CD million CD increase NN over IN 2002 CD , , the DT strengthening JJ Canadian JJ dollar NN accounted VVD for IN 10 CD million CD . SENT In IN the DT fourth JJ quarter NN of IN 2004 CD , , 793 CD , , 000 CD tons NNS were VBD milled VVN at IN LaRonde NP , , which WDT represents VVZ a DT 26 CD increase NN over IN the DT same JJ quarter NN of IN 2003 CD . SENT Fourth JJ quarter NN gold NN production NN was VBD 2 CD lower JJR than IN 2003 CD due JJ to TO higher JJR than IN expected VVN dilution NN on IN the DT lower JJR level NN mining NN horizons NNS . SENT Total JJ cash NN costs NNS per IN ounce NN in IN the DT fourth JJ quarter NN were VBD 13 CD , , a DT 94 CD decrease NN over IN 2003 CD and CC a DT new JJ quarterly JJ record NN . SENT Increased JJ byproduct NN production NN and CC increasing VVG byproduct NN metal NN prices NNS were VBD the DT principal JJ factors NNS driving VVG total JJ cash NN costs NNS per IN ounce NN lower JJR in IN the DT quarter NN . SENT Minesite NN costs NNS per IN ton NN in IN the DT fourth JJ quarter NN were VBD C $ 48 CD per IN ton NN compared VVN to TO C $ 54 CD per IN ton NN in IN the DT prior JJ year NN . SENT The DT improvement NN in IN minesite NN costs NNS per IN ton NN was VBD due JJ to TO the DT 26 CD increase NN in IN mill NN throughput NN compared VVN to TO the DT fourth JJ quarter NN of IN 2003 CD . SENT In IN 2004 CD , , total JJ cash NN costs NNS to TO produce VV an DT ounce NN of IN gold NN decreased VVD to TO 56 CD from IN 269 CD in IN 2003 CD and CC 182 CD in IN 2002 CD . SENT Total JJ cash NN costs NNS are VBP comprised VVN of IN minesite NN costs NNS reduced VVN by IN net JJ silver NN , , zinc NN and CC copper NN revenue NN . SENT Total JJ cash NN costs NNS per IN ounce NN are VBP affected VVN by IN various JJ factors NNS such JJ as IN the DT number NN of IN gold NN ounces NNS produced VVD , , operating VVG costs NNS , , C NP US NP exchange NN rates NNS , , production NN royalties NNS and CC byproduct NN metal NN prices NNS . SENT The DT table NN below RB illustrates VVZ the DT variance NN in IN total JJ cash NN costs NNS per IN ounce NN attributable JJ to TO each DT of IN these DT factors NNS . SENT The DT most RBS significant JJ factors NNS contributing VVG to TO the DT decrease NN in IN total JJ cash NN costs NNS per IN ounce NN in IN 2004 CD were VBD . SENT higher JJR byproduct NN revenue NN as IN a DT result NN of IN increased JJ production NN and CC higher JJR byproduct NN metal NN prices NNS , , elimination NN of IN the DT El NP Coco NP royalty NN and CC increased JJ gold NN production NN . SENT Total JJ cash NN costs NNS per IN ounce NN is VBZ not RB a DT recognized VVN measure NN under IN US NP GAAP NP and CC is VBZ described VVN more RBR fully RB below IN . SENT 2004 CD 2003 CD Total JJ cash NN costs NNS per IN ounce NN prior JJ year NN 269 CD 182 CD Lower VV higher JJR gold NN production NN 35 CD 19 CD Stronger JJR Canadian JJ dollar NN 29 CD 30 CD Higher RBR lower VV El NP Coco NP royalty NN 47 CD 13 CD Cost NN associated VVN with IN increased JJ throughput NN 39 CD 77 CD Foreign JJ exchange NN hedge NN gains NNS 18 RB Higher RBR lower JJR byproduct NN revenue NN 181 CD 52 CD Total JJ cash NN costs NNS per IN ounce NN current JJ year NN 56 CD 269 CD 37 CD Total JJ cash NN cost NN per IN ounce NN is VBZ not RB a DT recognized VVN measure NN under IN US NP GAAP NP and CC this DT data NNS may MD not RB be VB comparable JJ to TO data NNS presented VVN by IN other JJ gold NN producers NNS . SENT Management NP believes VVZ that IN this DT generally RB accepted VVN industry NN measure NN is VBZ a DT realistic JJ indication NN of IN operating VVG performance NN and CC is VBZ useful JJ in IN allowing VVG year NN over IN year NN comparisons NNS . SENT As IN illustrated VVN in IN the DT table NN below RB , , this DT measure NN is VBZ calculated VVN by IN adjusting VVG Production NN Costs NNS as RB shown VVN in IN the DT Consolidated NP Statement NN of IN Income NP Loss NN and CC Comprehensive NP Income NP Loss NN for IN net JJ byproduct NN revenues NNS , , royalties NNS , , inventory NN adjustments NNS and CC asset NN retirement NN provisions NNS . SENT This DT measure NN is VBZ intended VVN to TO provide VV investors NNS with IN information NN about IN the DT cash NN generating VVG capabilities NNS of IN mining NN operations NNS . SENT Management NP uses VVZ this DT measure NN to TO monitor VV the DT performance NN of IN mining NN operations NNS . SENT Since IN market NN prices NNS for IN gold NN are VBP quoted VVN on IN a DT per FW ounce NN basis NN , , using VVG this DT per IN ounce NN measure NN allows VVZ management NN to TO assess VV the DT mine's JJ cash NN generating VVG capabilities NNS at IN various JJ gold NN prices NNS . SENT Management NN is VBZ aware JJ that IN this DT per FW ounce NN measure NN of IN performance NN can MD be VB impacted VVN by IN fluctuations NNS in IN byproduct NN metal NN prices NNS and CC exchange NN rates NNS . SENT Management NP compensates VVZ for IN the DT limitation NN inherent JJ in IN this DT measure NN by IN using VVG it PP in IN conjunction NN with IN the DT minesite NN cost NN per IN ton NN measure NN discussed VVN below IN as RB well RB as IN other JJ data NNS prepared VVN in IN accordance NN with IN US NP GAAP NP . SENT Management NP also RB performs VVZ sensitivity NN analyses NNS in IN order NN to TO quantify VV the DT effects NNS of IN fluctuating VVG metal NN prices NNS and CC exchange NN rates NNS . SENT Minesite NN cost NN per IN ton NN is VBZ not RB a DT recognized VVN measure NN under IN US NP GAAP NP and CC this DT data NNS may MD not RB be VB comparable JJ to TO data NNS presented VVN by IN other JJ gold NN producers NNS . SENT As IN illustrated VVN in IN the DT table NN below RB , , this DT measure NN is VBZ calculated VVN by IN adjusting VVG Production NN Costs NNS as RB shown VVN in IN the DT Consolidated NP Statement NN of IN Income NP Loss NN and CC Comprehensive NP Income NP Loss NN for IN royalties NNS , , inventory NN and CC hedging NN adjustments NNS and CC asset NN retirement NN provisions NNS and CC then RB dividing VVG by IN tons NNS processed VVN through IN the DT mill NN . SENT Since IN total JJ cash NN cost NN data NNS can MD be VB affected VVN by IN fluctuations NNS in IN byproduct NN metal NN prices NNS and CC exchange NN rates NNS , , management NN believes VVZ this DT measure NN provides VVZ additional JJ information NN regarding VVG the DT performance NN of IN mining NN operations NNS and CC allows VVZ management NN to TO monitor VV operating VVG costs NNS on IN a DT more RBR consistent JJ basis NN as IN the DT per FW ton NN measure NN eliminates VVZ the DT cost NN variability NN associated VVN with IN varying VVG production NN levels NNS . SENT Management NP also RB uses VVZ this DT measure NN to TO determine VV the DT economic JJ viability NN of IN mining NN blocks NNS . SENT As IN each DT mining NN block NN is VBZ evaluated VVN based VVN on IN the DT net JJ realizable JJ value NN of IN each DT ton NN mined VVD , , in IN order NN to TO be VB economically RB viable JJ the DT estimated JJ revenue NN on IN a DT per FW ton NN basis NN must MD be VB in IN excess NN of IN the DT minesite NN cost NN per IN ton NN . SENT Management NN is VBZ aware JJ that IN this DT per FW ton NN measure NN is VBZ impacted VVN by IN fluctuations NNS in IN production NN levels NNS and CC thus RB uses VVZ this DT measure NN as IN an DT evaluation NN tool NN in IN conjunction NN with IN production NN costs NNS prepared VVN in IN accordance NN with IN US NP GAAP NP . SENT This DT measure NN supplements NNS production NN cost NN information NN prepared VVN in IN accordance NN with IN US NP GAAP NP and CC allows VVZ investors NNS to TO distinguish VV between IN changes NNS in IN production NN costs NNS resulting VVG from IN changes NNS in IN production NN versus IN changes NNS in IN operating VVG performance NN . SENT Both CC of IN these DT non JJ GAAP NP measures NNS used VVN should MD be VB considered VVN together RB with IN other JJ data NNS prepared VVN in IN accordance NN with IN US NP GAAP NP , , and CC none NN of IN the DT measures NNS taken VVN by IN themselves PP is VBZ necessarily RB indicative JJ of IN operating VVG costs NNS or CC cash NN flow NN measures NNS prepared VVN in IN accordance NN with IN US NP GAAP NP . SENT The DT tables NNS presented VVD below RB reconcile VV total JJ cash NN costs NNS and CC minesite NN costs NNS per IN ton NN to TO the DT figures NNS presented VVN in IN the DT financial JJ statements NNS prepared VVN in IN accordance NN with IN US NP GAAP NP . SENT Reconciliation NN of IN Total JJ Cash NN Costs NNS per IN ounce NN 2004 CD 2003 CD 2002 CD thousands NNS , , except IN as RB noted VVN Production NN costs NNS per IN Consolidated NP Statement NN of IN Income NP Loss NN 98 CD , , 168 CD 104 CD , , 990 CD 75 CD , , 969 CD Adjustments NNS . SENT Byproduct NN revenues NNS , , net JJ of IN smelting VVG , , refining NN and CC marketing NN charges NNS 82 CD , , 521 CD 41 CD , , 254 CD 27 CD , , 850 CD El NP Coco NP royalty NN 12 CD , , 888 CD 10 CD , , 764 CD Accretion NN expense NN and CC other JJ 493 CD 151 CD 708 CD Cash NP costs NNS 15 CD , , 154 CD 50 CD , , 697 CD 36 CD , , 647 CD Gold NP production NN ounces NNS 271 CD , , 567 CD 236 CD , , 653 CD 260 CD , , 183 CD Cash NN costs NNS per IN ounce NN 56 CD 215 CD 141 CD El NP Coco NP royalty NN 54 CD 41 CD Total JJ cash NN costs NNS per IN ounce NN 56 CD 269 CD 182 CD 38 CD Reconciliation NN of IN Minesite JJ Costs NNS per IN ton NN 2004 CD 2003 CD 2002 CD thousands NNS , , except IN as RB noted VVN Production NN costs NNS per IN Consolidated NP Statement NN of IN Income NP Loss NN 98 CD , , 168 CD 104 CD , , 990 CD 75 CD , , 969 CD Adjustments NNS . SENT Inventory NN i NP and CC hedging VVG ii NN adjustments NNS 12 CD , , 107 CD 54 CD 609 CD El NP Coco NP royalty NN 12 CD , , 888 CD 10 CD , , 764 CD Accretion NN expense NN and CC other JJ 314 CD 519 CD 1 CD , , 301 CD Minesite NP costs NNS US NP 109 CD , , 961 CD 91 CD , , 637 CD 64 CD , , 513 CD Minesite NP costs NNS C NP 142 CD , , 702 CD 127 CD , , 931 CD 101 CD , , 289 CD Tons NNS milled VVD 000 CD s PP tons NNS 2 CD , , 977 CD 2 CD , , 449 CD 1 CD , , 963 CD Minesite NP costs NNS per IN ton NN C $ 48 CD 52 CD 52 CD Notes NNS . SENT i NP Under IN the DT Company's NP revenue NN recognition NN policy NN , , revenue NN is VBZ recognized VVN on RB concentrates VVZ when WRB legal JJ title NN passes VVZ . SENT Since IN minesite NN costs NNS per IN ton NN are VBP calculated VVN on IN a DT production NN basis NN , , this DT adjustment NN reflects VVZ the DT portion NN of IN costs NNS associated VVN with IN concentrate NN production NN for IN which WDT revenue NN has VHZ not RB been VBN recognized VVN in IN the DT year NN . SENT ii NN Hedging NN adjustments NNS reflect VVP gains NNS and CC losses NNS on IN the DT Company's NP derivative JJ positions NNS entered VVD into IN to TO hedge VV the DT effects NNS of IN foreign JJ exchange NN fluctuations NNS on IN production NN costs NNS . SENT These DT items NNS are VBP not RB reflective JJ of IN operating VVG performance NN and CC thus RB have VHP been VBN eliminated VVN when WRB calculating VVG minesite NN costs NNS per IN ton NN . SENT Exploration NP and CC Corporate NP Development NP Expense NN In IN 2004 CD , , with IN Goldex NP and CC Lapa NP in IN the DT pre NP production NN development NN stage NN , , the DT exploration NN team NN was VBD able JJ to TO focus VV on IN new JJ opportunities NNS . SENT The DT exploration NN team NN continued VVD to TO assess VV properties NNS around IN the DT LaRonde NP Mine NP . SENT Exploration NN expenditures NNS on IN the DT Cadillac NP Bousquet NP belt NN were VBD 2 CD . SENT 3 CD million CD in IN 2004 CD , , up RB only RB marginally RB from IN 2 CD . SENT 2 CD million CD in IN the DT prior JJ year NN . SENT In IN 2003 CD , , the DT majority NN of IN the DT expenditures NNS on IN the DT Cadillac NP Bousquet NP belt NN were VBD dedicated VVN to TO the DT Lapa NP exploration NN program NN . SENT In IN 2004 CD , , exploration NN was VBD conducted VVN on IN the DT Ellison NP property NN , , adjacent JJ to TO the DT Bousquet NP property NN west NN of IN LaRonde NP . SENT Exploration NN programs NNS were VBD commenced VVD on IN the DT Chibex NP properties NNS , , contiguous JJ to TO the DT Lapa NP property NN , , where WRB testing NN began VVD for IN the DT existence NN of IN Lapa NP style NN mineralization NN . SENT Agnico NP Eagle's NP portion NN of IN exploration NN expenditures NNS of IN Contact NP Diamond NP decreased VVD in IN 2004 CD over IN 2003 CD due JJ to TO decreased VVN exploration NN activities NNS . SENT In IN 2004 CD , , Contact NP Diamond's NP exploration NN was VBD focused VVN on IN evaluating VVG the DT results NNS of IN a DT bulk JJ sample NN completed VVN in IN 2003 CD and CC initial JJ drilling NN of IN new JJ targets NNS . SENT In IN 2003 CD , , higher JJR exploration NN expenditures NNS were VBD the DT result NN of IN Contact NP Diamond NP conducting VVG a DT bulk JJ sample NN on IN one CD of IN its PP$ kimberlite NN pipes NNS . SENT In IN 2004 CD , , the DT Company NN purchased VVD a DT 14 CD equity NN stake NN in IN Riddarhyttan NP which WDT owns VVZ the DT Suurikuusikko NP gold NN deposit NN in IN Finland NP . SENT Riddarhyttan NP conducted VVD an DT extensive JJ drilling NN program NN in IN 2004 CD , , which WDT culminated VVD in IN a DT new JJ resource NN calculation NN in IN early JJ 2005 CD . SENT The DT amounts NNS shown VVN in IN the DT table NN below IN are VBP Agnico NP Eagle's NP portion NN of IN Riddarhyttan's NP losses NNS from IN the DT date NN of IN acquisition NN to TO the DT end NN of IN 2004 CD . SENT Agnico NP Eagle NP considers VVZ its PP$ equity NN losses NNS in IN Riddarhyttan NP as IN exploration NN as IN the DT significant JJ majority NN of IN these DT losses NNS are VBP generated VVN from IN Riddarhyttan's NP exploration NN activities NNS . SENT Also RB in IN 2004 CD , , Agnico NP Eagle NP purchased VVD all DT of IN Contact NP Diamond's NP gold NN exploration NN properties NNS , , including VVG a DT Nevada NP based VVN subsidiary NN which WDT was VBD renamed VVN Agnico NP Eagle NP USA NP Limited NP . SENT Agnico NP Eagle NP USA NP Limited NP is VBZ currently RB conducting VVG exploration NN in IN proven JJ gold NN producing VVG areas NNS of IN Nevada NP . SENT In IN 2003 CD and CC up RB to TO September NP 30 CD , , 2004 CD , , exploration NN expenditures NNS related VVN to TO United NP States NPS exploration NN were VBD recorded VVN as IN part NN of IN Agnico NP Eagle's NP portion NN of IN Contact NP Diamond NP expenditures NNS . SENT Agnico NP Eagle's NP corporate JJ development NN team NN remained VVD active JJ in IN 2004 CD despite IN the DT decrease NN in IN expenditures NNS over IN 2003 CD . SENT The DT 0 CD . SENT 4 CD million CD decrease NN was VBD due JJ to TO the DT team NN utilizing VVG more JJR of IN the DT Company's NP in IN house NN expertise NN to TO evaluate VV opportunities NNS rather RB than IN external JJ consultants NNS . SENT 39 CD The DT table NN below RB illustrates VVZ the DT various JJ components NNS of IN exploration NN expense NN . SENT 2004 CD 2003 CD 2002 CD Lapa NP property NN net NN of IN investment NN tax NN credits NNS 1 CD , , 751 CD 246 CD Other JJ properties NNS on IN the DT Cadillac NP Bousquet NP belt NN 2 CD , , 276 CD 465 CD 976 CD Agnico NP Eagle NP portion NN of IN exploration NN conducted VVN by IN Contact NP Diamond NP 1 CD , , 784 CD 4 CD , , 216 CD 2 CD , , 271 CD United NP States NPS exploration NN 544 NP Agnico NP Eagle NP portion NN of IN exploration NN conducted VVN by IN Riddarhyttan NP Resources NPS AB NP 440 CD Corporate JJ development NN expense NN 764 CD 1 CD , , 169 CD 273 CD 5 CD , , 808 CD 7 CD , , 601 CD 3 CD , , 766 CD Exploration NP is VBZ only RB conducted VVN if IN warranted VVN by IN drilling NN results NNS and CC project NN economics NNS . SENT Therefore RB , , the DT 2003 CD increase NN in IN expenses NNS over IN 2002 CD reflects VVZ the DT success NN of IN the DT Company's NP exploration NN and CC development NN efforts NNS . SENT The DT 2003 CD gross JJ exploration NN expenses NNS on IN the DT Lapa NP property NN were VBD approximately RB 3 CD . SENT 0 CD million CD . SENT However RB , , these DT expenses NNS were VBD reduced VVN by IN exploration NN investment NN tax NN credits NNS received VVN from IN the DT provincial JJ government NN of IN Quebec NP . SENT In IN 2004 CD , , the DT Company NN issued VVD flow NN through IN shares NNS to TO take VV advantage NN of IN its PP$ large JJ undeducted JJ exploration NN tax NN pools NNS . SENT Issuing VVG flow NN through IN shares NNS is VBZ common JJ practice NN in IN the DT mining NN industry NN for IN companies NNS with IN large JJ pools NNS of IN available JJ tax NN deductions NNS . SENT Under IN the DT terms NNS of IN the DT flow NN through IN share NN agreements NNS , , the DT Company NN is VBZ required VVN to TO spend VV the DT proceeds NNS of IN the DT offering NN on IN eligible JJ Canadian JJ exploration NN expenses NNS and CC renounce VV the DT tax NN deductions NNS associated VVN with IN those DT exploration NN expenses NNS to TO the DT initial JJ purchasers NNS of IN the DT flow NN through IN shares NNS . SENT Since IN investors NNS are VBP receiving VVG tax NN deductions NNS for IN the DT exploration NN expenses NNS incurred VVN by IN the DT Company NN , , these DT flow NN through IN shares NNS typically RB command VVP a DT premium NN to TO the DT market NN price NN of IN the DT Company's NP stock NN on IN the DT date NN of IN issuance NN . SENT Should MD the DT Company NN fail VVP to TO spend VV the DT proceeds NNS of IN the DT flow NN through IN share NN offering NN on IN eligible JJ Canadian JJ exploration NN expenses NNS , , the DT investors NNS would MD lose VV their PP$ tax NN deductions NNS , , which WDT would MD create VV the DT potential NN for IN shareholder NN lawsuits NNS and CC penalties NNS imposed VVN by IN the DT Canada NP Revenue NP Agency NP . SENT In IN its PP$ history NN , , the DT Company NN has VHZ never RB failed VVN to TO spend VV flow NN through IN share NN proceeds NNS on IN eligible JJ exploration NN nor CC has VHZ it PP ever RB failed VVD to TO renounce VV those DT exploration NN expenditures NNS to TO investors NNS . SENT To TO comply VV with IN flow NN through IN share NN purchase NN agreements NNS , , the DT Company NN must MD spend VV 8 CD . SENT 1 CD million CD on IN eligible JJ Canadian JJ exploration NN expenses NNS in IN 2005 CD relating VVG to TO the DT expenditures NNS renounced VVD effective JJ December NP 31 CD , , 2004 CD . SENT In IN March NP 2005 CD , , the DT Company NN entered VVN into IN an DT agreement NN with IN Penoles NP to TO acquire VV the DT Pinos NP Altos NP project NN in IN Chihuahua NP , , Mexico NP . SENT Under IN the DT terms NNS of IN the DT agreement NN , , Agnico NP Eagle NP has VHZ the DT option NN to TO purchase VV the DT Pinos NP Altos NP project NN for IN 65 CD million CD . SENT Agnico NP Eagle NP will MD conduct VV an DT exploration NN program NN in IN order NN to TO determine VV whether IN to TO exercise VV its PP$ option NN . SENT The DT Company NN has VHZ currently RB planned VVN an DT exploration NN program NN which WDT contemplates VVZ 2 CD . SENT 8 CD million CD in IN exploration NN expenditures NNS in IN 2005 CD . SENT General NP and CC Administrative NP Expenses NNS General NP and CC administrative JJ expenses NNS decreased VVD to TO 6 CD . SENT 9 CD million CD in IN 2004 CD from IN 7 CD . SENT 1 CD million CD in IN 2003 CD . SENT A DT number NN of IN factors NNS influenced VVN general JJ and CC administrative JJ expenses NNS in IN 2004 CD . SENT The DT strengthening JJ Canadian JJ dollar NN had VHD a DT negative JJ impact NN on IN general JJ and CC administrative JJ expenses NNS as IN most JJS of IN these DT expenses NNS are VBP incurred VVN in IN Canadian JJ dollars NNS . SENT This DT negative JJ impact NN was VBD offset VVN by IN a DT reduction NN in IN financial JJ reporting VVG compliance NN costs NNS , , as RB much RB of IN these DT activities NNS were VBD brought VVN in IN house NN in IN 2004 CD , , and CC a DT reduction NN in IN pension NN expense NN due JJ to TO settlements NNS of IN the DT Company's NP Retirement NP Compensation NN Arrangement NN Plans NNS . SENT Provincial JJ and CC Federal NP Capital NP Taxes NNS Provincial JJ capital NN taxes NNS were VBD 0 CD . SENT 4 CD million CD in IN 2004 CD compared VVN to TO 1 CD . SENT 2 CD million CD in IN 2003 CD . SENT These DT taxes NNS are VBP assessed VVN on IN the DT Company's NP capitalization NN paid VVD up RP capital NN and CC debt NN less CC certain JJ allowances NNS and CC tax NN credits NNS for IN exploration NN expenses NNS incurred VVD . SENT The DT decrease NN in IN 2004 CD was VBD due JJ to TO a DT favorable JJ tax NN re IN assessment NN relating VVG to TO the DT 2003 CD taxation NN year NN relating VVG to TO the DT calculation NN of IN exploration NN expenditures NNS eligible JJ for IN tax NN credits NNS . SENT Federal JJ capital NN taxes NNS are VBP assessed VVN on IN essentially RB the DT same JJ capitalization NN base NN as IN provincial JJ capital NN taxes NNS . SENT The DT decrease NN in IN 2004 CD to TO 1 CD . SENT 0 CD million CD from IN 1 CD . SENT 1 CD million CD in IN 2003 CD represents VVZ increases NNS in IN capitalization NN throughout IN the DT 40 CD year NN offset VVN by IN decreased VVN tax NN rates NNS . SENT New JJ legislation NN introduced VVN in IN 2003 CD will MD eliminate VV federal JJ capital NN taxes NNS by IN 2008 CD . SENT These DT changes NNS are VBP being VBG phased VVN in IN gradually RB with IN rate NN reductions NNS each DT year NN . SENT Amortization NN Expense NN Amortization NN expense NN was VBD 21 CD . SENT 8 CD million CD in IN 2004 CD compared VVN to TO 17 CD . SENT 5 CD million CD in IN 2003 CD . SENT The DT Company NN calculates VVZ its PP$ amortization NN on IN a DT unit NN of IN production NN basis NN using VVG proven JJ and CC probable JJ reserve NN tonnage NN as IN its PP$ amortization NN base NN . SENT A DT 22 CD increase NN in IN tons NNS processed VVN was VBD the DT main JJ reason NN for IN the DT increase NN . SENT Amortization NN on IN a DT per FW ton NN basis NN was VBD lower JJR than IN originally RB anticipated VVN at IN 7 CD per IN ton NN compared VVN to TO an DT initial JJ estimate NN of IN 8 CD per IN ton NN . SENT The DT decrease NN was VBD a DT result NN of IN recording VVG 2 CD . SENT 3 CD million CD of IN amortization NN in IN inventory NN in IN 2004 CD , , reflecting VVG the DT amortization NN costs NNS associated VVN with IN inventoried VVN concentrates VVZ . SENT Interest NN Expense NN In IN 2004 CD , , interest NN expense NN decreased VVD to TO 8 CD . SENT 2 CD million CD from IN 9 CD . SENT 2 CD million CD in IN 2003 CD due JJ to TO realized VVN gains NNS generated VVN under IN an DT interest NN rate NN swap NN . SENT Throughout IN 2004 CD , , the DT Company NN received VVD 0 CD . SENT 9 CD million CD in IN swap NN payments NNS such JJ that IN net JJ interest NN on IN the DT convertible JJ subordinated JJ debentures NNS was VBD 5 CD . SENT 6 CD million CD . SENT Under IN the DT terms NNS of IN the DT interest NN rate NN swap NN , , fixed VVN rate NN payments NNS on IN the DT convertible JJ subordinated JJ debentures NNS were VBD swapped VVN for IN variable JJ rate NN payments NNS . SENT The DT notional JJ amount NN under IN the DT swap NN exactly RB matches VVZ the DT 144 CD million CD face NN value NN of IN the DT debentures NNS and CC the DT swap NN agreement NN terminates VVZ on IN February NP 15 CD , , 2006 CD , , which WDT is VBZ the DT earliest JJS date NN that IN the DT debentures NNS can MD be VB called VVN for IN redemption NN . SENT Under IN the DT terms NNS of IN the DT swap NN agreement NN , , the DT Company NN makes VVZ interest NN payments NNS of IN three CD month NN LIBOR NP plus CC a DT spread NN of IN 2 CD . SENT 37 CD and CC receives VVZ fixed JJ interest NN payments NNS of IN 4 CD . SENT 50 CD , , which WDT completely RB offsets VVZ the DT interest NN payments NNS made VVN on IN the DT Convertible JJ Debentures NNS . SENT The DT three CD month NN LIBOR NP rate NN was VBD also RB capped VVN at IN 3 CD . SENT 38 CD such JJ that IN total JJ variable JJ interest NN payments NNS will MD not RB exceed VV 5 CD . SENT 75 CD . SENT Of IN the DT remaining JJ 2 CD . SENT 6 CD million CD of IN interest NN expense NN in IN 2004 CD , , 1 CD . SENT 4 CD million CD relates VVZ to TO cash VV standby JJ fees NNS and CC other JJ costs NNS associated VVN with IN the DT revolving JJ bank NN facility NN , , and CC the DT remaining JJ 1 CD . SENT 2 CD million CD represents VVZ non JJ cash NN amortization NN of IN the DT financing NN costs NNS associated VVN with IN the DT 2012 CD convertible JJ subordinated JJ debentures NNS and CC revolving JJ bank NN facility NN . SENT In IN December NP 2004 CD , , the DT Company NN refinanced VVD its PP$ revolving JJ bank NN facility NN . SENT The DT amount NN available JJ under IN the DT new JJ facility NN is VBZ 100 CD million CD and CC the DT interest NN rate NN under IN the DT new JJ facility NN can MD range VV from IN LIBOR NP plus CC 1 CD . SENT 50 CD to TO LIBOR NP plus CC 2 CD . SENT 25 CD per IN annum NN depending VVG on IN certain JJ financial JJ ratios NNS . SENT Standby JJ fees NNS on IN undrawn NN portions NNS of IN the DT new JJ facility NN can MD range VV from IN 0 CD . SENT 5 CD to TO 0 CD . SENT 875 CD per IN annum NN depending VVG on IN certain JJ financial JJ ratios NNS . SENT The DT new JJ facility NN is VBZ fully RB revolving JJ and CC any DT indebtedness NN under IN the DT facility NN is VBZ due JJ at IN the DT end NN of IN December NP 2007 CD . SENT With IN the DT consent NN of IN the DT lenders NNS , , Agnico NP Eagle NP may MD extend VV the DT new JJ facility NN to TO the DT end NN of IN December NP 2010 CD . SENT The DT new JJ facility NN is VBZ secured VVN by IN a DT first JJ charge NN on IN substantially RB all DT of IN the DT property NN relating VVG to TO the DT Company's NP LaRonde NP Mine NP and CC El NP Coco NP property NN . SENT Income NN and CC Mining NN Taxes NNS In IN 2004 CD , , the DT effective JJ accounting NN income NN tax NN recovery NN rate NN was VBD 6 CD . SENT 3 LS compared VVN to TO an DT income NN tax NN recovery NN rate NN of IN 8 CD . SENT 0 CD in IN 2003 CD . SENT Although IN Agnico NP Eagle NP reported VVD income NN before IN income NN and CC mining NN taxes NNS of IN 46 CD . SENT 0 CD million CD , , tax NN expense NN was VBD not RB recorded VVN due JJ to TO the DT utilization NN of IN losses NNS carried VVD forward RB which WDT had VHD previously RB not RB been VBN recorded VVN as IN future JJ taxes NNS . SENT Normally RB , , the DT benefits NNS of IN being VBG able JJ to TO utilize VV prior JJ year NN losses NNS against IN future JJ taxable JJ income NN would MD have VH been VBN recorded VVN as IN a DT future JJ tax NN asset NN . SENT However RB , , due JJ to TO the DT uncertainty NN surrounding VVG the DT realization NN of IN this DT and CC other JJ limited JJ life NN tax NN assets NNS at IN the DT end NN of IN 2003 CD , , a DT full JJ valuation NN allowance NN was VBD provided VVN against IN these DT tax NN assets NNS thereby RB reducing VVG their PP$ value NN in IN the DT consolidated JJ financial JJ statements NNS to TO nil NN at IN the DT end NN of IN 2003 CD . SENT The DT effect NN of IN utilizing VVG these DT previously RB unrecorded VVN benefits NNS in IN 2004 CD reduces VVZ the DT tax NN expense NN that WDT would MD have VH otherwise RB been VBN recorded VVN in IN 2004 CD . SENT In IN 2003 CD , , Agnico NP Eagle NP reported VVD a DT loss NN before IN income NN and CC mining NN taxes NNS of IN 18 CD . SENT 1 CD million CD but CC did VVD not RB record VV a DT recovery NN , , and CC related JJ future JJ tax NN asset NN , , representing VVG the DT ability NN to TO carry VV these DT losses NNS forward RB to TO reduce VV taxes NNS payable JJ in IN future JJ years NNS . SENT Therefore RB , , the DT recovery NN rate NN in IN 2003 CD was VBD 8 CD . SENT 0 CD compared VVN to TO a DT statutory JJ tax NN rate NN of IN 38 CD . SENT 3 LS . SENT 41 CD Liquidity NN and CC Capital NP Resources NPS In IN 2004 CD , , the DT Company NN amended VVD its PP$ revolving JJ bank NN facility NN with IN a DT syndicate NN of IN international JJ banks NNS . SENT The DT amended VVN facility NN provides VVZ the DT Company NN with IN a DT 100 CD million CD line NN of IN credit NN on IN a DT revolving JJ basis NN . SENT The DT facility NN matures VVZ and CC all DT indebtedness NN thereunder RB is VBZ due JJ and CC payable JJ on IN December NP 23 CD , , 2007 CD . SENT The DT Company NN , , with IN the DT consent NN of IN lenders NNS representing VVG 662 CD 3 CD of IN the DT aggregate JJ commitments NNS under IN the DT facility NN , , has VHZ the DT option NN to TO extend VV the DT term NN of IN the DT facility NN for IN three CD additional JJ one CD year NN terms NNS to TO December NP 23 CD , , 2010 CD . SENT The DT facility NN limits NNS , , among IN other JJ things NNS , , the DT Company's NP ability NN to TO incur VV additional JJ indebtendness NN , , pay NN dividends NNS , , make VV investments NNS or CC loans NNS , , transfer NN assets NNS or CC make VV expenditures NNS that WDT are VBP not RB consistent JJ with IN mine NN plans NNS and CC operating NN budgets NNS delivered VVD pursuant JJ to TO the DT facility NN . SENT The DT facility NN also RB requires VVZ the DT Company NN to TO maintain VV specified JJ financial JJ ratios NNS and CC meet VV financial JJ condition NN covenants NNS . SENT Letters NNS of IN credit NN issued VVN as IN security NN for IN pension NN and CC environmental JJ obligations NNS decrease VVP the DT amount NN available JJ under IN the DT facility NN . SENT As RB at IN December NP 31 CD , , 2004 CD , , net JJ of IN letters NNS of IN credit NN issued VVN , , the DT Company NN had VHD 89 CD million CD of IN undrawn NN credit NN under IN its PP$ revolving JJ bank NN facility NN . SENT At IN the DT end NN of IN 2004 CD , , the DT Company's NP cash NN and CC cash NN equivalents NNS were VBD 33 CD million CD compared VVN to TO 57 CD million CD at IN the DT end NN of IN 2003 CD . SENT In IN 2004 CD , , significant JJ increases NNS in IN operating VVG and CC financing VVG cash NN flows NNS were VBD offset VVN by IN continued JJ investments NNS in IN sustaining VVG and CC project NN capital NN at IN the DT LaRonde NP Mine NP and CC in IN the DT surrounding VVG region NN as RB well RB as IN the DT Company's NP investment NN in IN Riddarhyttan NP . SENT Operating VVG cash NN flow NN increased VVD substantially RB from IN 4 CD million CD in IN 2003 CD due RB primarily RB to TO increased VVN production NN volumes NNS and CC increased VVN metal NN prices NNS . SENT These DT positive JJ impacts NNS were VBD offset VVN by IN a DT buildup NN in IN non JJ cash NN working VVG capital NN balances NNS and CC the DT continued JJ strengthening NN of IN the DT Canadian JJ dollar NN . SENT Due JJ to TO the DT increased JJ production NN volumes NNS , , 2004 CD ended VVN with IN large JJ buildups NNS in IN metals NNS awaiting VVG settlement NN and CC concentrate VV inventories NNS . SENT These DT buildups NNS are VBP expected VVN to TO reverse VV throughout IN 2005 CD . SENT In IN 2004 CD , , the DT Company NN used VVD 95 CD million CD of IN cash NN in IN investing VVG activities NNS . SENT The DT largest JJS components NNS of IN this DT 95 CD million CD were VBD . SENT 38 CD million CD in IN capital NN expenditures NNS at IN LaRonde NP . SENT 12 CD million CD in IN capital NN expenditures NNS at IN Lapa NP and CC Goldex NP . SENT 3 CD million CD for IN the DT purchase NN of IN gold JJ properties NNS from IN Contact NP Diamond NP . SENT 22 CD million CD net JJ investment NN and CC acquisition NN expenditures NNS including VVG 13 CD million CD for IN the DT Company's NP equity NN investment NN in IN Riddarhyttan NP and CC 9 CD million CD for IN purchases NNS of IN available JJ for IN sale NN securities NNS . SENT 14 CD million CD increase NN in IN short JJ term NN investments NNS for IN tax NN planning NN purposes NNS . SENT and CC 6 CD million CD increase NN in IN restricted JJ cash NN pursuant JJ to TO a DT flow NN through IN share NN private JJ placement NN . SENT In IN 2004 CD , , the DT Company NN declared VVD its PP$ 25 CD th NN consecutive JJ annual JJ dividend NN of IN 0 CD . SENT 03 CD per IN share NN , , unchanged JJ from IN 2003 CD . SENT Although IN the DT Company NN expects VVZ to TO continue VV paying VVG dividends NNS , , future JJ dividends NNS will MD be VB at IN the DT discretion NN of IN the DT Company's NP Board NP of IN Directors NPS and CC will MD be VB subject JJ to TO factors NNS such JJ as IN income NN , , financial JJ condition NN and CC capital NN requirements NNS . SENT Agnico NP Eagle's NP contractual JJ obligations NNS as IN at IN December NP 31 CD , , 2004 CD are VBP summarized VVN as RB follows VVZ . SENT Contractual JJ Obligations NNS Total JJ Less JJR than IN 1 CD Year NN 1 CD 3 CD Years NNS 3 CD 5 CD Years NNS More JJR than IN 5 CD Years NNS Long JJ term NN debt NN 1 CD 143 CD . SENT 8 CD 143 CD . SENT 8 CD Capital NP lease NN obligations NNS 0 CD . SENT 5 CD 0 CD . SENT 5 CD Letter NN of IN credit NN obligations NNS 11 CD . SENT 1 CD 11 CD . SENT 1 CD Reclamation NN obligations NNS 2 CD 24 CD . SENT 6 CD 2 CD . SENT 0 CD 2 CD . SENT 1 CD 2 CD . SENT 1 CD 18 CD . SENT 4 CD Pension NP obligations NNS 3 CD 3 CD . SENT 4 CD 0 CD . SENT 4 CD 0 CD . SENT 8 CD 0 CD . SENT 8 CD 1 CD . SENT 4 CD 183 CD . SENT 4 CD 2 CD . SENT 9 CD 2 CD . SENT 9 CD 2 CD . SENT 9 CD 174 CD . SENT 7 CD Notes NNS . SENT 1 LS The DT Company's NP convertible JJ subordinated JJ debentures NNS , , with IN an DT aggregate JJ principal JJ amount NN of IN 143 CD . SENT 8 CD million CD , , mature VVP on IN February NP 15 CD , , 2012 CD . SENT The DT Company NN may MD redeem VV the DT debentures NNS on IN or CC after IN February NP 15 CD , , 2006 CD , , in IN cash NN , , or CC at IN the DT option NN of IN the DT Company NN , , by IN delivering VVG freely RB tradeable JJ common JJ shares NNS . SENT 42 CD 2 CD Mining NP operations NNS are VBP subject JJ to TO environmental JJ regulations NNS which WDT require VVP companies NNS to TO reclaim VV and CC remediate VV land NN disturbed VVN by IN mining NN operations NNS . SENT The DT Company NN has VHZ submitted VVN closure NN plans NNS to TO the DT appropriate JJ governmental JJ agencies NNS which WDT estimate VVP the DT nature NN , , extent NN and CC costs NNS of IN reclamation NN for IN each DT of IN its PP$ mining NN properties NNS . SENT The DT estimated JJ undiscounted JJ cash NN outflows NNS of IN these DT reclamation NN obligations NNS are VBP presented VVN here RB . SENT These DT estimated JJ costs NNS are VBP recorded VVN in IN the DT Company's NP consolidated JJ financial JJ statements NNS on IN a DT discounted VVN basis NN in IN accordance NN with IN FAS NP 143 CD . SENT See VV Note VV 5 CD a DT to TO the DT audited JJ consolidated JJ financial JJ statements NNS . SENT 3 LS The DT Company NN has VHZ Retirement NP Compensation NN Arrangements NNS RCA NP with IN certain JJ executives NNS and CC a DT Defined VVN Benefit NP pension NN plan NN for IN certain JJ former JJ employees NNS . SENT The DT RCAs NP provide VV pension NN benefits NNS to TO the DT executives NNS equal VVP to TO 2 CD of IN the DT executive's NNS final JJ three CD year NN average JJ pensionable JJ earnings NNS for IN each DT year NN of IN service NN with IN the DT Company NN less RBR the DT annual JJ pension NN payable JJ under IN the DT Company's NP basic JJ defined VVN contribution NN plan NN . SENT Payments NNS under IN the DT RCAs NP are VBP secured VVN by IN letter NN of IN credit NN from IN a DT Canadian JJ chartered JJ bank NN . SENT The DT figures NNS presented VVN in IN this DT table NN have VHP been VBN actuarially RB determined VVN . SENT Outlook NN For IN 2005 CD , , the DT Company NN expects VVZ to TO continue VV working VVG toward IN its PP$ strategic JJ objectives NNS using VVG LaRonde NP as IN the DT cornerstone NN . SENT Agnico NP Eagle NP expects VVZ LaRonde NP to TO generate VV strong JJ cash NN flow NN again RB in IN 2005 CD as IN production NN volumes NNS are VBP expected VVN to TO remain VV steady JJ . SENT Metal NN prices NNS will MD have VH a DT large JJ impact NN on IN financial JJ results NNS , , and CC although IN the DT Company NN cannot NN predict VVP the DT prices NNS that WDT will MD be VB realized VVN in IN 2005 CD , , prices NNS in IN early JJ 2005 CD have VHP continued VVN to TO remain VV strong JJ . SENT In IN 2005 CD , , revenues NNS from IN mining NN operations NNS are VBP expected VVN to TO be VB largely RB unchanged JJ . SENT The DT table NN below RB summarizes VVZ actual JJ production NN for IN 2004 CD and CC estimated VVN production NN in IN 2005 CD . SENT 2005 CD Estimate NP 2004 CD Actual JJ Gold NP ounces NNS 280 CD , , 000 CD 271 CD , , 567 CD Silver NN 000 CD s PP ounces NNS 5 CD , , 500 CD 5 CD , , 699 CD Zinc NN 000 CD s PP pounds NNS 160 CD , , 000 CD 167 CD , , 282 CD Copper NN 000 CD s PP pounds NNS 18 CD , , 000 CD 22 CD , , 816 CD For IN 2005 CD , , the DT Company NN expects VVZ total JJ cash NN costs NNS to TO be VB in IN the DT range NN of IN 135 CD to TO 145 CD per IN ounce NN of IN gold NN compared VVN to TO 56 CD achieved VVN in IN 2004 CD . SENT Revenue NN from IN mining NN operations NNS and CC total JJ cash NN cost NN estimates NNS are VBP based VVN on IN gold NN and CC byproduct NN metal NN price NN assumptions NNS that WDT are VBP well RB below IN current JJ prices NNS and CC prices NNS realized VVN in IN 2004 CD . SENT If IN current JJ metal NN prices NNS and CC exchange NN rates NNS were VBD used VVN , , total JJ cash NN costs NNS would MD be VB well RB below IN 100 CD per IN ounce NN and CC revenues NNS from IN mining NN operations NNS would MD increase VV significantly RB . SENT Net JJ silver NN , , zinc NN and CC copper NN revenue NN is VBZ treated VVN as IN a DT reduction NN of IN production NN costs NNS in IN arriving VVG at IN estimates NNS of IN total JJ cash NN costs NNS per IN ounce NN , , and CC therefore RB production NN and CC price NN assumptions NNS play VVP an DT important JJ role NN in IN these DT estimates NNS . SENT As IN production NN costs NNS are VBP denominated VVN in IN Canadian JJ dollars NNS , , the DT C NP US NP exchange NN rate NN can MD also RB affect VV the DT estimate NN . SENT The DT table NN below RB summarizes VVZ the DT metal NN price NN assumptions NNS and CC exchange NN rate NN assumptions NNS used VVN in IN deriving VVG the DT estimated JJ total JJ cash NN costs NNS per IN ounce NN for IN 2005 CD production NN estimates NNS for IN each DT metal NN are VBP shown VVN in IN the DT table NN above RB . SENT Gold NN 375 CD Silver NN 6 CD . SENT 00 CD Zinc NN 0 CD . SENT 45 CD Copper NN 1 CD . SENT 15 CD C NP US NP exchange NN rate NN 1 CD . SENT 27 CD Subsequent JJ to TO year NN end NN , , the DT Company NN entered VVN into IN new JJ derivative JJ contracts NNS . SENT Silver NN put VVD options NNS were VBD purchased VVN with IN a DT strike NN price NN of IN 7 CD . SENT 00 CD on IN approximately RB one CD million CD ounces NNS of IN silver NN . SENT Copper NN calls NNS were VBD written VVN with IN a DT strike NN price NN of IN 1 CD . SENT 50 CD on IN approximately RB ten CD million CD pounds NNS of IN copper NN . SENT The DT Company NN also RB entered VVD into IN a DT series NN of IN derivative JJ transactions NNS to TO sell VV zinc NN forward RB at IN 0 CD . SENT 57 CD and CC a DT zero CD cost NN collar NN was VBD entered VVN into IN to TO set VV a DT minimum JJ price NN of IN 0 CD . SENT 55 CD on IN approximately RB 49 CD million CD pounds NNS of IN zinc NN over IN 2005 CD and CC 2006 CD . SENT While IN setting VVG a DT minimum JJ price NN , , the DT zero CD cost NN collar NN strategy NN also RB limits VVZ participation NN to TO zinc NN prices NNS above IN 0 CD . SENT 67 CD . SENT See VV note NN 9 CD to TO the DT consolidated JJ financial JJ statements NNS in IN Item NN 18 CD of IN this DT Form NP 20 CD F NN . SENT 43 RB The DT estimated JJ sensitivity NN of IN LaRonde's NP 2005 CD estimated VVD total JJ cash NN costs NNS to TO a DT 10 CD change NN in IN the DT metal NN price NN and CC exchange NN rate NN assumptions NNS above RB follows VVZ . SENT Change NN in IN variable JJ Impact NN on IN total JJ cash NN costs NNS oz NP . SENT C SYM US NP 39 CD Zinc NN 17 CD Silver NN 11 CD Copper NN 6 CD The DT Company NN expects VVZ its PP$ acquisition NN of IN shares NNS of IN Riddarhyttan NP will MD result VV in IN an DT increased JJ amount NN of IN exploration NN expense NN in IN 2005 CD . SENT Agnico NP Eagle NP expects VVZ to TO record VV 10 CD . SENT 0 CD million CD of IN exploration NN expense NN in IN the DT income NN statement NN in IN 2005 CD which WDT includes VVZ 2 CD . SENT 4 CD million CD in IN non JJ cash NN expenses NNS representing VVG Agnico NP Eagle's NP share NN of IN the DT exploration NN expenses NNS of IN Contact NP Diamond NP and CC Riddarhyttan NP . SENT The DT anticipated JJ exploration NN expense NN also RB includes VVZ 2 CD . SENT 8 CD million CD of IN expenditures NNS planned VVN on IN the DT Pinos NP Altos NP project NN in IN 2005 CD . SENT Exploration NN is VBZ success NN driven VVN and CC thus RB these DT estimates NNS could MD increase VV materially RB on IN the DT success NN of IN the DT various JJ exploration NN programs NNS . SENT General JJ and CC administrative JJ expenses NNS are VBP not RB expected VVN to TO increase VV materially RB in IN 2005 CD . SENT In IN 2005 CD provincial JJ capital NN taxes NNS are VBP expected VVN to TO be VB between IN 1 CD . SENT 5 CD and CC 1 CD . SENT 7 CD million CD . SENT Federal JJ capital NN taxes NNS are VBP expected VVN to TO decrease VV to TO 0 CD . SENT 8 CD million CD in IN 2005 CD due JJ to TO new JJ legislation NN introduced VVN in IN 2003 CD which WDT reduces VVZ tax NN rates NNS every DT year NN until IN 2008 CD when WRB this DT tax NN will MD be VB eliminated VVN . SENT Amortization NN is VBZ expected VVN to TO increase VV to TO 9 CD per IN ton NN in IN 2005 CD due JJ to TO a DT higher JJR capital NN base NN and CC relatively RB small JJ increase NN in IN reserves NNS . SENT At IN current JJ three CD month NN LIBOR NP rates NNS of IN approximately RB 3 CD , , interest NN expense NN is VBZ expected VVN to TO increase VV by IN 1 CD . SENT 2 CD million CD in IN 2005 CD . SENT As IN a DT result NN of IN the DT LIBOR NP rate NN being VBG capped VVN at IN 3 CD . SENT 38 CD pursuant JJ to TO the DT terms NNS of IN the DT interest NN rate NN derivative JJ agreements NNS , , interest NN expense NN is VBZ not RB expected VVN to TO increase VV more JJR than IN 1 CD . SENT 7 CD million CD in IN 2005 CD . SENT In IN 2005 CD , , the DT Company NN expects VVZ to TO capitalize VV interest NN on IN the DT Convertible JJ Debentures NNS relating VVG to TO the DT construction NN costs NNS incurred VVN at IN Lapa NP . SENT Based VVN on IN estimated JJ construction NN expenditures NNS on IN the DT Lapa NP property NN for IN 2005 CD , , capitalized VVN interest NN is VBZ expected VVN to TO be VB between IN 0 CD . SENT 6 CD and CC 0 CD . SENT 8 CD million CD . SENT Although IN the DT Company NN is VBZ recording VVG the DT fair JJ value NN of IN stock NN options NNS in IN income NN in IN 2003 CD and CC 2004 CD , , a DT new JJ accounting NN standard NN requires VVZ that DT fair JJ value NN accounting NN be VB applied VVN to TO any DT stock NN options NNS that WDT were VBD granted VVN or CC modified VVN since IN January NP 1 CD , , 1995 CD . SENT The DT Company NN is VBZ currently RB evaluating VVG the DT requirements NNS under IN the DT new JJ standard NN and CC expects VVZ the DT adoption NN to TO have VH a DT significant JJ impact NN on IN the DT statement NN of IN income NN loss NN and CC income NN loss NN per IN share NN , , but CC no DT impact NN on IN financial JJ condition NN or CC cash NN flows NNS . SENT 44 CD In IN 2005 CD , , Agnico NP Eagle NP expects VVZ to TO incur VV approximately RB 27 CD million CD of IN capital NN expenditures NNS at IN LaRonde NP , , 12 CD million CD on IN the DT continued JJ construction NN and CC underground JJ at IN the DT Lapa NP property NN and CC 2 CD million CD on IN completing VVG the DT Goldex NP bulk NN sample NN program NN and CC revising VVG the DT current JJ feasibility NN study NN and CC mining NN plan NN . SENT Capital NN expenditures NNS could MD increase VV significantly RB at IN Goldex NP should MD construction NN and CC development NN commence VV in IN 2005 CD . SENT Agnico NP Eagle NP also RB expects VVZ to TO incur VV cash NN exploration NN expenditures NNS of IN 6 CD million CD on IN properties NNS on IN the DT Cadillac NP Bousquet NP belt NN and CC in IN the DT United NP States NPS and CC 3 CD million CD of IN exploration NN expenditures NNS on IN the DT Pinos NP Altos NP property NN in IN Mexico NP . SENT The DT Company NN expects VVZ all PDT these DT expenditures NNS to TO be VB completely RB funded VVN out RP of IN operating VVG cash NN flow NN . SENT If IN the DT Company NN decides VVZ to TO exercise VV the DT option NN to TO purchase VV the DT Pinos NP Altos NP property NN in IN 2005 CD , , the DT cash NN portion NN up RB to TO 39 CD million CD of IN the DT 65 CD million CD acquisition NN cost NN is VBZ expected VVN to TO be VB funded VVN from IN cash NN on IN hand NN and CC operating VVG cash NN flow NN . SENT The DT Company NN continues VVZ to TO examine VV other JJ possible JJ acquisitions NNS , , which WDT if IN made VVN , , would MD be VB with IN securities NNS , , cash NN or CC a DT combination NN thereof RB . SENT If IN cash NN is VBZ used VVN , , depending VVG on IN the DT size NN of IN the DT acquisition NN , , Agnico NP Eagle NP may MD be VB required VVN to TO borrow VV money NN or CC issue NN securities NNS to TO fund VV such JJ cash NN requirements NNS . SENT Outstanding JJ Securities NPS The DT following VVG table NN presents VVZ the DT maximum JJ number NN of IN common JJ shares NNS that WDT would MD be VB outstanding JJ if IN all DT dilutive JJ instruments NNS outstanding JJ at IN March NP 22 CD , , 2005 CD were VBD exercised VVN . SENT Common JJ shares NNS outstanding JJ at IN March NP 22 CD , , 2005 CD 86 CD , , 125 CD , , 231 CD Convertible JJ Debentures NNS based VVN on IN debenture NN holders NNS option NN 10 CD , , 267 CD , , 919 CD Employee NP stock NN options NNS 3 CD , , 025 CD , , 100 CD Warrants NNS 6 CD , , 900 CD , , 000 CD 106 CD , , 318 CD , , 250 CD The DT Convertible JJ Debentures NNS are VBP convertible JJ into IN common JJ shares NNS , , at IN the DT option NN of IN the DT holder NN , , at IN any DT time NN prior RB to TO maturity NN , , at IN a DT conversion NN rate NN of IN 71 CD . SENT 429 CD common JJ shares NNS per IN 1 CD , , 000 CD principal JJ amount NN of IN debentures NNS . SENT The DT debentures NNS mature VVP on IN February NP 15 CD , , 2012 CD but CC may MD be VB redeemed VVN at IN the DT option NN of IN the DT Company NN on IN or CC after IN February NP 15 CD , , 2006 CD in IN cash NN or CC , , at IN the DT option NN of IN the DT Company NN , , by IN delivering VVG freely RB tradeable JJ common JJ shares NNS . SENT Each DT warrant NN entitles VVZ the DT holder NN to TO purchase VV one CD common JJ share NN at IN a DT price NN of IN US NP 19 CD . SENT 00 CD . SENT The DT warrants NNS expire VVP on IN November NP 14 CD , , 2007 CD . SENT Critical JJ Accounting NP Estimates NNS The DT preparation NN of IN the DT consolidated JJ financial JJ statements NNS in IN accordance NN with IN US NP GAAP NP requires VVZ management NN to TO make VV estimates NNS and CC judgments NNS that WDT affect VVP the DT reported VVN amounts NNS of IN assets NNS , , liabilities NNS , , revenues NNS and CC expenses NNS . SENT The DT Company NN evaluates VVZ the DT estimates NNS periodically RB , , including VVG those DT relating VVG to TO metals NNS awaiting VVG settlement NN , , inventories NNS , , future JJ tax NN assets NNS and CC liabilities NNS , , and CC mining NN properties NNS . SENT In IN making VVG judgments NNS about IN the DT carrying VVG value NN of IN assets NNS and CC liabilities NNS , , the DT Company NN uses VVZ estimates NNS based VVN on IN historical JJ experience NN and CC various JJ assumptions NNS that WDT are VBP considered VVN reasonable JJ in IN the DT circumstances NNS . SENT Actual JJ results NNS may MD differ VV from IN these DT estimates NNS . SENT The DT Company NN believes VVZ the DT following VVG critical JJ accounting NN policies NNS relate VVP to TO its PP$ more JJR significant JJ judgments NNS and CC estimates NNS used VVN in IN the DT preparation NN of IN its PP$ consolidated JJ financial JJ statements NNS . SENT Management NP has VHZ discussed VVN the DT development NN and CC selection NN of IN the DT following VVG critical JJ accounting NN policies NNS with IN the DT Audit NP Committee NP of IN the DT Board NP of IN Directors NPS and CC the DT Audit NP Committee NP has VHZ reviewed VVN the DT Company's NP disclosure NN in IN this DT Operating NP and CC Financial NP Review NP . SENT Mining NP Properties NPS The DT Company NN capitalizes VVZ the DT cost NN of IN acquiring VVG land NN and CC mineral NN rights NNS . SENT If IN a DT mineable JJ ore NN body NN is VBZ discovered VVN , , such JJ costs NNS are VBP amortized VVN when WRB production NN begins VVZ , , using VVG the DT units NNS of IN production NN method NN based VVN on IN proven JJ and CC probable JJ reserves NNS . SENT If IN no DT mineable JJ ore NN body NN is VBZ discovered VVN , , such JJ costs NNS are VBP expensed VVN in IN the DT period NN in IN which WDT it PP is VBZ determined VVN the DT property NN has VHZ no DT future JJ economic JJ value NN . SENT Costs NNS for IN grassroots NNS exploration NN are VBP charged VVN to TO income NN when WRB incurred VVN until IN an DT ore NN body NN is VBZ discovered VVN . SENT Further JJR exploration NN and CC development NN to TO delineate VV costs NNS of IN the DT ore NN body NN are VBP capitalized VVN as IN mine JJ development NN costs NNS once IN a DT feasibility NN study NN is VBZ successfully RB completed VVN and CC proven VVN and CC probable JJ reserves NNS are VBP established VVN . SENT 45 CD Mine NP development NN costs NNS incurred VVN after IN the DT commencement NN of IN production NN are VBP capitalized VVN or CC deferred VVN to TO the DT extent NN that IN these DT costs NNS benefit VVP the DT entire JJ ore NN body NN . SENT Costs NNS incurred VVD to TO access VV single JJ ore NN blocks NNS are VBP expensed VVN as IN incurred VVN . SENT otherwise RB , , such JJ vertical JJ and CC horizontal JJ developments NNS are VBP classified VVN as IN mine JJ development NN costs NNS . SENT Expenditures NNS for IN new JJ facilities NNS and CC improvements NNS that WDT can MD extend VV the DT useful JJ lives NNS of IN existing JJ facilities NNS are VBP capitalized VVN as IN plant NN and CC equipment NN at IN cost NN . SENT Interest NN costs NNS incurred VVD prior RB to TO the DT commencement NN of IN commercial JJ production NN are VBP capitalized VVN . SENT Subsequent JJ capital NN expenditures NNS which WDT benefit VVP future JJ periods NNS , , such JJ as IN the DT construction NN of IN underground JJ infrastructure NN , , are VBP capitalized VVN at IN cost NN and CC depreciated VVD as RB mentioned VVN above IN . SENT The DT carrying VVG values NNS of IN mining NN properties NNS , , plant NN and CC equipment NN and CC mine NN development NN costs NNS are VBP reviewed VVN periodically RB , , when WRB impairment NN factors NNS exist VVP , , for IN possible JJ impairment NN , , based VVN on IN the DT future JJ undiscounted JJ net JJ cash NN flows NNS of IN the DT operating VVG mine NN and CC development NN property NN . SENT If IN it PP is VBZ determined VVN that IN the DT estimated JJ net JJ recoverable JJ amount NN is VBZ less JJR than IN the DT carrying VVG value NN , , then RB a DT write VV down RP to TO the DT estimated JJ fair JJ value NN amount NN is VBZ made VVN with IN a DT charge NN to TO income NN . SENT Estimated VVN future JJ cash NN flows NNS of IN operating VVG mine NN and CC development NN properties NNS include VVP estimates NNS of IN recoverable JJ ounces NNS of IN gold NN based VVN on IN the DT proven JJ and CC probable JJ reserves NNS . SENT To TO the DT extent NN economic JJ value NN exists VVZ beyond IN the DT proven JJ and CC probable JJ reserves NNS of IN an DT operating VVG mine NN or CC development NN property NN , , this DT value NN is VBZ included VVN as IN part NN of IN the DT estimated JJ future JJ cash NN flows NNS . SENT Estimated VVN future JJ cash NN flows VVZ also RB involve VV estimates NNS regarding VVG gold JJ prices NNS considering VVG current JJ and CC historical JJ prices NNS , , price NN trends NNS and CC related JJ factors NNS , , production NN levels NNS , , capital NN and CC reclamation NN costs NNS and CC related JJ income NN and CC mining NN taxes NNS , , all RB based VVN on IN detailed JJ engineering NN life NN of IN mine NN plans NNS . SENT Cash NN flows NNS are VBP subject JJ to TO risks NNS and CC uncertainties NNS and CC changes NNS in IN the DT estimates NNS of IN the DT cash NN flows NNS could MD affect VV the DT recoverability NN of IN long JJ lived VVN assets NNS . SENT Revenue NP Recognition NP Revenue NN is VBZ recognized VVN when WRB the DT following VVG conditions NNS are VBP met VVN . SENT a DT persuasive JJ evidence NN of IN an DT arrangement NN to TO purchase NN exists VVZ . SENT b SYM the DT price NN is VBZ determinable JJ . SENT c SYM the DT product NN has VHZ been VBN delivered VVN . SENT and CC d NN collection NN of IN the DT sales NNS price NN is VBZ reasonably RB assured VVN . SENT Revenue NN from IN gold NN and CC silver NN in IN the DT form NN of IN dore NP bars NNS is VBZ recorded VVN when WRB the DT refined JJ gold NN and CC silver NN is VBZ sold VVN . SENT Generally RB all PDT the DT gold NN and CC silver NN in IN the DT form NN of IN dore NP bars NNS recovered VVD in IN the DT Company's NP milling NN process NN is VBZ sold VVN in IN the DT period NN in IN which WDT it PP is VBZ produced VVN . SENT Under IN the DT terms NNS of IN concentrate NN sales NNS contracts NNS with IN third JJ party NN smelters NNS , , final JJ prices NNS for IN the DT gold NN , , silver NN , , zinc NN and CC copper NN in IN the DT concentrate NN are VBP set VVN based VVN on IN the DT prevailing JJ spot NN market NN metal NN prices NNS on IN a DT specified JJ future JJ date NN based VVN on IN the DT date NN that IN the DT concentrate NN is VBZ delivered VVN to TO the DT smelter NN . SENT Agnico NP Eagle NP records VVZ revenues NNS under IN these DT contracts NNS based VVN on IN forward JJ prices NNS at IN the DT time NN of IN delivery NN , , which WDT is VBZ when WRB transfer NN of IN legal JJ title NN to TO concentrate VV passes NNS to TO the DT third JJ party NN smelters NNS . SENT The DT terms NNS of IN the DT contracts NNS result NN in IN differences NNS between IN the DT recorded JJ estimated JJ price NN at IN delivery NN and CC the DT final JJ settlement NN price NN . SENT These DT differences NNS are VBP adjusted VVN through IN revenue NN at IN each DT subsequent JJ financial JJ statement NN date NN . SENT Revenues NNS from IN mining NN operations NNS consist VVP of IN gold NN revenues NNS , , net JJ of IN smelting VVG , , refining NN and CC other JJ marketing NN charges NNS . SENT Revenues NNS from IN byproduct NN sales NNS are VBP shown VVN net JJ of IN smelter NN charges NNS as IN part NN of IN revenues NNS from IN mining NN operations NNS . SENT Reclamation NN Obligations NNS Estimated VVN reclamation NN costs NNS are VBP based VVN on IN legal JJ , , environmental JJ and CC regulatory JJ requirements NNS . SENT Current JJ accounting NN standards NNS require VVP the DT Company NN to TO recognize VV the DT present JJ value NN of IN mine JJ reclamation NN costs NNS as IN a DT liability NN in IN the DT period NN the DT obligation NN is VBZ incurred VVN and CC to TO periodically RB re IN evaluate VV the DT liability NN . SENT At IN the DT date NN a DT reclamation NN liability NN is VBZ incurred VVN , , an DT amount NN equal JJ to TO the DT present JJ value NN of IN the DT final JJ liability NN is VBZ recorded VVN as IN an DT increase NN to TO the DT carrying VVG value NN of IN the DT related JJ long JJ lived VVN asset NN . SENT Each DT period NN , , an DT accretion NN amount NN is VBZ charged VVN to TO income NN to TO adjust VV the DT liability NN to TO the DT estimated JJ future JJ value NN . SENT The DT initial JJ liability NN , , which WDT is VBZ included VVN in IN the DT carrying VVG value NN of IN the DT asset NN , , is VBZ also RB depreciated VVD each DT period NN based VVN on IN the DT depreciation NN method NN used VVN for IN that DT asset NN . SENT In IN order NN to TO calculate VV the DT present JJ value NN of IN mine JJ reclamation NN costs NNS , , the DT Company NN has VHZ made VVN estimates NNS of IN the DT final JJ reclamation NN costs NNS based VVN on IN mine JJ closure NN plans NNS approved VVN by IN environmental JJ agencies NNS . SENT Agnico NP Eagle NP periodically RB reviews VVZ these DT estimates NNS 46 CD and CC updates NNS reclamation NN cost NN estimates NNS if IN assumptions NNS change VVP . SENT Material NN assumptions NNS that WDT are VBP made VVN in IN deriving VVG these DT estimates NNS include VVP variables NNS such JJ as IN mine NN life NN and CC inflation NN rates NNS . SENT Future JJ Tax NN Assets NNS and CC Liabilities NNS The DT Company NN uses VVZ the DT liability NN method NN of IN tax NN allocation NN for IN accounting NN for IN income NN taxes NNS . SENT Under IN the DT liability NN method NN , , future JJ tax NN assets NNS and CC liabilities NNS are VBP determined VVN based VVN on IN differences NNS between IN the DT financial JJ reporting NN and CC tax NN bases NNS of IN assets NNS and CC liabilities NNS . SENT Future JJ tax NN assets NNS are VBP reduced VVN by IN a DT valuation NN allowance NN if IN it PP is VBZ more RBR likely JJ than IN not RB that IN some DT or CC all DT of IN the DT future JJ tax NN asset NN will MD not RB be VB realized VVN . SENT The DT Company NN evaluates VVZ the DT carrying VVG value NN of IN its PP$ future JJ tax NN assets NNS quarterly JJ by IN assessing VVG its PP$ valuation NN allowance NN and CC by IN adjusting VVG the DT amount NN of IN such JJ allowance NN , , if IN necessary JJ . SENT The DT factors NNS used VVN to TO assess VV the DT likelihood NN of IN realization NN are VBP forecasts NNS of IN future JJ taxable JJ income NN and CC available JJ tax NN planning VVG strategies NNS that WDT could MD be VB implemented VVN to TO realize VV future JJ tax NN assets NNS . SENT Financial NP Instruments NPS Agnico NP Eagle NP uses VVZ derivative JJ financial JJ instruments NNS , , primarily RB option NN contracts NNS , , to TO manage VV exposure NN to TO fluctuations NNS in IN metal NN prices NNS , , foreign JJ currency NN exchange NN rates NNS and CC interest NN rates NNS . SENT Under IN the DT Company's NP treasury NN management NN system NN which WDT complies VVZ with IN Statement NN of IN Financial NP Accounting NP Standard NP FAS NP 133 CD requirements NNS for IN hedge JJ accounting NN , , unrealized JJ mark NN to TO market NN losses NNS on IN gold JJ put VVN option NN contracts NNS are VBP originally RB recorded VVN in IN equity NN as IN a DT component NN of IN accumulated VVN other JJ comprehensive JJ loss NN . SENT On IN the DT contracts NNS scheduled VVN maturity NN dates NNS , , the DT realization NN of IN losses NNS on IN these DT contracts NNS is VBZ reflected VVN by IN removing VVG the DT accumulated VVN mark NN to TO market NN losses NNS from IN accumulated VVN other JJ comprehensive JJ loss NN and CC recording VVG these DT losses NNS as IN part NN of IN normal JJ income NN . SENT All PDT the DT Company's NP hedging NN contracts NNS on IN byproduct NN production NN were VBD liquidated VVN in IN 2003 CD with IN a DT corresponding JJ charge NN being VBG recorded VVN in IN income NN . SENT Effective JJ January NP 1 CD , , 2003 CD , , foreign JJ currency NN hedges NNS also RB qualified VVN for IN hedge JJ accounting NN and CC as RB such JJ are VBP now RB being VBG accounted VVN for IN in IN the DT same JJ manner NN as IN the DT gold NN puts VVZ . SENT Unrealized JJ mark NN to TO market NN gains NNS and CC losses NNS on IN these DT hedges NNS are VBP recorded VVN in IN accumulated VVN other JJ comprehensive JJ loss NN and CC realized VVN gains NNS and CC losses NNS are VBP recorded VVN in IN income NN in IN the DT same JJ period NN the DT hedged VVN transaction NN affects VVZ income NN , , or CC on IN the DT scheduled VVN maturity NN dates NNS . SENT Prior RB to TO 2003 CD , , unrealized JJ mark NN to TO market NN gains NNS and CC losses NNS on IN foreign JJ currency NN hedges NNS were VBD recorded VVN in IN income NN . SENT In IN late JJ 2003 CD , , the DT Company NN entered VVN into IN interest NN rate NN swap NN arrangements NNS whereby WRB it PP swapped VVD its PP$ fixed JJ rate NN payments NNS on IN the DT convertible JJ subordinated JJ debentures NNS for IN variable JJ rate NN payments NNS . SENT The DT fair JJ value NN of IN the DT swap NN is VBZ recorded VVN as IN an DT asset NN or CC liability NN with IN a DT corresponding JJ charge NN to TO income NN . SENT The DT carrying VVG value NN of IN the DT Convertible JJ Debentures NNS is VBZ also RB adjusted VVN for IN changes NNS in IN fair JJ value NN attributable JJ to TO the DT risk NN being VBG hedged VVN with IN a DT corresponding JJ charge NN to TO income NN . SENT In IN connection NN with IN the DT swap NN , , the DT Company NN also RB entered VVD into IN an DT interest NN rate NN cap NN to TO limit VV the DT interest NN rate NN charged VVN under IN the DT swap NN to TO 3 CD . SENT 38 CD . SENT The DT fair JJ value NN of IN the DT swap NN is VBZ recorded VVN as IN an DT asset NN or CC a DT liability NN with IN a DT corresponding JJ charge NN to TO income NN . SENT Stock NN Based VVN Compensation NN In IN 2003 CD , , the DT Company NN prospectively RB adopted VVN FAS NP 123 CD , , Accounting NP for IN Stock NP Based VVN Compensation NN as IN amended VVN by IN FAS NP 148 CD , , Accounting NP for IN Stock NP Based VVN Compensation NN Transition NN and CC Disclosure NN . SENT These DT accounting NN standards NNS recommend VVP the DT expensing VVG of IN stock NN option NN grants NNS after IN January NP 1 CD , , 2003 CD . SENT The DT standards NNS recommend VVP that IN the DT fair JJ value NN of IN stock NN options NNS be VB recognized VVN in IN income NN over IN the DT applicable JJ vesting VVG period NN as IN a DT compensation NN expense NN . SENT The DT Company's NP existing JJ stock NN based VVN compensation NN plan NN provides VVZ for IN the DT granting VVG of IN options NNS to TO directors NNS , , officers NNS , , employees NNS and CC service NN providers NNS to TO purchase VV common JJ shares NNS . SENT Share NN options NNS have VHP exercise NN prices NNS equal JJ to TO market NN price NN at IN the DT grant NN date NN or CC over IN the DT life NN of IN the DT applicable JJ vesting VVG period NN depending VVG on IN the DT terms NNS of IN the DT option NN agreements NNS . SENT The DT fair JJ value NN of IN these DT stock NN options NNS is VBZ recorded VVN as IN an DT expense NN on IN the DT date NN of IN grant NN . SENT Fair JJ value NN is VBZ determined VVN using VVG the DT Black NP Scholes NP option NN valuation NN model NN which WDT requires VVZ the DT Company NN to TO estimate VV the DT expected VVN volatility NN of IN the DT Company's NP share NN price NN and CC the DT expected VVN life NN of IN the DT stock NN options NNS . SENT Limitations NNS with IN existing VVG option NN valuation NN models NNS and CC the DT inherent JJ difficulties NNS associated VVN with IN estimating VVG these DT variables NNS creates VVZ difficulties NNS in IN determining VVG a DT reliable JJ single JJ measure NN of IN the DT fair JJ value NN of IN stock NN option NN grants NNS . SENT The DT dilutive JJ impact NN of IN stock NN option NN grants NNS is VBZ currently RB factored VVN into IN the DT Company's NP reported VVD diluted JJ income NN loss NN per IN share NN . SENT In IN December NP 2004 CD , , the DT Financial NP Accounting NP Standards NPS Board NP FASB NP enacted VVN FAS NP 123 CD revised VVD 2004 CD FAS NP 123 CD R NN , , Share NN Based VVN Payment NN , , which WDT replaces VVZ FAS NP 123 CD , , Accounting NP for IN Stock NP Based VVN Compensation NN and CC supersedes VVZ APB NP Opinion NP No NP . SENT 25 CD APB NP 25 CD , , Accounting NP for IN Stock NP Issued VVD to TO Employees NNS . SENT FAS NP 123 CD R NN requires VVZ the DT 47 CD measurement NN of IN all DT employee NN share NN based VVN payments NNS to TO employees NNS , , including VVG grants NNS of IN employee NN stock NN options NNS , , using VVG a DT fair JJ value NN based VVN method NN and CC the DT recording NN of IN such JJ expense NN in IN the DT statement NN of IN income NN loss NN . SENT The DT accounting NN provisions NNS of IN FAS NP 123 CD R NN are VBP effective JJ for IN reporting VVG periods NNS beginning VVG after IN June NP 15 CD , , 2005 CD . SENT Agnico NP Eagle NP is VBZ required VVN to TO adopt VV FAS NP 123 CD R NN in IN the DT third JJ quarter NN of IN 2005 CD . SENT Although IN the DT Company NN has VHZ recorded VVN the DT fair JJ value NN of IN stock NN options NNS in IN income NN in IN 2003 CD and CC 2004 CD , , FAS NP 123 CD R NN requires VVZ that DT fair JJ value NN accounting NN be VB applied VVN to TO any DT stock NN options NNS that WDT were VBD granted VVN or CC modified VVN since IN January NP 1 CD , , 1995 CD . SENT The DT Company NN is VBZ currently RB evaluating VVG the DT requirements NNS under IN FAS NP 123 CD R NN and CC expects VVZ the DT adoption NN to TO have VH a DT significant JJ impact NN on IN the DT statement NN of IN income NN loss NN and CC income NN per IN share NN , , but CC no DT impact NN on IN financial JJ condition NN or CC cash NN flows NNS . SENT 48 CD Summarized VVD Quarterly JJ Data NP March NP 31 CD , , 2003 CD June NP 30 CD , , 2003 CD September NP 30 CD , , 2003 CD December NP 31 CD , , 2003 CD Total JJ 2003 CD Consolidated NP Financial NP Data NP thousands NNS of IN United NP States NPS dollars NNS , , except IN where WRB noted VVN Income NN and CC cash NN flows VVZ LaRonde NP Division NP Revenues NNS from IN mining NN operation NN 30 CD , , 112 CD 30 CD , , 014 CD 24 CD , , 845 CD 41 CD , , 849 CD 126 CD , , 820 CD Production NP costs NNS 24 CD , , 347 CD 24 CD , , 581 CD 25 CD , , 909 CD 30 CD , , 153 CD 104 CD , , 990 CD Gross NP profit NN exclusive JJ of IN amortization NN shown VVN below IN 5 CD , , 765 CD 5 CD , , 433 CD 1 CD , , 064 CD 11 CD , , 696 CD 21 CD , , 830 CD Amortization NN 4 CD , , 517 CD 4 CD , , 787 CD 4 CD , , 471 CD 3 CD , , 729 CD 17 CD , , 504 CD Gross NP profit NN 1 CD , , 248 CD 646 CD 5 CD , , 535 CD 7 CD , , 967 CD 4 CD , , 326 CD Net JJ income NN for IN the DT period NN 6 CD , , 237 CD 3 CD , , 779 CD 11 CD , , 869 CD 2 CD , , 387 CD 19 CD , , 498 CD Net JJ income NN per IN share NN basic JJ and CC fully RB diluted JJ 0 CD . SENT 07 CD 0 CD . SENT 05 CD 0 CD . SENT 14 CD 0 CD . SENT 03 CD 0 CD . SENT 23 CD Operating NN cash NN flow NN 612 CD 2 CD , , 823 CD 761 CD 5 CD , , 703 CD 4 CD , , 253 CD Investing NN cash NN flow NN 11 CD , , 025 CD 18 CD , , 370 CD 62 CD , , 542 CD 13 CD , , 970 CD 105 CD , , 907 CD Financing NP cash NN flow NN 1 CD , , 236 CD 1 CD , , 125 CD 4 CD , , 640 CD 910 CD 5 CD , , 439 CD Weighted JJ average JJ number NN of IN common JJ shares NNS outstanding JJ in IN thousands NNS 83 CD , , 725 CD 83 CD , , 836 CD 83 CD , , 954 CD 84 CD , , 424 CD 83 CD , , 889 CD Tons NNS of IN ore NN milled VVD 602 CD , , 633 CD 648 CD , , 292 CD 570 CD , , 661 CD 626 CD , , 994 CD 2 CD , , 448 CD , , 580 CD Head NP grades NNS . SENT Gold NN ounces NNS per IN ton NN 0 CD . SENT 10 CD 0 CD . SENT 10 CD 0 CD . SENT 10 CD 0 CD . SENT 12 CD 0 CD . SENT 11 CD Silver JJ ounces NNS per IN ton NN 2 CD . SENT 44 CD 2 CD . SENT 24 CD 1 CD . SENT 69 CD 2 CD . SENT 22 CD 2 CD . SENT 16 CD Zinc NN 3 CD . SENT 55 CD 3 CD . SENT 14 CD 2 CD . SENT 71 CD 2 CD . SENT 87 CD 3 CD . SENT 10 CD Copper NN 0 CD . SENT 45 CD 0 CD . SENT 52 CD 0 CD . SENT 62 CD 0 CD . SENT 66 CD 0 CD . SENT 55 CD Recovery NP rates NNS . SENT Gold NP 91 CD . SENT 66 CD 90 CD . SENT 62 CD 91 CD . SENT 60 CD 91 CD . SENT 79 CD 91 CD . SENT 41 CD Silver NN 83 CD . SENT 80 CD 80 CD . SENT 80 CD 79 CD . SENT 79 CD 85 CD . SENT 80 CD 82 CD . SENT 60 CD Zinc NN 78 CD . SENT 20 CD 77 CD . SENT 80 CD 75 CD . SENT 00 CD 81 CD . SENT 60 CD 78 CD . SENT 20 CD Copper NN 79 CD . SENT 10 CD 79 CD . SENT 20 CD 79 CD . SENT 90 CD 82 CD . SENT 50 CD 80 CD . SENT 30 CD Payable JJ production NN . SENT Gold NN ounces NNS 55 CD , , 005 CD 60 CD , , 157 CD 51 CD , , 192 CD 70 CD , , 299 CD 236 CD , , 653 CD Silver NN ounces NNS in IN thousands NNS 1 CD , , 036 CD 1 CD , , 049 CD 648 CD 1 CD , , 220 CD 3 CD , , 953 CD Zinc NN pounds NNS in IN thousands NNS 27 CD , , 964 CD 27 CD , , 080 CD 20 CD , , 561 CD 24 CD , , 732 CD 100 CD , , 337 CD Copper NN pounds NNS in IN thousands NNS 3 CD , , 956 CD 5 CD , , 015 CD 5 CD , , 411 CD 5 CD , , 749 CD 20 CD , , 131 CD Realized VVD prices NNS US NP . SENT Gold NN per IN ounce NN 350 CD 349 CD 365 JJ 395 CD 368 CD Silver NN per IN ounce NN 4 CD . SENT 70 CD 4 CD . SENT 57 CD 5 CD . SENT 04 CD 5 CD . SENT 27 CD 5 CD . SENT 07 CD Zinc NN per IN pound NN 0 CD . SENT 35 CD 0 CD . SENT 35 CD 0 CD . SENT 37 CD 0 CD . SENT 43 CD 0 CD . SENT 38 CD Copper NN per IN pound NN 0 CD . SENT 76 CD 0 CD . SENT 73 CD 0 CD . SENT 80 CD 0 CD . SENT 94 CD 0 CD . SENT 82 CD Total JJ production NN costs NNS per IN gold JJ ounce NN produced VVN US NP . SENT Minesite NN costs NNS including VVG reclamation NN provision NN 378 CD 371 CD 451 JJ 372 CD 390 CD Less JJR . SENT Reclamation NN provision NN 2 CD 2 CD 2 CD 3 CD 2 CD Net JJ byproduct NN revenues NNS 207 CD 161 CD 140 JJ 189 CD 173 CD Cash NP costs NNS 169 CD 208 CD 309 JJ 180 CD 215 CD El NP Coco NP royalty NN 74 CD 50 CD 59 JJ 40 CD 54 CD Total JJ cash NN costs NNS 1 CD 243 CD 258 JJ 368 CD 220 CD 269 CD Other JJ costs NNS . SENT Reclamation NN provision NN 2 CD 2 CD 2 CD 3 CD 2 CD Amortization NN 82 CD 80 CD 87 JJ 53 CD 74 CD Total JJ production NN costs NNS 327 CD 340 CD 457 JJ 276 CD 345 CD Minesite JJ costs NNS per IN ton NN milled VVN C NP 1 CD C NP 52 CD C NP 48 CD C NP 56 CD C NP 54 CD C NP 52 CD Note NN . SENT 1 CD Minesite JJ costs NNS per IN ton NN milled JJ and CC total JJ cash NN costs NNS per IN ounce NN are VBP non JJ GAAP NP measures NNS of IN performance NN that IN the DT Company NN uses VVZ to TO monitor VV the DT performance NN of IN its PP$ operations NNS . SENT See VV Item NN 5 CD . SENT Operating NP and CC Financial NP Review NP and CC Prospects NNS Results NNS of IN Operations NP Production NP Costs NNS . SENT 49 CD March NP 31 CD , , 2004 CD June NP 30 CD , , 2004 CD September NP 30 CD , , 2004 CD December NP 31 CD , , 2004 CD Total JJ 2004 CD Consolidated NP Financial NP Data NP thousands NNS of IN United NP States NPS dollars NNS , , except IN where WRB noted VVN Income NN and CC cash NN flows VVZ LaRonde NP Division NP Revenues NNS from IN mining NN operations NNS 48 CD , , 604 CD 45 CD , , 664 CD 47 CD , , 986 CD 45 CD , , 795 CD 188 CD , , 049 CD Production NP costs NNS 24 CD , , 141 CD 25 CD , , 680 CD 26 CD , , 172 CD 22 CD , , 175 CD 98 CD , , 168 CD Gross NP profit NN exclusive JJ of IN amortization NN shown VVN below IN 24 CD , , 463 CD 19 CD , , 984 CD 21 CD , , 814 CD 23 CD , , 620 CD 89 CD , , 881 CD Amortization NN 5 CD , , 582 CD 5 CD , , 859 CD 5 CD , , 861 CD 4 CD , , 461 CD 21 CD , , 763 CD Gross NP profit NN 18 CD , , 881 CD 14 CD , , 125 CD 15 CD , , 953 CD 19 CD , , 159 CD 68 CD , , 118 CD Net JJ income NN loss NN for IN the DT period NN 12 CD , , 909 CD 8 CD , , 805 CD 10 CD , , 556 CD 15 CD , , 609 CD 47 CD , , 879 CD Net JJ income NN loss NN per IN share NN basic JJ and CC fully RB diluted JJ 0 CD . SENT 15 CD 0 CD . SENT 11 CD 0 CD . SENT 12 CD 0 CD . SENT 18 CD 0 CD . SENT 56 CD Operating NN cash NN flow NN 6 CD , , 219 CD 14 CD , , 901 CD 16 CD , , 683 CD 11 CD , , 722 CD 49 CD , , 525 CD Investing NN cash NN flow NN 41 CD , , 501 CD 23 CD , , 493 CD 84 CD , , 020 CD 28 CD , , 820 CD 94 CD , , 832 CD Financing NP cash NN flow NN 1 CD , , 068 CD 1 CD , , 552 CD 18 CD , , 540 CD 2 CD , , 149 CD 21 CD , , 173 CD Weighted JJ average JJ number NN of IN common JJ shares NNS outstanding JJ in IN thousands NNS 84 CD , , 525 CD 84 CD , , 648 CD 84 CD , , 791 CD 85 CD , , 989 CD 85 CD , , 157 CD Tons NNS of IN ore NN milled VVD 689 CD , , 176 CD 753 CD , , 724 CD 741 CD , , 483 CD 792 CD , , 542 CD 2 CD , , 976 CD , , 925 CD Head NP grades NNS . SENT Gold NN ounces NNS per IN ton NN 0 CD . SENT 11 CD 0 CD . SENT 09 CD 0 CD . SENT 10 CD 0 CD . SENT 10 CD 0 CD . SENT 10 CD Silver JJ ounces NNS per IN ton NN 2 CD . SENT 30 CD 2 CD . SENT 26 CD 2 CD . SENT 70 CD 2 CD . SENT 57 CD 2 CD . SENT 51 CD Zinc NN 3 CD . SENT 90 CD 3 CD . SENT 80 CD 4 CD . SENT 53 CD 4 CD . SENT 00 CD 4 CD . SENT 03 CD Copper NN 0 CD . SENT 55 CD 0 CD . SENT 54 CD 0 CD . SENT 54 CD 0 CD . SENT 52 CD 0 CD . SENT 54 CD Recovery NP rates NNS . SENT Gold NP 92 CD . SENT 19 CD 91 CD . SENT 69 CD 92 CD . SENT 09 CD 90 CD . SENT 39 CD 91 CD . SENT 49 CD Silver NN 84 CD . SENT 93 CD 85 CD . SENT 88 CD 88 CD . SENT 10 CD 86 CD . SENT 20 CD 86 CD . SENT 50 CD Zinc NN 8181 CD 83 CD . SENT 37 CD 84 CD . SENT 70 CD 82 CD . SENT 00 CD 83 CD . SENT 50 CD Copper NN 79 CD . SENT 94 CD 78 CD . SENT 99 CD 78 CD . SENT 10 CD 79 CD . SENT 30 CD 78 CD . SENT 90 CD Payable JJ production NN . SENT Gold NN ounces NNS 70 CD , , 188 CD 65 CD , , 233 CD 67 CD , , 237 CD 68 CD , , 909 CD 271 CD , , 567 CD Silver NN ounces NNS in IN thousands NNS 1 CD , , 128 CD 1 CD , , 558 CD 1 CD , , 501 CD 1 CD , , 512 CD 5 CD , , 699 CD Zinc NN pounds NNS in IN thousands NNS 36 CD , , 647 CD 37 CD , , 483 CD 48 CD , , 349 CD 44 CD , , 803 CD 167 CD , , 282 CD Copper NN pounds NNS in IN thousands NNS 5 CD , , 840 CD 5 CD , , 075 CD 5 CD , , 814 CD 6 CD , , 087 CD 22 CD , , 816 CD Realized VVD prices NNS US NP . SENT Gold NN per IN ounce NN 412 CD 393 CD 409 JJ 438 CD 418 CD Silver NN per IN ounce NN 6 CD . SENT 72 CD 6 CD . SENT 22 CD 6 CD . SENT 45 CD 7 CD . SENT 32 CD 6 CD . SENT 84 CD Zinc NN per IN pound NN 0 CD . SENT 47 CD 0 CD . SENT 47 CD 0 CD . SENT 44 CD 0 CD . SENT 55 CD 0 CD . SENT 47 CD Copper NN per IN pound NN 1 CD . SENT 25 CD 1 CD . SENT 26 CD 1 CD . SENT 29 CD 1 CD . SENT 39 CD 1 CD . SENT 34 CD Total JJ production NN costs NNS per IN gold JJ ounce NN produced VVN US NP . SENT Minesite NN costs NNS including VVG reclamation NN provision NN 358 CD 394 CD 440 JJ 448 CD 406 CD Less JJR . SENT Reclamation NN provision NN 2 CD 2 CD 5 CD 2 CD 1 CD Hedging NN gains NNS 14 CD 15 CD 24 JJ 17 CD 17 CD Net JJ byproduct NN revenues NNS 264 CD 300 CD 334 JJ 420 CD 332 CD Total JJ cash NN costs NNS 1 CD 78 CD 77 JJ 77 CD 13 CD 56 CD Other JJ costs NNS . SENT Reclamation NN provision NN 2 CD 2 CD 2 CD 2 CD 1 CD Amortization NN 80 CD 90 CD 87 JJ 65 CD 80 CD Total JJ production NN costs NNS 160 CD 169 CD 166 JJ 76 CD 137 CD Minesite JJ costs NNS per IN ton NN milled VVN C NP 1 CD C NP 48 CD C NP 47 CD C NP 50 CD C NP 48 CD C NP 48 CD Note NN . SENT 1 CD Minesite JJ costs NNS per IN ton NN milled JJ and CC total JJ cash NN costs NNS per IN ounce NN are VBP non JJ GAAP NP measures NNS of IN performance NN that IN the DT Company NN uses VVZ to TO monitor VV the DT performance NN of IN its PP$ operations NNS . SENT See VV Item NN 5 CD . SENT Operating NP and CC Financial NP Review NP and CC Prospects NNS Results NNS of IN Operations NP Production NP Costs NNS . SENT 50 CD Five CD Year NN Financial NP and CC Operating VVG Summary NN 2004 CD 2003 CD 2002 JJ 2001 CD 2000 CD Financial NP Data NP thousands NNS of IN United NP States NPS dollars NNS , , except IN where WRB noted VVN Revenues NNS from IN mining NN operations NNS 188 CD , , 049 CD 126 CD , , 820 CD 108 CD , , 027 CD 96 CD , , 043 CD 63 CD , , 676 CD Interest NN and CC sundry JJ income NN 655 CD 2 CD , , 775 CD 1 CD , , 943 CD 5 CD , , 752 CD 2 CD , , 145 CD 188 CD , , 704 CD 129 CD , , 595 CD 109 CD , , 970 CD 101 CD , , 795 CD 65 CD , , 821 CD Costs NNS and CC expenses NNS 142 CD , , 671 CD 147 CD , , 708 CD 105 CD , , 359 CD 104 CD , , 651 CD 76 CD , , 595 CD Income NN loss NN before IN income NN taxes NNS 46 CD , , 033 CD 18 CD , , 113 CD 4 CD , , 611 CD 2 CD , , 856 CD 10 CD , , 774 CD Income NN and CC mining NN taxes NNS expense NN recovery NN 1 CD , , 846 CD 358 CD 588 CD 2 CD , , 862 CD 3 CD , , 906 CD Income NN loss NN before IN cumulative JJ catch NN up IN adjustment NN 47 CD , , 879 CD 17 CD , , 755 CD 4 CD , , 023 CD 5 CD , , 718 CD 6 CD , , 868 CD Cumulative JJ catch NN up IN adjustment NN relating VVG to TO FAS NP 143 CD 1 CD , , 743 CD Net JJ income NN loss NN 47 CD , , 879 CD 19 CD , , 498 CD 4 CD , , 023 CD 5 CD , , 718 CD 6 CD , , 868 CD Net JJ income NN loss NN per IN share NN 0 CD . SENT 56 CD 0 CD . SENT 23 CD 0 CD . SENT 06 CD 0 CD . SENT 09 CD 0 CD . SENT 12 CD Operating NN cash NN flow NN 49 CD , , 525 CD 4 CD , , 253 CD 13 CD , , 112 CD 4 CD , , 179 CD 2 CD , , 587 CD Investing NN cash NN flow NN 94 CD , , 832 CD 105 CD , , 907 CD 66 CD , , 609 CD 36 CD , , 556 CD 69 CD , , 686 CD Financing NP cash NN flow NN 21 CD , , 173 CD 5 CD , , 439 CD 185 CD , , 325 CD 48 CD , , 567 CD 58 CD , , 371 CD Dividends NNS declared VVN per IN share NN 0 CD . SENT 03 CD 0 CD . SENT 03 CD 0 CD . SENT 03 CD 0 CD . SENT 02 CD 0 CD . SENT 02 CD Capital NP expenditures NNS 53 CD , , 318 CD 42 CD , , 038 CD 64 CD , , 836 CD 36 CD , , 278 CD 69 CD , , 640 CD Average JJ gold NN price NN per IN ounce NN realized VVD 418 CD 368 CD 312 JJ 273 CD 278 CD Average JJ exchange NN rate NN US NP per IN C NP 0 CD . SENT 7682 CD 0 CD . SENT 7137 CD 0 CD . SENT 6368 CD 0 CD . SENT 6458 CD 0 CD . SENT 6723 CD Weighted JJ average JJ number NN of IN common JJ shares NNS outstanding JJ in IN thousands NNS 85 CD , , 157 CD 83 CD , , 889 CD 70 CD , , 821 CD 61 CD , , 334 CD 54 CD , , 447 CD Working NP capital NN including VVG undrawn NN credit NN lines NNS 266 CD , , 305 CD 240 CD , , 613 CD 285 CD , , 142 CD 135 CD , , 908 CD 49 CD , , 733 CD Total JJ assets NNS 718 CD , , 164 CD 637 CD , , 101 CD 593 CD , , 807 CD 393 CD , , 464 CD 64 CD , , 333 CD Long JJ term NN debt NN 141 CD , , 495 CD 143 CD , , 750 CD 143 CD , , 750 CD 151 CD , , 081 CD 186 CD , , 261 CD Shareholders NNS equity NN 470 CD , , 226 CD 400 CD , , 723 CD 397 CD , , 693 CD 198 CD , , 426 CD 118 CD , , 585 CD Operating NN Summary NN thousands NNS of IN United NP States NPS dollars NNS , , except IN where WRB noted VVD LaRonde NP Division NP Revenues NNS from IN mining NN operations NNS 188 CD , , 049 CD 126 CD , , 820 CD 108 CD , , 027 CD 96 CD , , 043 CD 63 CD , , 676 CD Production NP costs NNS 98 CD , , 168 CD 104 CD , , 990 CD 75 CD , , 969 CD 67 CD , , 009 CD 49 CD , , 997 CD Gross NP profit NN exclusive JJ of IN amortization NN shown VVN below IN 89 CD , , 881 CD 21 CD , , 830 CD 32 CD , , 058 CD 29 CD , , 034 CD 13 CD , , 679 CD Amortization NN 21 CD , , 763 CD 17 CD , , 504 CD 12 CD , , 998 CD 12 CD , , 658 CD 9 CD , , 220 CD Gross NP profit NN 68 CD , , 118 CD 4 CD , , 326 CD 19 CD , , 060 CD 16 CD , , 376 CD 4 CD , , 459 CD Tons NNS of IN ore NN milled VVD 2 CD , , 976 CD , , 925 CD 2 CD , , 448 CD , , 580 CD 1 CD , , 963 CD , , 129 CD 1 CD , , 805 CD , , 249 CD 1 CD , , 415 CD , , 888 CD Gold NP ounces NNS per IN ton NN 0 CD . SENT 10 CD 0 CD . SENT 11 CD 0 CD . SENT 14 CD 0 CD . SENT 15 CD 0 CD . SENT 14 CD Gold NP production NN ounces NNS 271 CD , , 567 CD 236 CD , , 653 CD 260 CD , , 184 CD 234 CD , , 860 CD 173 CD , , 852 CD Silver NN production NN ounces NNS in IN thousands NNS 5 CD , , 699 CD 3 CD , , 953 CD 3 CD , , 084 CD 2 CD , , 524 CD 1 CD , , 128 CD Zinc NN production NN pounds NNS in IN thousands NNS 167 CD , , 282 CD 100 CD , , 337 CD 108 CD , , 060 CD 126 CD , , 275 CD 50 CD , , 681 CD Copper NN production NN pounds NNS in IN thousands NNS 22 CD , , 816 CD 20 CD , , 131 CD 8 CD , , 927 CD 4 CD , , 097 CD 4 CD , , 943 CD Total JJ production NN costs NNS per IN gold JJ ounce NN produced VVN US NP . SENT Minesite NN costs NNS including VVG reclamation NN provision NN 406 CD 390 CD 253 JJ 257 CD 294 CD Less JJR . SENT Reclamation NN provision NN 1 CD 2 CD 5 CD 5 CD 3 CD Hedging NN gains VVZ 17 CD Net JJ byproduct NN revenues NNS 332 CD 173 CD 107 JJ 120 CD 103 CD Cash NP costs NNS 56 CD 215 CD 141 JJ 132 CD 188 CD El NP Coco NP royalty NN 54 CD 41 CD 23 CD Total JJ cash NN costs NNS 56 CD 269 CD 182 JJ 155 CD 188 CD Other JJ costs NNS . SENT Reclamation NN provision NN 1 CD 2 CD 5 CD 5 CD 3 CD Amortization NN 80 CD 74 CD 50 JJ 45 CD 33 CD Total JJ production NN costs NNS 137 CD 345 CD 237 JJ 205 CD 224 CD Minesite JJ costs NNS per IN ton NN milled VVN C NP C NP 48 CD C NP 52 CD C NP 52 CD C NP 52 CD C NP 54 CD Gold NP reserves NNS and CC resources NNS . SENT Total JJ Proven JJ and CC Probable JJ Reserves NNS thousands NNS , , ounces NNS of IN gold NN 7 CD , , 903 CD 7 CD , , 864 CD 4 CD , , 022 CD 3 CD , , 267 CD 3 CD , , 256 CD 51 CD Agnico NP Eagle NP Mineral NP Reserve NP Data NP Category NN and CC Zone NP Au NP oz NP t NN Ag NP oz NP t NN Cu NP Zn NP Au NP 000 CD s PP oz NP . SENT Tons NNS 000 CD s NN Proven VVN Mineral NP Reserve NP . SENT LaRonde NP I NP 0 CD . SENT 09 CD 2 CD . SENT 65 CD 0 CD . SENT 43 CD 4 CD . SENT 46 CD 590 CD 6 CD , , 493 CD Subtotal NN Proven VVN Mineral NP Reserve NP 0 CD . SENT 09 CD 590 CD 6 CD , , 493 CD Probable JJ Mineral NP Reserve NP . SENT LaRonde NP I NP 0 CD . SENT 08 CD 2 CD . SENT 34 CD 0 CD . SENT 31 CD 4 CD . SENT 02 CD 1 CD , , 257 CD 14 CD , , 907 CD LaRonde NP II NP 0 CD . SENT 17 CD 0 CD . SENT 58 CD 0 CD . SENT 33 CD 0 CD . SENT 83 CD 3 CD , , 258 CD 19 CD , , 312 CD Lapa NP 0 CD . SENT 26 CD 1 CD , , 168 CD 4 CD , , 509 CD Goldex NP 0 CD . SENT 07 CD 1 CD , , 627 CD 22 CD , , 148 CD Bousquet NP 0 CD . SENT 06 CD 3 CD 57 CD Subtotal NN Probable JJ Mineral NP Reserve NP 0 CD . SENT 12 CD 7 CD , , 313 CD 60 CD , , 933 CD Total JJ Proven JJ and CC Probable JJ Mineral NP Reserves NNS 0 CD . SENT 12 CD 7 CD , , 903 CD 67 CD , , 426 CD Agnico NP Eagle NP Mineral NP Resource NP Data NP Category NN and CC Zone NP Au NP oz NP t NN Ag NP oz NP t NN Cu NP Zn NP Tons NNS 000 RB s PP Indicated VVD Mineral NP Resource NP . SENT LaRonde NP I NP 0 CD . SENT 07 CD 0 CD . SENT 98 CD 0 CD . SENT 17 CD 2 CD . SENT 35 CD 1 CD , , 992 CD LaRonde NP II NP 0 CD . SENT 08 CD 0 CD . SENT 64 CD 0 CD . SENT 30 CD 1 CD . SENT 00 CD 1 CD , , 980 CD Goldex NP 0 CD . SENT 07 CD 924 CD Lapa NP 0 CD . SENT 16 CD 832 CD Bousquet NP 0 CD . SENT 18 CD 1 CD , , 984 CD Ellison NP 0 CD . SENT 17 CD 273 CD Total JJ Indicated JJ Mineral NP Resource NP 0 CD . SENT 11 CD 7 CD , , 985 CD Category NN and CC Zone NP Inferred VVN Mineral NP Resource NP . SENT LaRonde NP II NP 0 CD . SENT 19 CD 0 CD . SENT 80 CD 0 CD . SENT 32 CD 2 CD . SENT 11 CD 10 CD , , 831 CD Bousquet NP 0 CD . SENT 22 CD 1 CD , , 994 CD Goldex NP 0 CD . SENT 05 CD 3 CD , , 548 CD Lapa NP 0 CD . SENT 22 CD 1 CD , , 884 CD Ellison NP 0 CD . SENT 19 CD 1 CD , , 064 CD Total NP Inferred VVN Mineral NP Resource NP 0 CD . SENT 17 CD 19 CD , , 321 CD Scientific NP and CC Technical NP Data NP Agnico NP Eagle NP Mines NP Limited NP reports VVZ mineral NN resource NN and CC reserve NN estimates NNS in IN accordance NN with IN the DT CIM NP Guidelines NNS . SENT The DT effective JJ date NN of IN each DT estimate NN is VBZ December NP 31 CD , , 2004 CD . SENT More RBR recent JJ information NN on IN exploration NN , , mining NN , , processing NN , , metallurgy NN and CC other JJ economic JJ factors NNS have VHP also RB been VBN used VVN . SENT Reserve NP estimates NNS were VBD calculated VVN using VVG historic JJ three CD year NN average JJ metals NNS prices NNS and CC foreign JJ exchange NN rates NNS in IN accordance NN with IN the DT Securities NPS and CC Exchange NP Commission's NP SEC NP Industry NP Guide NP 7 CD . SENT Industry NP Guide NP 7 CD requires VVZ the DT use NN of IN prices NNS that WDT reflect VVP current JJ economic JJ conditions NNS at IN the DT time NN of IN reserve NN determination NN which WDT staff NN of IN the DT SEC NP has VHZ interpreted VVN to TO mean VV historic JJ three CD year NN average NN prices NNS . SENT The DT assumptions NNS used VVN for IN the DT December NP 31 CD , , 2004 CD reserve NN and CC resource NN estimate NN were VBD 360 CD per IN ounce NN gold NN , , 5 CD . SENT 42 CD per IN ounce NN silver NN , , 0 CD . SENT 41 CD per IN pound NN zinc NN , , 0 CD . SENT 95 CD per IN pound NN copper NN and CC a DT C NP US NP exchange NN rate NN of IN 1 CD . SENT 42 CD . SENT There EX are VBP no RB known VVN relevant JJ issues NNS that WDT would MD materially RB affect VV the DT estimates NNS . SENT No DT independent JJ verification NN of IN the DT data NN has VHZ been VBN published VVN . SENT Tonnage NN amounts NNS and CC contained VVN metal NN amounts NNS presented VVN in IN the DT tables NNS have VHP been VBN rounded VVN to TO the DT nearest JJS thousand CD . SENT 52 CD National NP Instrument NP 43 NP 101 CD requires VVZ mining NN companies NNS to TO disclose VV reserves NNS and CC resources NNS using VVG the DT subcategories NNS of IN proven JJ reserves NNS , , probable JJ reserves NNS , , measured VVN resources NNS , , indicated JJ resources NNS and CC inferred VVN resources NNS . SENT See VV Item NN 4 CD . SENT Information NN on IN the DT Company NP Property NP , , Plant NP and CC Equipment NP Mineral NP Reserve NP and CC Mineral NP Resource NP which WDT sets VVZ out RP the DT definitions NNS of IN these DT terms NNS . SENT Mineral NN resources NNS that WDT are VBP not RB mineral NN reserves NNS do VVP not RB have VH demonstrated VVN economic JJ viability NN . SENT Investors NNS are VBP cautioned VVD not RB to TO assume VV that DT part NN or CC all DT of IN an DT inferred VVN resource NN exists VVZ , , or CC is VBZ economically RB or CC legally RB mineable JJ . SENT LaRonde NP Mine NP A DT qualified JJ person NN , , Guy NP Gosselin NP , , P NN . SENT Eng NN . SENT , , P NN . SENT Geo NP . SENT , , LaRonde NP Division's NP Chief NP Geologist NN , , has VHZ verified VVN the DT LaRonde NP exploration NN information NN disclosed VVD herein RB . SENT The DT verification NN procedures NNS , , the DT quality NN assurance NN program NN and CC quality NN control NN procedures NNS used VVN in IN preparing VVG such JJ data NNS may MD be VB found VVN in IN the DT 2005 CD LaRonde NP Mineral NP Resource NP and CC Mineral NP Reserve NP Estimate NP , , Agnico NP Eagle NP Mines NPS Limited NP , , LaRonde NP Division NP , , filed VVN on IN SEDAR NP . SENT The DT qualified JJ person NN responsible JJ for IN the DT LaRonde NP mineral NN reserve NN and CC resource NN estimate NN is VBZ Guy NP Gosselin NP , , P NN . SENT Eng NP , , P NN . SENT Geo NP . SENT , , LaRonde NP Division's NP Chief NP Geologist NN . SENT A DT description NN of IN the DT operating NN and CC capital NN cost NN assumptions NNS , , parameters NNS and CC methods NNS used VVN to TO estimate VV mineral NN reserves NNS and CC mineral NN resources NNS can MD be VB found VVN in IN the DT 2005 CD LaRonde NP Mineral NP Resource NP and CC Mineral NP Reserve NP Estimate NP . SENT LaRonde NP II NP Project NP The DT qualified JJ person NN responsible JJ for IN the DT LaRonde NP II NP pre NP feasibility NN study NN is VBZ Carol NP Plummer NP , , P NN . SENT Eng NN . SENT , , Project NP Manager NP for IN LaRonde NP II NP . SENT The DT qualified JJ person NN responsible JJ for IN the DT Lapa NP and CC Goldex NP pre NP feasibility NN studies NNS is VBZ Rosaire NP mond NP P NN . SENT Eng NN . SENT , , Regional NP Division's NP Senior NP Mining NP Engineer NN . SENT Lapa NP Project NP The DT qualified JJ person NN responsible JJ for IN the DT Lapa NP mineral NN reserve NN and CC mineral NN resource NN estimate NN is VBZ Christian NP D'Amours NP , , P NN . SENT Geo NP . SENT , , of IN Service NP Conseil NP G NP opointcom NP . SENT In IN estimating VVG the DT Lapa NP resource NN and CC reserve NN , , a DT minimum JJ gold NN grade NN cut VVD off RP of IN 0 CD . SENT 15 CD and CC 0 CD . SENT 19 CD oz NP ton NN , , respectively RB was VBD used VVN to TO evaluate VV drill NN intercepts NNS that WDT have VHP been VBN adjusted VVN to TO respect VV a DT minimum JJ mining NN width NN of IN 9 CD . SENT 2 CD ft NP . SENT The DT estimate NN was VBD derived VVN using VVG a DT three CD dimensional JJ block NN model NN of IN the DT deposit NN . SENT the DT grades NNS were VBD interpolated VVN using VVG the DT inverse JJ distance NN power NN squared VVD method NN . SENT Goldex NP Project NP The DT Goldex NP mineral NN reserve NN and CC resource NN estimate NN was VBD supervised VVN by IN Marc NP H NP . SENT Legault NP , , P NN . SENT Eng NN . SENT , , Manager NP Project NP Evaluations NNS of IN Agnico NP Eagle NP . SENT A DT qualified JJ person NN , , Carl NP Pelletier NP , , P NN . SENT Geo NP . SENT , , of IN Innovexplo NP Geological JJ Services NPS , , supervised VVD the DT preparation NN of IN and CC verified VVN the DT scientific JJ and CC technical JJ information NN regarding VVG the DT Goldex NP project NN including VVG sampling NN , , analytical JJ and CC test NN data NNS underlying VVG the DT mineral NN reserve NN and CC resource NN estimate NN . SENT A DT qualified JJ person NN , , R NP . SENT Mohan NP Srivastava NP , , P NN . SENT Geo NP . SENT , , of IN Froidevaux NP , , Srivastava NP Schofield NP Consultants NPS , , was VBD responsible JJ for IN the DT mineral NN estimate NN process NN at IN Goldex NP . SENT The DT minimum JJ gold NN grade NN cut VVD off RB used VVN to TO evaluate VV drill NN intercepts NNS at IN Goldex NP was VBD 0 CD . SENT 04 CD oz NP ton NN over IN a DT minimum JJ true JJ thickness NN of IN 50 CD feet NNS . SENT The DT reserve NN was VBD derived VVN by IN evaluating VVG a DT three CD dimensional JJ model NN of IN the DT Goldex NP Extension NP zone NN , , whose WP$ gold NN grade NN was VBD estimated VVN using VVG a DT 95 CD confidence NN interval NN grade NN calculation NN method NN , , and CC then RB adjusting VVG the DT model NN envelope NN to TO only RB include VV sectors NNS with IN a DT high JJ probability NN of IN exceeding VVG the DT cut NN off IN grade NN . SENT Bousquet NP and CC Ellison NP Properties NPS The DT qualified JJ person NN responsible JJ for IN the DT Bousquet NP and CC Ellison NP mineral NN reserve NN and CC resource NN estimates NNS is VBZ Normand NP B NP dard NN P NN . SENT Geo NP . SENT , , Regional NP Division's NP Senior NP Geologist NN . SENT In IN estimating VVG the DT Bousquet NP and CC Ellison NP mineral NN resource NN and CC reserve NN , , a DT minimum JJ gold NN grade NN cut VVD off RP of IN 0 CD . SENT 09 CD oz NP ton NN was VBD used VVN to TO evaluate VV drill NN intercepts NNS that WDT have VHP been VBN adjusted VVN to TO respect VV a DT minimum JJ mining NN width NN of IN 9 CD . SENT 8 CD ft NP . SENT The DT estimate NN was VBD derived VVN using VVG a DT combination NN of IN three CD dimensional JJ block NN modeling NN grades NNS were VBD interpolated VVN using VVG the DT inverse JJ distance NN power NN squared VVD method NN for IN certain JJ zones NNS and CC for IN other JJ zones NNS , , by IN the DT polygonal JJ method NN on IN longitudinal JJ sections NNS . SENT A DT portion NN of IN the DT resource NN estimate NN is VBZ based VVN on IN estimates NNS reported VVD when WRB the DT Bousquet NP I NN mine NN closed VVD in IN 1996 CD . SENT The DT resource NN was VBD reviewed VVN and CC reclassified VVD using VVG the DT CIM NP Guidelines NNS . SENT This DT information NN is VBZ of IN a DT good JJ quality NN and CC is VBZ considered VVN reliable JJ . SENT 53 CD ITEM NN 6 CD . SENT DIRECTORS NNS , , SENIOR JJ MANAGEMENT NN AND CC EMPLOYEES NNS Directors NNS and CC Senior NP Management NP The DT information NN under IN Election NN of IN Directors NNS on IN pages NNS 3 CD to TO 6 CD of IN Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN is VBZ incorporated VVN herein RB by IN reference NN . SENT The DT by IN laws NNS of IN the DT Company NN provide VV that WDT directors NNS shall MD hold VV office NN for IN a DT term NN expiring VVG at IN the DT next JJ annual JJ meeting NN of IN shareholders NNS after IN such JJ directors NNS election NN or CC appointment NN or CC until IN their PP$ successors NNS are VBP elected VVN or CC appointed VVN . SENT The DT Board NP of IN Directors NPS annually RB appoints VVZ the DT officers NNS of IN the DT Company NP , , who WP are VBP subject JJ to TO removal NN by IN resolution NN of IN the DT Board NP at IN any DT time NN , , with IN or CC without IN cause NN in IN the DT absence NN of IN a DT written VVN agreement NN to TO the DT contrary NN . SENT For IN information NN relating VVG to TO employment NN agreements NNS between IN the DT Company NN and CC certain JJ of IN its PP$ senior JJ officers NNS , , see VV Compensation NN of IN Officers NNS Employment NP Contracts NPS Termination NN Arrangements NNS on IN page NN 15 CD of IN Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN . SENT The DT following NN is VBZ a DT brief JJ biography NN of IN each DT of IN Agnico NP Eagle's NP directors NNS and CC senior JJ officers NNS . SENT Leanne NP M NP . SENT Baker NP , , 52 CD , , is VBZ a DT director NN of IN Agnico NP Eagle NP . SENT Dr NP . SENT Baker NP currently RB acts VVZ as IN a DT consultant NN to TO companies NNS in IN the DT mining NN and CC financial JJ services NNS industries NNS , , and CC recently RB joined VVD Investor NP Resources NPS Limited NP IRL NP as IN Managing NP Director NP , , North NP America NP . SENT IRL NP provides VVZ client NN services NNS for IN capital NN raising NN and CC financial JJ structuring NN . SENT acquisitions NNS , , joint JJ ventures NNS and CC divestitures NNS , , and CC project NN assessment NN and CC improvement NN , , almost RB exclusively RB in IN the DT resources NNS industry NN . SENT Previously RB , , Dr NP . SENT Baker NP was VBD employed VVN by IN Salomon NP Smith NP Barney NP where WRB she PP was VBD one CD of IN the DT top NN ranked VVD mining NN sector NN equity NN analysts NNS in IN the DT United NP States NPS . SENT Dr NP . SENT Baker NP is VBZ a DT graduate NN of IN the DT Colorado NP School NP of IN Mines NP M NP . SENT S NP . SENT and CC Ph NN . SENT D SYM . SENT in IN mineral NN economics NNS . SENT Dr NP . SENT Baker NP has VHZ been VBN a DT director NN of IN Agnico NP Eagle NP since IN January NP 1 CD , , 2003 CD , , and CC is VBZ also RB a DT director NN of IN New NP Sleeper NP Gold NP Corporation NP , , a DT mining NN exploration NN company NN traded VVN on IN the DT TSX NP Venture NP Exchange NP . SENT Dr NP . SENT Baker NP resides VVZ in IN Tiburon NP , , California NP . SENT Douglas NP R NP . SENT Beaumont NP , , P NN . SENT Eng NN . SENT , , 72 CD , , is VBZ a DT director NN of IN Agnico NP Eagle NP . SENT Mr NP . SENT Beaumont NP , , now RB retired VVN , , is VBZ a DT former JJ Senior NP Vice NP President NP , , Process NN Technology NN with IN SNC NP Lavalin NP . SENT Prior RB to TO that IN he PP was VBD Executive NP Vice NP President NP of IN Kilborn NP Engineering NP Construction NP Ltd NP . SENT Mr NP . SENT Beaumont NP is VBZ a DT graduate NN of IN Queen's NP University NP B NP . SENT Sc NN . SENT . SENT Mr NP . SENT Beaumont NP has VHZ been VBN a DT director NN of IN Agnico NP Eagle NP since IN February NP 25 CD , , 1997 CD . SENT Mr NP . SENT Beaumont NP is VBZ also RB a DT director NN of IN Blackhawk NP Mining NP Inc NP . SENT , , a DT gold JJ mining NN company NN traded VVN on IN the DT TSX NP . SENT Mr NP . SENT Beaumont NP resides VVZ in IN Mississauga NP , , Ontario NP . SENT Sean NP Boyd NP , , C NP . SENT A DT . SENT , , 46 CD , , is VBZ the DT President NP and CC Chief NP Executive NP Officer NP and CC a DT director NN of IN Agnico NP Eagle NP . SENT Mr NP . SENT Boyd NP has VHZ been VBN with IN Agnico NP Eagle NP since IN 1985 CD . SENT Prior RB to TO his PP$ appointment NN as IN President NP and CC Chief NP Executive NP Officer NP in IN 1998 CD , , Mr NP . SENT Boyd NP served VVD as IN Vice NP President NP and CC Chief NP Financial NP Officer NP from IN 1996 CD to TO 1998 CD , , Treasurer NN and CC Chief NP Financial NP Officer NP from IN 1990 CD to TO 1996 CD , , Secretary NP Treasurer NN during IN a DT portion NN of IN 1990 CD , , and CC Comptroller NP from IN 1985 CD to TO 1990 CD and CC prior JJ to TO that WDT was VBD a DT chartered JJ accountant NN with IN Clarkson NP Gordon NP . SENT Mr NP . SENT Boyd NP is VBZ a DT graduate NN of IN the DT University NP of IN Toronto NP B NP . SENT Comm NP . SENT . SENT Mr NP . SENT Boyd NP has VHZ been VBN a DT director NN of IN Agnico NP Eagle NP since IN April NP 14 CD , , 1998 CD , , and CC is VBZ also RB Vice NP Chairman NP and CC Chief NP Executive NP Officer NP of IN Contact NP Diamond NP , , a DT TSX NP listed JJ company NN in IN which WDT Agnico NP Eagle NP holds VVZ a DT 44 CD . SENT 2 CD interest NN . SENT Mr NP . SENT Boyd NP is VBZ also RB a DT director NN of IN Golden NP Goliath NN Resources NP Ltd NP . SENT , , a DT junior JJ exploration NN company NN , , and CC a DT director NN of IN the DT Mining NP Association NP of IN Canada NP . SENT Mr NP . SENT Boyd NP resides VVZ in IN Newmarket NP , , Ontario NP . SENT Bernard NP Kraft NP , , C NP . SENT A DT . SENT , , 74 CD , , is VBZ a DT director NN of IN Agnico NP Eagle NP . SENT Mr NP . SENT Kraft NP is VBZ a DT senior JJ partner NN of IN the DT Toronto NP accounting NN firm NN Kraft NP , , Berger NP , , Grill NP , , Schwartz NP , , Cohen NP March NP LLP NP , , Chartered JJ Accountants NNS and CC a DT principal NN in IN Kraft NP Yabov NP Valuations NNS Inc NP . SENT Mr NP . SENT Kraft NP is VBZ a DT member NN of IN the DT Canadian NP Institute NP of IN Chartered JJ Business NP Valuators NNS , , the DT Association NP of IN Certified NP Fraud NP Examiners NNS and CC the DT American NP Society NP of IN Appraisers NP . SENT Mr NP . SENT Kraft NP has VHZ been VBN a DT director NN of IN Agnico NP Eagle NP since IN March NP 12 CD , , 1992 CD . SENT Mr NP . SENT Kraft NP is VBZ also RB a DT director NN of IN Canadian NP Shield NP Resources NPS Inc NP . SENT , , a DT mining NN exploration NN company NN traded VVN on IN the DT TSX NP Venture NP Exchange NP . SENT Mr NP . SENT Kraft NP resides VVZ in IN Toronto NP , , Ontario NP . SENT Mel NP Leiderman NP , , C NP . SENT A DT . SENT , , TEP NP , , 53 CD , , is VBZ a DT director NN of IN Agnico NP Eagle NP . SENT Mr NP . SENT Leiderman NP is VBZ the DT managing VVG partner NN of IN the DT Toronto NP accounting NN firm NN Lipton NP , , Wiseman NP , , Altbaum NP Partners NPS LLP NP . SENT Mr NP . SENT Leiderman NP is VBZ a DT graduate NN of IN the DT University NP of IN Windsor NP B NP . SENT A DT . SENT . SENT Mr NP . SENT Leiderman NP has VHZ been VBN a DT director NN since IN January NP 1 CD , , 2003 CD . SENT Mr NP . SENT Leiderman NP resides VVZ in IN Toronto NP , , Ontario NP . SENT James NP D NP . SENT Nasso NP , , 71 CD , , is VBZ Chairman NP of IN the DT Board NP of IN Directors NPS and CC a DT director NN of IN Agnico NP Eagle NP . SENT Mr NP . SENT Nasso NP , , now RB retired VVN , , founded VVN and CC was VBD the DT President NP of IN Unilac NP Limited NP , , a DT manufacturer NN of IN infant JJ formula NN , , for IN the DT past JJ 35 CD years NNS . SENT Mr NP . SENT Nasso NP is VBZ a DT graduate NN of IN St NP . SENT Francis NP Xavier NP University NP B NP . SENT Comm NP . SENT . SENT Mr NP . SENT Nasso NP has VHZ been VBN a DT director NN of IN 54 CD Agnico NP Eagle NP since IN June NP 27 CD , , 1986 CD . SENT Mr NP . SENT Nasso NP is VBZ also RB a DT director NN and CC Chairman NP of IN Contact NP Diamond NP , , a DT TSX NP listed JJ company NN in IN which WDT Agnico NP Eagle NP holds VVZ a DT 44 CD . SENT 2 CD interest NN . SENT Mr NP . SENT Nasso NP resides VVZ in IN Toronto NP , , Ontario NP . SENT Eberhard NP Scherkus NP , , P NN . SENT Eng NN . SENT , , 52 CD , , is VBZ Executive NP Vice NP President NP and CC Chief NP Operating NP Officer NP and CC a DT director NN of IN Agnico NP Eagle NP . SENT Mr NP . SENT Scherkus NP has VHZ been VBN a DT director NN of IN the DT Company NN since IN January NP 17 CD , , 2005 CD and CC has VHZ been VBN Executive NP Vice NP President NP and CC Chief NP Operating NP Officer NP since IN February NP 6 CD , , 1998 CD . SENT Prior RB to TO his PP$ appointment NN as IN Executive NP Vice NP President NP and CC Chief NP Operating NP Officer NP , , Mr NP . SENT Scherkus NP served VVD as IN Vice NP President NP , , Operations NP from IN September NP 19 CD , , 1996 CD and CC prior RB to TO that DT as IN a DT manager NN of IN the DT Company's NP LaRonde NP Division NP . SENT Mr NP . SENT Scherkus NP is VBZ a DT graduate NN of IN McGill NP University NP B NP . SENT Sc NN . SENT . SENT Mr NP . SENT Scherkus NP also RB serves VVZ as IN director NN of IN Contact NP Diamond NP , , a DT TSX NP listed JJ company NN in IN which WDT Agnico NP Eagle NP holds VVZ a DT 44 CD . SENT 2 CD interest NN , , and CC Riddarhyttan NP Resources NPS AB NP , , a DT Stockholm NP Stock NP Exchange NP listed VVD company NN in IN which WDT Agnico NP Eagle NP holds VVZ a DT 13 CD . SENT 8 CD interest NN . SENT Mr NP . SENT Scherkus NP resides VVZ in IN Oakville NP , , Ontario NP . SENT Ernest NP Sheriff NP , , 59 CD , , is VBZ a DT director NN of IN Agnico NP Eagle NP , , a DT position NN he PP has VHZ held VVN since IN March NP 29 CD , , 1996 CD . SENT Mr NP . SENT Sheriff NP is VBZ a DT self NN employed VVN prospector NN . SENT Mr NP . SENT Sheriff NP resides VVZ in IN Toronto NP , , Ontario NP . SENT Donald NP G NP . SENT Allan NP , , 48 CD , , is VBZ Vice NP President NP , , Corporate NP Development NP of IN Agnico NP Eagle NP , , a DT position NN he PP has VHZ held VVN since IN May NP 6 CD , , 2002 CD . SENT Prior RB to TO his PP$ appointment NN as IN Vice NP President NP , , Corporate NP Development NP , , Mr NP . SENT Allan NP spent VVD 16 CD years NNS as IN an DT investment NN banker NN covering VVG the DT mining NN and CC natural JJ resources NNS sectors NNS with IN the DT firms NNS Salomon NP Smith NP Barney NP and CC Merrill NP Lynch NP . SENT Mr NP . SENT Allan NP is VBZ a DT graduate NN of IN the DT Amos NP Tuck NP School NP , , Dartmouth NP College NP M NP . SENT B SYM . SENT A DT . SENT and CC the DT University NP of IN Toronto NP B NP . SENT Comm NP . SENT . SENT Mr NP . SENT Allan NP is VBZ also RB qualified VVN as IN a DT Chartered JJ Accountant NN . SENT Mr NP . SENT Allan NP also RB serves VVZ as IN Vice NP President NP , , Corporate NP Development NP of IN Contact NP Diamond NP , , a DT TSX NP listed JJ company NN in IN which WDT Agnico NP Eagle NP holds VVZ a DT 44 CD . SENT 2 CD interest NN . SENT Mr NP . SENT Allan NP resides VVZ in IN Toronto NP , , Ontario NP . SENT Alain NP Blackburn NP , , P NN . SENT Eng NN . SENT , , 48 CD , , is VBZ Vice NP President NP , , Exploration NP of IN Agnico NP Eagle NP , , a DT position NN he PP has VHZ held VVN since IN October NP 1 CD , , 2002 CD . SENT Prior RB to TO his PP$ appointment NN as IN Vice NP President NP , , Exploration NP , , Mr NP . SENT Blackburn NP served VVD as IN Manager NP , , Corporate NP Development NP of IN Agnico NP Eagle NP from IN January NP 1999 CD and CC as IN Agnico NP Eagle's NP Exploration NP Manager NP from IN September NP 1996 CD to TO January NP 1999 CD . SENT Mr NP . SENT Blackburn NP is VBZ a DT graduate NN of IN Universit NP du NP Qu NP bec NP de NP Chicoutimi NP P NN . SENT Eng NP . SENT and CC Universit NP du NP Qu NP bec NP en IN Abitibi NP Temiscamingue NP M NP . SENT Sc NN . SENT . SENT Mr NP . SENT Blackburn NP also RB serves VVZ as IN a DT director NN of IN Contact NP Diamond NP , , a DT TSX NP listed JJ company NN in IN which WDT Agnico NP Eagle NP holds VVZ a DT 44 CD . SENT 2 CD interest NN and CC Riddarhyttan NP Resources NPS AB NP , , a DT Stockholm NP Stock NP Exchange NP listed VVD company NN in IN which WDT Agnico NP Eagle NP holds VVZ a DT 13 CD . SENT 8 CD interest NN . SENT Mr NP . SENT Blackburn NP resides VVZ in IN Oakville NP , , Ontario NP . SENT David NP Garofalo NP , , C NP . SENT A DT . SENT , , 39 CD , , is VBZ Vice NP President NP , , Finance NP and CC Chief NP Financial NP Officer NP of IN Agnico NP Eagle NP , , a DT position NN he PP has VHZ held VVN since IN January NP 1 CD , , 1999 CD , , prior JJ to TO which WDT he PP served VVD as IN Treasurer NN of IN Agnico NP Eagle NP from IN June NP 8 CD , , 1998 CD . SENT Prior RB to TO joining VVG Agnico NP Eagle NP , , Mr NP . SENT Garofalo NP served VVD as IN Treasurer NN of IN Inmet NP Mining NP Corporation NP , , an DT international JJ mining NN company NN . SENT Mr NP . SENT Garofalo NP is VBZ a DT graduate NN of IN the DT University NP of IN Toronto NP B NP . SENT Comm NP . SENT . SENT Mr NP . SENT Garofalo NP also RB serves VVZ as IN Vice NP President NP , , Finance NP and CC Chief NP Financial NP Officer NP of IN Contact NP Diamond NP , , a DT TSX NP listed JJ company NN in IN which WDT Agnico NP Eagle NP holds VVZ a DT 44 CD . SENT 2 CD interest NN . SENT Mr NP . SENT Garofalo NP resides VVZ in IN Richmond NP Hill NP , , Ontario NP . SENT There EX are VBP no DT arrangements NNS or CC understandings NNS between IN any DT director NN or CC executive JJ officer NN and CC any DT other JJ person NN pursuant JJ to TO which WDT such JJ director NN or CC executive NN officer NN was VBD selected VVN to TO serve VV , , nor CC are VBP there RB any DT family NN relationships NNS between IN any DT such JJ persons NNS . SENT Compensation NN of IN Directors NNS and CC Officers NNS The DT information NN set VVD forth RB under IN the DT caption NN Compensation NN and CC other JJ Information NN starting VVG on IN page NN 8 CD of IN Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN excluding VVG the DT sections NNS entitled VVD Composition NN of IN Compensation NN Committee NP , , Report NP on IN Executive NP Compensation NN and CC Performance NN Graph NN contained VVD therein RB is VBZ incorporated VVN herein RB by IN reference NN . SENT Board NP Practices NPS See NP Election NP of IN Directors NPS on IN pages NNS 3 CD to TO 6 CD of IN Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN , , Compensation NN and CC other JJ Information NN Compensation NN of IN Directors NNS on IN pages NNS 15 CD to TO 16 CD of IN Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN and CC Statement NN of IN Corporate JJ Governance NN Practices NPS starting VVG on IN page NN D NP 1 CD of IN Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN . SENT 55 CD Employees NNS As IN of IN February NP 28 CD , , 2005 CD , , the DT LaRonde NP Division NP employed VVN 585 CD persons NNS . SENT The DT employees NNS are VBP not RB unionized VVD . SENT As RB of IN February NP 28 CD , , 2005 CD , , the DT Executive NP Office NP , , Exploration NP Division NP and CC Regional NP Development NP Division NP employed VVN 16 CD , , 8 CD and CC 31 CD persons NNS , , respectively RB . SENT The DT number NN of IN employees NNS employed VVN by IN the DT Company NN at IN the DT end NN of IN 2004 CD , , 2003 CD , , 2002 CD and CC 2001 CD were VBD 610 CD , , 549 CD , , 457 CD , , and CC 397 CD , , respectively RB . SENT Share NN Ownership NN As IN of IN February NP 28 CD , , 2005 CD , , officers NNS and CC directors NNS as IN a DT group NN 11 CD persons NNS beneficially RB owned VVN or CC controlled VVN excluding VVG options NNS to TO purchase VV 1 CD , , 674 CD , , 900 CD common JJ shares NNS , , of IN which WDT 1 CD , , 134 CD , , 900 CD are VBP currently RB exercisable JJ and CC 540 CD , , 000 CD are VBP currently RB unexercisable JJ an DT aggregate NN of IN 219 CD , , 353 CD common JJ shares NNS or CC about IN 0 CD . SENT 25 CD of IN the DT 86 CD , , 125 CD , , 231 CD issued VVN and CC outstanding JJ common JJ shares NNS . SENT See VV also RB Compensation NN and CC other JJ Information NN Compensation NN of IN Officers NNS on IN pages NNS 11 CD to TO 12 CD of IN Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN . SENT Security NP Ownership NP of IN Directors NPS and CC Executive NP Officers NNS See VV Election NN of IN Directors NNS on IN pages NNS 3 CD to TO 6 CD of IN Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN , , Compensation NN and CC other JJ Information NN Compensation NN of IN Officers NNS on IN pages NNS 11 CD to TO 12 CD Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN . SENT The DT following VVG table NN sets VVZ forth RB certain JJ information NN concerning VVG the DT direct JJ and CC beneficial JJ ownership NN as IN at IN February NP 28 CD , , 2005 CD by IN each DT director NN and CC executive JJ officer NN of IN the DT Company NN of IN common JJ shares NNS of IN the DT Company NN and CC options NNS to TO purchase VV common JJ shares NNS of IN the DT Company NN . SENT Unless IN otherwise RB noted VVN , , exercise NN prices NNS are VBP in IN Canadian JJ dollars NNS . SENT Beneficial JJ Owner NN Share NN Ownership NP 1 CD Total JJ Common JJ Shares NNS under IN Option NP 2 CD Common JJ Shares NNS under IN Option NN Exercise NN Price NP Expiry NN Date NN Leanne NP M NP . SENT Baker NP Director NP 3 CD , , 500 CD 25 CD , , 500 CD 18 CD , , 000 CD 7 CD , , 500 CD C NP 21 CD . SENT 84 CD US NP 14 CD . SENT 06 CD C NP 16 CD . SENT 89 CD US NP 13 CD . SENT 72 CD 12 JJ 18 CD 2007 CD 12 JJ 13 CD 2009 CD Douglas NP R NP . SENT Beaumont NP Director NP 5 CD , , 976 CD 44 CD , , 500 CD 12 CD , , 000 CD 25 CD , , 000 CD 7 CD , , 500 CD 8 CD . SENT 25 CD 10 CD . SENT 40 CD 16 CD . SENT 89 CD 3 CD 6 CD 2008 JJ 1 CD 5 CD 2010 JJ 12 CD 13 CD 2009 CD Sean NP Boyd NP Director NP , , President NP and CC Chief NP Executive NP Officer NP 94 CD , , 162 CD 539 CD , , 900 CD 225 CD , , 000 CD 90 CD , , 000 CD 125 CD , , 000 CD 79 CD , , 900 CD 20 CD , , 000 CD 15 CD . SENT 93 CD 16 CD . SENT 69 CD 16 CD . SENT 89 CD 10 CD . SENT 40 CD 9 CD . SENT 20 CD 1 CD 10 JJ 2007 CD 1 CD 12 JJ 2009 CD 12 CD 13 JJ 2009 CD 1 CD 5 CD 2010 JJ 1 CD 3 CD 2011 CD Bernard NP Kraft NP Director NP 5 CD , , 976 CD 42 CD , , 500 CD 10 CD , , 000 CD 7 CD , , 500 CD 25 CD , , 000 CD 11 CD . SENT 40 CD 16 CD . SENT 89 CD 10 CD . SENT 40 CD 9 CD 29 JJ 2009 CD 12 CD 13 JJ 2009 CD 1 CD 5 CD 2010 CD Mel NP Leiderman NP Director NP 2 CD , , 000 CD 25 CD , , 500 CD 18 CD , , 000 CD 7 CD , , 500 CD 21 CD . SENT 84 CD 16 CD . SENT 89 CD 12 JJ 18 CD 2007 CD 12 JJ 13 CD 2009 CD James NP Nasso NP Director NP and CC Chairman NP of IN the DT Board NP 17 CD , , 751 CD 32 CD , , 500 CD 25 CD , , 000 CD 7 CD , , 500 CD 10 CD . SENT 40 CD 16 CD . SENT 89 CD 1 CD 5 CD 2010 JJ 12 CD 13 CD 2009 CD Ernest NP Sheriff NP Director NP 10 CD , , 967 CD 3 CD 50 CD , , 500 CD 18 CD , , 000 CD 10 CD , , 000 CD 7 CD , , 500 CD 15 CD , , 000 CD 24 CD . SENT 87 CD 11 CD . SENT 40 CD 16 CD . SENT 89 CD 10 CD . SENT 40 CD 3 CD 29 JJ 2006 CD 9 CD 29 JJ 2009 CD 12 CD 13 JJ 2009 CD 1 CD 5 CD 2010 CD 56 CD Eberhard NP Scherkus NP Director NP , , Executive NP Vice NP President NP and CC Chief NP Operating NN Officer NP 49 CD , , 303 CD 413 CD , , 000 CD 135 CD , , 000 CD 70 CD , , 000 CD 100 CD , , 000 CD 108 CD , , 000 CD 15 CD . SENT 93 CD 16 CD . SENT 69 CD 16 CD . SENT 89 CD 10 CD . SENT 40 CD 1 CD 10 JJ 2007 CD 1 CD 12 JJ 2009 CD 12 CD 13 JJ 2009 CD 1 CD 5 CD 2010 CD David NP Garofalo NP Vice NP President NP , , Finance NP and CC Chief NP Financial NP Officer NP 22 CD , , 834 CD 208 CD , , 000 CD 75 CD , , 000 CD 50 CD , , 000 CD 70 CD , , 000 CD 13 CD , , 000 CD 15 CD . SENT 93 CD 16 CD . SENT 69 CD 16 CD . SENT 89 CD 10 CD . SENT 40 CD 1 CD 10 JJ 2007 CD 1 CD 12 JJ 2009 CD 12 CD 13 JJ 2009 CD 1 CD 5 CD 2010 CD Donald NP G NP . SENT Allan NP Vice NP President NP , , Corporate JJ Development NP 3 CD , , 287 CD 130 CD , , 000 CD 50 CD , , 000 CD 40 CD , , 000 CD 40 CD , , 000 CD 21 CD . SENT 82 CD 16 CD . SENT 89 CD 16 CD . SENT 69 CD 5 CD 6 CD 2007 JJ 12 CD 13 CD 2009 JJ 1 CD 12 CD 2009 CD Alain NP Blackburn NP Vice NP President NP , , Exploration NP 3 CD , , 588 CD 173 CD , , 000 CD 25 CD , , 000 CD 25 CD , , 000 CD 25 CD , , 000 CD 4 CD , , 000 CD 50 CD , , 000 CD 4 CD , , 000 CD 40 CD , , 000 CD 18 CD . SENT 75 CD 15 CD . SENT 93 CD 21 CD . SENT 84 CD 6 CD . SENT 55 CD 16 CD . SENT 69 CD 10 CD . SENT 40 CD 16 CD . SENT 89 CD 12 CD 6 CD 2006 JJ 1 CD 10 CD 2007 JJ 12 CD 18 CD 2007 JJ 1 CD 4 CD 2009 JJ 1 CD 12 CD 2009 JJ 1 CD 5 CD 2010 JJ 12 CD 13 CD 2009 CD Notes NNS . SENT 1 CD As IN of IN December NP 31 CD , , 2004 CD . SENT In IN each DT case NN , , shareholdings NNS constitute VVP less JJR than IN one CD percent NN of IN the DT issued VVN and CC outstanding JJ common JJ shares NNS of IN the DT Company NN . SENT The DT total JJ number NN of IN common JJ shares NNS held VVN by IN directors NNS and CC executive JJ officers NNS constitutes VVZ 0 CD . SENT 35 CD of IN the DT issued VVN and CC outstanding JJ common JJ shares NNS of IN the DT Company NN . SENT 2 CD As IN of IN December NP 31 CD , , 2004 CD . SENT 3 CD Including VVG 5 CD , , 000 CD common JJ shares NNS held VVN by IN Tower NP Financial NP Corporation NP Limited NP , , a DT corporation NN wholly RB owned VVN by IN Mr NP . SENT Sheriff NP . SENT ITEM NN 7 CD . SENT MAJOR JJ SHAREHOLDERS NNS AND CC RELATED JJ PARTY NN TRANSACTIONS NNS Major NP Shareholders NP Fidelity NP Management NP Research NP Company NP , , Fidelity NP Management NP Trust NP Company NP and CC Fidelity NP International NP Limited NP collectively RB , , Fidelity NP have VHP filed VVN reports NNS with IN securities NNS regulators NNS stating VVG that IN they PP collectively RB have VH control NN over IN 9 CD , , 067 CD , , 516 CD common JJ shares NNS of IN the DT Company NP 10 CD . SENT 4 CD and CC that DT FMR NP Corp NP . SENT may MD be VB deemed VVN a DT joint JJ actor NN with IN each DT of IN the DT above JJ entities NNS as IN certain JJ officers NNS of IN FMR NP Corp NP . SENT are VBP trustees NNS of IN certain JJ of IN such JJ entities NNS . SENT To TO the DT knowledge NN of IN the DT directors NNS and CC senior JJ officers NNS of IN the DT Company NN , , as RB of IN February NP 28 CD , , 2005 CD , , no DT other JJ person NN or CC corporation NN beneficially RB owns VVZ or CC exercises VVZ control NN or CC direction NN over IN common JJ shares NNS of IN the DT Company NN carrying VVG more JJR than IN 5 CD of IN the DT voting NN rights NNS attached VVN to TO all DT common JJ shares NNS of IN the DT Company NN . SENT Fidelity NP does VVZ not RB exercise VV different JJ voting NN rights NNS than IN other JJ holders NNS of IN the DT Company's NP common JJ shares NNS . SENT As RB of IN February NP 28 CD , , 2005 CD , , there EX were VBD . SENT i NP 4 CD , , 522 CD holders NNS of IN record NN of IN Agnico NP Eagle's NP 86 CD , , 100 CD , , 481 CD outstanding JJ common JJ shares NNS , , of IN which WDT 3 CD , , 884 CD holders NNS of IN record NN were VBD in IN the DT United NP States NPS and CC held VVD 39 CD , , 470 CD , , 141 CD common JJ shares NNS or CC about IN 41 CD . SENT 33 CD of IN the DT outstanding JJ common JJ shares NNS , , ii NN three CD holders NNS of IN record NN of IN Agnico NP Eagle's NP 6 CD , , 900 CD , , 000 CD outstanding JJ Warrants NNS , , of IN which WDT two CD holders NNS of IN record NN were VBD in IN the DT United NP States NPS and CC held VVD 4 CD , , 423 CD , , 500 CD Warrants NNS or CC about IN 64 CD . SENT 11 CD of IN the DT outstanding JJ Warrants NNS , , and CC iii NP two CD holders NNS of IN record NN of IN Agnico NP Eagle's NP Convertible JJ Debentures NNS neither CC of IN whom WP was VBD in IN the DT United NP States NPS . SENT The DT Company NN is VBZ not RB aware JJ of IN any DT arrangements NNS the DT operation NN of IN which WDT may MD at IN a DT subsequent JJ date NN result NN in IN a DT change NN in IN control NN of IN the DT Company NN . SENT To TO the DT best JJS knowledge NN of IN the DT Company NN , , it PP is VBZ not RB directly RB or CC indirectly RB owned VVN or CC controlled VVN by IN another DT corporation NN , , by IN any DT government NN or CC by IN any DT natural JJ or CC legal JJ person NN severally RB or CC jointly RB . SENT 57 CD Related JJ Party NP Transactions NNS The DT information NN set VVD forth RB under IN the DT captions NNS Indebtedness NN of IN Directors NNS , , Executive NP Officers NNS , , and CC Senior JJ Officers NNS on IN page NN 16 CD of IN Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN is VBZ incorporated VVN herein RB by IN reference NN . SENT For IN the DT years NNS ended VVN December NP 31 CD , , of IN 2001 CD and CC 2002 CD , , the DT Company NN loaned VVN C NP 4 CD , , 271 CD , , 708 CD and CC C $ 4 CD , , 034 CD , , 406 CD to TO Contact NP Diamond NP to TO fund VV ongoing JJ exploration NN and CC operating NN activity NN . SENT For IN the DT years NNS ended VVN December NP 31 CD , , 2003 CD and CC 2004 CD and CC the DT period NN from IN January NP 1 CD , , 2005 CD to TO March NP 22 CD , , 2005 CD , , Contact NP Diamond NP repaid VVD C $ 329 CD , , 915 CD , , nil NN and CC nil NN , , respectively RB , , to TO the DT Company NN . SENT The DT largest JJS amount NN outstanding JJ under IN this DT loan NN was VBD C $ 24 CD , , 438 CD , , 565 CD in IN 2001 CD , , C NP 25 CD , , 640 CD , , 785 CD in IN 2002 CD , , C NP 5 CD , , 307 CD , , 643 CD in IN 2003 CD , , C NP 3 CD , , 902 CD , , 111 CD in IN 2004 CD and CC C $ 3 CD , , 902 CD , , 111 CD for IN the DT period NN from IN January NP 1 CD , , 2005 CD to TO March NP 22 CD , , 2005 CD . SENT The DT total JJ indebtedness NN of IN Contact NP Diamond NP to TO the DT Company NN at IN March NP 22 CD , , 2005 CD is VBZ C $ 3 CD , , 901 CD , , 809 CD , , including VVG accrued JJ interest NN to TO March NP 22 CD , , 2005 CD of IN nil NN . SENT The DT loan NN is VBZ repayable JJ on IN demand NN . SENT The DT rate NN of IN interest NN on IN the DT loan NN is VBZ 8 CD per IN annum NN . SENT The DT Company NN waived VVD the DT interest NN on IN this DT loan NN commencing VVG May NP 13 CD , , 2002 CD and CC has VHZ no DT intention NN of IN charging VVG any DT interest NN or CC demanding VVG repayment NN until IN Contact NP Diamond NP has VHZ the DT ability NN to TO repay VV . SENT The DT book NN value NN of IN the DT loan NN on IN the DT Company's NP consolidated JJ financial JJ statements NNS was VBD C $ 3 CD , , 638 CD , , 948 CD at IN December NP 31 CD , , 2004 CD . SENT On IN May NP 13 CD , , 2002 CD , , the DT Company NN completed VVD a DT transaction NN with IN Contact NP Diamond NP which WDT resulted VVD in IN the DT elimination NN of IN 25 CD , , 640 CD , , 785 CD of IN the DT outstanding JJ amount NN owed VVN by IN Contact NP Diamond NP to TO the DT Company NN . SENT In IN connection NN with IN a DT public JJ offering NN by IN Contact NP Diamond NP in IN July NP 2003 CD , , the DT Company NN committed VVN to TO fund VV Contact NP Diamond NP if IN and CC to TO the DT extent NN that IN Contact NP Diamond NP was VBD unable JJ to TO raise VV an DT additional JJ C NP 4 CD . SENT 8 CD million CD of IN gross JJ proceeds NNS in IN equity NN capital NN prior RB to TO the DT public JJ offering NN and CC December NP 31 CD , , 2003 CD . SENT In IN August NP 2003 CD Contact NP Diamond NP raised VVD aggregate JJ cash NN proceeds NNS of IN approximately RB C $ 5 CD . SENT 2 CD million CD in IN a DT private JJ offering NN of IN flow NN through IN shares NNS and CC therefore RB is VBZ no DT longer RBR subject JJ to TO this DT commitment NN . SENT On IN September NP 20 CD , , 2004 CD , , the DT Company NN purchased VVD all RB of IN Contact NP Diamond's NP interests NNS in IN ten CD gold NN and CC other JJ precious JJ metals NNS exploration NN properties NNS located VVN in IN Canada NP and CC the DT United NP States NPS for IN cash NN consideration NN of IN C NP 3 CD . SENT 290 CD million CD . SENT The DT purchase NN price NN was VBD based VVN on IN a DT valuation NN prepared VVN by IN Watts NP , , Griffis NP and CC McOuat NP Limited NP of IN Toronto NP , , Canada NP , , consulting NN geologists NNS and CC engineers NNS . SENT The DT Company NN provides VVZ Contact NP Diamond NP with IN all DT of IN its PP$ executives NNS , , employees NNS and CC administrative JJ support NN other JJ than IN Contact NP Diamond's NP recently RB appointed VVD President NP and CC Chief NP Operating NP Officer NP and CC Vice NP President NP , , Exploration NN at IN no DT cost NN to TO Contact NP Diamond NP . SENT Of IN the DT nine CD current JJ directors NNS of IN Contact NP Diamond NP , , three CD are VBP also RB directors NNS of IN the DT Company NN including VVG two CD officers NNS of IN the DT Company NN who WP are VBP also RB directors NNS of IN the DT Company NN , , one PP is VBZ an DT officer NN of IN the DT Company NN and CC four CD of IN the DT remaining JJ current JJ directors NNS of IN Contact NP Diamond NP are VBP former JJ directors NNS of IN the DT Company NN . SENT ITEM NN 8 CD . SENT FINANCIAL JJ INFORMATION NN The DT consolidated JJ financial JJ statements NNS furnished VVN pursuant JJ to TO Item NN 18 CD are VBP presented VVN in IN accordance NN with IN US NP GAAP NP . SENT Consolidated JJ financial JJ statements NNS under IN Canadian NP GAAP NP are VBP prepared VVN and CC separately RB delivered VVN to TO shareholders NNS for IN statutory JJ reporting NN purposes NNS . SENT During IN the DT period NN under IN review NN , , inflation NN has VHZ not RB had VHN a DT significant JJ impact NN on IN the DT Company's NP operations NNS . SENT ITEM NN 9 CD . SENT THE DT OFFER NN AND CC LISTING NN Market NN and CC Listing NN Details NNS Agnico NP Eagle's NP common JJ shares NNS are VBP listed VVN and CC traded VVN in IN Canada NP on IN the DT TSX NP and CC in IN the DT United NP States NPS on IN the DT New NP York NP Stock NP Exchange NP the DT NYSE NP . SENT Agnico NP Eagle's NP Convertible NP Debentures NNS trade NN on IN the DT TSX NP under IN the DT symbol NN AGE NN . SENT DB NP . SENT U NP . SENT The DT Company's NP Warrants NNS trade NN on IN the DT TSX NP and CC the DT Nasdaq NP National NP Market NP the DT Nasdaq NP . SENT 58 RB The DT following VVG table NN sets VVZ forth RB the DT high JJ and CC low JJ sale NN prices NNS for IN Agnico NP Eagle's NP common JJ shares NNS on IN the DT TSX NP and CC the DT NYSE NP for IN each DT of IN the DT five CD fiscal JJ years NNS ended VVN December NP 31 CD , , 2004 CD and CC for IN each DT quarter NN during IN the DT two CD fiscal JJ years NNS ended VVN December NP 31 CD , , 2004 CD . SENT TSX NP C NP NYSE NP US NP High NP Low NP Average NP Daily NP Volume NN High NP Low NP Average NP Daily NP Volume NN 2000 CD 11 CD . SENT 75 CD 7 CD . SENT 30 CD 78 CD , , 171 CD 7 CD . SENT 94 CD 4 CD . SENT 88 CD 104 CD , , 811 CD 2001 CD 18 CD . SENT 50 CD 7 CD . SENT 97 CD 184 CD , , 068 CD 11 CD . SENT 75 CD 5 CD . SENT 21 CD 244 CD , , 817 CD 2002 CD 27 CD . SENT 59 CD 15 CD . SENT 65 CD 420 CD , , 820 CD 17 CD . SENT 98 CD 9 CD . SENT 83 CD 740 CD , , 528 CD 2003 CD 24 CD . SENT 94 CD 13 CD . SENT 40 CD 558 CD , , 512 CD 16 CD . SENT 47 CD 9 CD . SENT 72 CD 986 CD , , 285 CD 2004 CD 19 CD . SENT 95 CD 15 CD . SENT 50 CD 382 CD , , 875 CD 16 CD . SENT 73 CD 11 CD . SENT 96 CD 730 CD , , 352 CD 2003 CD First NP Quarter NN 24 CD . SENT 94 CD 16 CD . SENT 42 CD 539 CD , , 986 CD 16 CD . SENT 47 CD 11 CD . SENT 11 CD 990 CD , , 498 CD Second JJ Quarter NN 16 CD . SENT 89 CD 14 CD . SENT 14 CD 582 CD , , 544 CD 12 CD . SENT 51 CD 9 CD . SENT 72 CD 897 CD , , 052 CD Third JJ Quarter NN 20 CD . SENT 77 CD 14 CD . SENT 60 CD 567 CD , , 081 CD 14 CD . SENT 90 CD 10 CD . SENT 32 CD 903 CD , , 395 CD Fourth JJ Quarter NN 18 CD . SENT 56 CD 13 CD . SENT 40 CD 544 CD , , 436 CD 14 CD . SENT 20 CD 10 CD . SENT 11 CD 1 CD , , 152 CD , , 995 CD 2004 CD First NP Quarter NN 19 CD . SENT 76 CD 15 CD . SENT 50 CD 490 CD , , 874 CD 15 CD . SENT 07 CD 11 CD . SENT 96 CD 1 CD , , 028 CD , , 974 CD Second JJ Quarter NN 19 CD . SENT 80 CD 15 CD . SENT 86 CD 384 CD , , 843 CD 15 CD . SENT 07 CD 11 CD . SENT 47 CD 679 CD , , 561 CD Third JJ Quarter NN 19 CD . SENT 30 CD 16 CD . SENT 45 CD 257 CD , , 437 CD 14 CD . SENT 68 CD 12 CD . SENT 47 CD 482 CD , , 805 CD Fourth JJ Quarter NN 19 CD . SENT 95 CD 16 CD . SENT 40 CD 398 CD , , 346 CD 16 CD . SENT 73 CD 13 CD . SENT 16 CD 730 CD , , 069 CD The DT following NN table NN sets VVZ forth RB the DT high JJ and CC low JJ sale NN prices NNS for IN the DT Company's NP common JJ shares NNS on IN the DT TSX NP and CC the DT NYSE NP for IN the DT last JJ 12 CD months NNS . SENT TSX NP C NP NYSE NP US NP High NP Low NP Average NP Daily NP Volume NN High NP Low NP Average NP Daily NP Volume NN 2004 CD March NP 19 CD . SENT 76 CD 18 CD . SENT 01 CD 450 CD , , 154 CD 15 CD . SENT 07 CD 13 CD . SENT 33 CD 950 CD , , 568 CD April NP 19 CD . SENT 80 CD 15 CD . SENT 94 CD 387 CD , , 002 CD 15 CD . SENT 07 CD 11 CD . SENT 66 CD 831 CD , , 919 CD May NP 19 CD . SENT 15 CD 15 CD . SENT 86 CD 268 CD , , 452 CD 14 CD . SENT 08 CD 11 CD . SENT 47 CD 719 CD , , 445 CD June NP 19 CD . SENT 25 CD 17 CD . SENT 36 CD 164 CD , , 575 CD 14 CD . SENT 13 CD 12 CD . SENT 67 CD 489 CD , , 219 CD July NP 19 CD . SENT 30 CD 17 CD . SENT 05 CD 187 CD , , 132 CD 14 CD . SENT 68 CD 12 CD . SENT 76 CD 451 CD , , 910 CD August NP 18 CD . SENT 07 CD 16 CD . SENT 45 CD 325 CD , , 043 CD 13 CD . SENT 89 CD 12 CD . SENT 47 CD 553 CD , , 873 CD September NP 18 CD . SENT 18 CD 16 CD . SENT 49 CD 260 CD , , 136 CD 14 CD . SENT 36 CD 12 CD . SENT 68 CD 439 CD , , 248 CD October NP 19 CD . SENT 35 CD 16 CD . SENT 97 CD 351 CD , , 908 CD 15 CD . SENT 87 CD 13 CD . SENT 51 CD 671 CD , , 262 CD November NP 19 CD . SENT 95 CD 17 CD . SENT 60 CD 388 CD , , 028 CD 16 CD . SENT 73 CD 14 CD . SENT 33 CD 774 CD , , 414 CD December NP 18 CD . SENT 80 CD 16 CD . SENT 40 CD 453 CD , , 382 CD 15 CD . SENT 88 CD 13 CD . SENT 16 CD 743 CD , , 873 CD 2005 CD January NP 16 CD . SENT 40 CD 15 CD . SENT 35 CD 324 CD , , 590 CD 13 CD . SENT 64 CD 12 CD . SENT 64 CD 532 CD , , 525 CD February NP 18 CD . SENT 30 CD 14 CD . SENT 95 CD 384 CD , , 500 CD 14 CD . SENT 72 CD 11 CD . SENT 97 CD 804 CD , , 437 CD On IN March NP 22 CD , , 2005 CD , , the DT closing NN price NN of IN the DT common JJ shares NNS was VBD C $ 17 CD . SENT 39 CD on IN the DT TSX NP and CC 14 CD . SENT 44 CD on IN the DT NYSE NP . SENT The DT registrar NN and CC transfer NN agent NN for IN the DT common JJ shares NNS is VBZ Computershare NP Trust NP Company NP of IN Canada NP , , Toronto NP , , Ontario NP . SENT The DT following VVG table NN sets VVZ forth RB the DT high JJ and CC low JJ sale NN prices NNS for IN the DT Warrants NNS on IN the DT TSX NP and CC Nasdaq NP since IN trading NN began VVD on IN November NP 14 CD , , 2002 CD and CC November NP 7 CD , , 2002 CD respectively RB Trading NP Start NP and CC for IN each DT quarter NN 59 CD during IN the DT two CD fiscal JJ years NNS ended VVN December NP 31 CD , , 2004 CD . SENT The DT Warrants NNS trade NN in IN US NP dollars NNS on IN both CC the DT TSX NP and CC the DT Nasdaq NP . SENT TSX NP US NP Nasdaq NP US NP High NP Low NP Average NP Daily NP Volume NN High NP Low NP Average NP Daily NP Volume NN 2002 CD from IN Trading NP Start NP 5 CD . SENT 55 CD 2 CD . SENT 85 CD 93 CD , , 921 CD 5 CD . SENT 50 CD 3 CD . SENT 10 CD 22 CD , , 183 CD 2003 CD 5 CD . SENT 80 CD 2 CD . SENT 11 CD 19 CD , , 022 CD 5 CD . SENT 96 CD 2 CD . SENT 20 CD 17 CD , , 888 CD 2004 CD 4 CD . SENT 00 CD 2 CD . SENT 50 CD 16 CD , , 608 CD 3 CD . SENT 99 CD 2 CD . SENT 50 CD 13 CD , , 729 CD 2003 CD First NP Quarter NN 5 CD . SENT 80 CD 3 CD . SENT 18 CD 30 CD , , 878 CD 5 CD . SENT 96 CD 3 CD . SENT 39 CD 16 CD , , 983 CD Second JJ Quarter NN 3 CD . SENT 50 CD 2 CD . SENT 70 CD 22 CD , , 921 CD 3 CD . SENT 70 CD 2 CD . SENT 64 CD 14 CD , , 700 CD Third JJ Quarter NN 4 CD . SENT 59 CD 2 CD . SENT 40 CD 4 CD , , 802 CD 4 CD . SENT 60 CD 2 CD . SENT 40 CD 12 CD , , 098 CD Fourth JJ Quarter NN 3 CD . SENT 80 CD 2 CD . SENT 11 CD 15 CD , , 579 CD 3 CD . SENT 95 CD 2 CD . SENT 20 CD 27 CD , , 214 CD 2004 CD First NP Quarter NN 4 CD . SENT 00 CD 2 CD . SENT 55 CD 17 CD , , 229 CD 4 CD . SENT 00 CD 2 CD . SENT 94 CD 17 CD , , 138 CD Second JJ Quarter NN 3 CD . SENT 98 CD 2 CD . SENT 50 CD 25 CD , , 872 CD 4 CD . SENT 00 CD 2 CD . SENT 50 CD 6 CD , , 704 CD Third JJ Quarter NN 3 CD . SENT 36 CD 2 CD . SENT 60 CD 44 CD , , 650 CD 3 CD . SENT 38 CD 2 CD . SENT 45 CD 24 CD , , 400 CD Fourth JJ Quarter NN 4 CD . SENT 00 CD 2 CD . SENT 55 CD 35 CD , , 713 CD 3 CD . SENT 94 CD 2 CD . SENT 50 CD 7 CD , , 265 CD The DT following NN table NN sets VVZ forth RB the DT high JJ and CC low JJ sales NNS prices NNS for IN the DT Warrants NNS on IN the DT TSX NP and CC the DT Nasdaq NP for IN the DT last JJ 12 CD months NNS . SENT TSX NP US NP Nasdaq NP US NP High NP Low NP Average NP Daily NP Volume NN High NP Low NP Average NP Daily NP Volume NN 2004 CD March NP 4 CD . SENT 00 CD 3 CD . SENT 40 CD 4 CD , , 193 CD 3 CD . SENT 63 CD 2 CD . SENT 73 CD 32 CD , , 368 CD April NP 3 CD . SENT 98 CD 2 CD . SENT 88 CD 1 CD , , 933 CD 4 CD . SENT 00 CD 2 CD . SENT 61 CD 10 CD , , 345 CD May NP 3 CD . SENT 27 CD 2 CD . SENT 50 CD 4 CD , , 968 CD 3 CD . SENT 25 CD 2 CD . SENT 42 CD 5 CD , , 906 CD June NP 3 CD . SENT 25 CD 2 CD . SENT 80 CD 4 CD , , 875 CD 3 CD . SENT 27 CD 2 CD . SENT 53 CD 3 CD , , 750 CD July NP 3 CD . SENT 36 CD 2 CD . SENT 65 CD 5 CD , , 250 CD 3 CD . SENT 28 CD 2 CD . SENT 50 CD 3 CD , , 658 CD August NP 3 CD . SENT 04 CD 2 CD . SENT 60 CD 2 CD , , 900 CD 3 CD . SENT 16 CD 2 CD . SENT 45 CD 4 CD , , 717 CD September NP 3 CD . SENT 15 CD 2 CD . SENT 85 CD 14 CD , , 296 CD 3 CD . SENT 18 CD 2 CD . SENT 65 CD 57 CD , , 911 CD October NP 3 CD . SENT 61 CD 2 CD . SENT 95 CD 4 CD , , 257 CD 3 CD . SENT 68 CD 2 CD . SENT 60 CD 6 CD , , 259 CD November NP 4 CD . SENT 00 CD 3 CD . SENT 50 CD 1 CD , , 341 CD 4 CD . SENT 00 CD 3 CD . SENT 20 CD 5 CD , , 385 CD December NP 3 CD . SENT 80 CD 2 CD . SENT 55 CD 4 CD , , 887 CD 3 CD . SENT 85 CD 2 CD . SENT 50 CD 6 CD , , 850 CD 2005 CD January NP 2 CD . SENT 67 CD 2 CD . SENT 25 CD 5 CD , , 694 CD 2 CD . SENT 88 CD 2 CD . SENT 26 CD 13 CD , , 460 CD February NP 2 CD . SENT 88 CD 2 CD . SENT 00 CD 1 CD , , 958 CD 2 CD . SENT 89 CD 1 CD . SENT 90 CD 10 CD , , 953 CD On IN March NP 22 CD , , 2005 CD , , the DT closing NN price NN of IN the DT Warrants NNS was VBD 2 CD . SENT 95 CD on IN the DT TSX NP and CC 2 CD . SENT 90 CD on IN the DT Nasdaq NP . SENT The DT registrar NN and CC transfer NN agent NN for IN the DT Warrants NNS is VBZ Computershare NP Trust NP Company NP of IN Canada NP , , Toronto NP , , Ontario NP . SENT The DT following VVG table NN sets VVZ forth RB the DT high JJ and CC low JJ sales NNS price NN for IN the DT Convertible JJ Debentures NNS , , which WDT commenced VVD trading NN on IN February NP 15 CD , , 2002 CD , , on IN the DT TSX NP for IN each DT of IN the DT three CD fiscal JJ years NNS ended VVN December NP 31 CD , , 60 CD 2004 CD and CC for IN each DT quarter NN during IN the DT two CD fiscal JJ years NNS ended VVN December NP 31 CD , , 2004 CD . SENT The DT Convertible JJ Debentures NNS trade NN on IN the DT TSX NP in IN US NP dollars NNS . SENT TSX NP US NP High NP Low NP Average NP Daily NP Volume NN 2002 CD from IN February NP 15 CD 142 CD . SENT 00 CD 95 CD . SENT 30 CD 228 CD , , 997 CD 2003 CD 133 CD . SENT 00 CD 100 CD . SENT 50 CD 150 CD , , 884 CD 2004 CD 129 CD . SENT 95 CD 105 CD . SENT 02 CD 696 CD , , 138 CD 2003 CD First NP Quarter NN 133 CD . SENT 00 CD 107 CD . SENT 00 CD 247 CD , , 711 CD Second JJ Quarter NN 114 CD . SENT 00 CD 102 CD . SENT 00 CD 123 CD , , 191 CD Third JJ Quarter NN 125 CD . SENT 00 CD 106 CD . SENT 00 CD 106 CD , , 268 CD Fourth JJ Quarter NN 120 CD . SENT 00 CD 100 CD . SENT 50 CD 120 CD , , 225 CD 2004 CD First NP Quarter NN 129 CD . SENT 95 CD 105 CD . SENT 02 CD 877 CD , , 620 CD Second JJ Quarter NN 121 CD . SENT 00 CD 109 CD . SENT 00 CD 742 CD , , 875 CD Third JJ Quarter NN 118 CD . SENT 00 CD 111 CD . SENT 00 CD 324 CD , , 667 CD Fourth JJ Quarter NN 127 CD . SENT 00 CD 112 CD . SENT 00 CD 746 CD , , 212 CD The DT following NN table NN sets VVZ forth RB the DT high JJ and CC low JJ sales NNS price NN for IN the DT Convertible JJ Debentures NNS for IN the DT past JJ nine CD months NNS . SENT TSX NP US NP High NP Low NP Average NP Daily NP Volume NN 2004 CD March NP 129 CD . SENT 95 CD 113 CD . SENT 10 CD 124 CD , , 133 CD April NP 121 CD . SENT 00 CD 110 CD . SENT 00 CD 46 CD , , 031 CD May NP 119 CD . SENT 00 CD 109 CD . SENT 00 CD 10 CD , , 278 CD June NP 119 CD . SENT 00 CD 110 CD . SENT 15 CD 87 CD , , 333 CD July NP 118 CD . SENT 00 CD 115 CD . SENT 00 CD 168 CD . SENT 00 CD August NP 115 CD . SENT 00 CD 111 CD . SENT 00 CD 40 CD , , 071 CD September NP 116 CD . SENT 00 CD 112 CD . SENT 00 CD 29 CD , , 909 CD October NP 122 CD . SENT 99 CD 114 CD . SENT 00 CD 86 CD , , 111 CD November NP 127 CD . SENT 00 CD 116 CD . SENT 15 CD 57 CD , , 278 CD December NP 120 CD . SENT 00 CD 112 CD . SENT 00 CD 78 CD , , 133 CD 2005 CD January NP 116 CD . SENT 10 CD 108 CD . SENT 90 CD 48 CD , , 071 CD February NP 116 CD . SENT 10 CD 107 CD . SENT 50 CD 197 CD , , 125 CD On IN March NP 22 CD , , 2005 CD , , the DT closing NN price NN of IN the DT Convertible JJ Debentures NNS was VBD 113 CD . SENT 25 CD on IN the DT TSX NP . SENT The DT registrar NN and CC transfer NN agent NN for IN the DT Convertible JJ Debentures NNS is VBZ Computershare NP Trust NP Company NP of IN Canada NP , , Toronto NP , , Ontario NP . SENT 61 CD ITEM NN 10 CD . SENT ADDITIONAL JJ INFORMATION NN Memorandum NN and CC Articles NNS of IN Incorporation NN Articles NNS of IN Amendment NP The NP Company's NP articles NNS of IN incorporation NN do VVP not RB place VV any DT restrictions NNS on IN the DT Company's NP objects NNS and CC purposes NNS . SENT For IN more JJR information NN see VV the DT Articles NNS of IN Amendment NP incorporated VVN by IN reference NN as IN an DT exhibit NN to TO this DT Form NN 20 CD F NN . SENT Certain JJ Powers NP of IN Directors NPS The DT Business NP Corporations NP Act NP Ontario NP the DT OBCA NP requires VVZ that IN every DT director NN who WP is VBZ a DT party NN to TO a DT material NN contract NN or CC transaction NN or CC a DT proposed VVN material NN contract NN or CC transaction NN with IN a DT corporation NN , , or CC who WP is VBZ a DT director NN or CC officer NN of IN , , or CC has VHZ a DT material NN interest NN in IN , , any DT person NN who WP is VBZ a DT party NN to TO a DT material NN contract NN or CC transaction NN or CC a DT proposed VVN material NN contract NN or CC transaction NN with IN the DT corporation NN , , shall MD disclose VV in IN writing VVG to TO the DT corporation NN or CC request NN to TO have VH entered VVN in IN the DT minutes NNS of IN the DT meetings NNS of IN directors NNS the DT nature NN and CC extent NN of IN his PP$ or CC her PP$ interest NN , , and CC shall MD refrain VV from IN voting NN in IN respect NN of IN the DT material NN contract NN or CC transaction NN or CC proposed VVN material NN contract NN or CC transaction NN unless IN the DT contract NN or CC transaction NN is VBZ . SENT a DT an DT arrangement NN by IN way NN of IN security NN for IN money NN lent VVN to TO or CC obligations NNS undertaken VVN by IN the DT director NN for IN the DT benefit NN of IN the DT corporation NN or CC an DT affiliate NN . SENT b SYM one NN relating VVG primarily RB to TO his PP$ or CC her PP$ remuneration NN as IN a DT director NN , , officer NN , , employee NN or CC agent NN of IN the DT corporation NN or CC an DT affiliate NN . SENT c SYM one NN for IN indemnity NN of IN or CC insurance NN for IN directors NNS as IN contemplated VVN under IN the DT OBCA NP . SENT or CC d NN one NN with IN an DT affiliate NN . SENT However RB , , a DT director NN who WP is VBZ prohibited VVN by IN the DT OBCA NP from IN voting VVG on IN a DT material NN contract NN or CC proposed VVN material NN contract NN may MD be VB counted VVN in IN determining VVG whether IN a DT quorum NN is VBZ present JJ for IN the DT purpose NN of IN the DT resolution NN , , if IN the DT director NN disclosed VVD his PP$ or CC her PP$ interest NN in IN accordance NN with IN the DT OBCA NP and CC the DT contract NN or CC transaction NN was VBD reasonable JJ and CC fair JJ to TO the DT corporation NN at IN the DT time NN it PP was VBD approved VVN . SENT The DT Company's NNS by IN laws NNS provide VVP that IN the DT directors NNS shall MD from IN time NN to TO time NN determine VV by IN resolution NN the DT remuneration NN to TO be VB paid VVN to TO the DT directors NNS , , which WDT shall MD be VB in IN addition NN to TO the DT salary NN paid VVD to TO any DT officer NN or CC employee NN of IN the DT Company NN who WP is VBZ also RB a DT director NN . SENT The DT directors NNS may MD also RB by IN resolution NN award NN special JJ remuneration NN to TO any DT director NN in IN undertaking VVG any DT special JJ services NNS on IN the DT Company's NP behalf NN other JJ than IN the DT normal JJ work NN ordinarily RB required VVN of IN a DT director NN of IN the DT Company NN . SENT The DT by IN laws NNS provide VVP that DT confirmation NN of IN any DT such JJ resolution NN by IN the DT Company's NP shareholders NNS is VBZ not RB required VVN . SENT The DT Company's NNS by IN laws NNS also RB provide VVP that IN the DT directors NNS may MD . SENT a DT borrow VVP money NN upon IN the DT credit NN of IN the DT Company NN . SENT b SYM issue NN , , reissue NN , , sell NN or CC pledge NN bonds NNS , , debentures NNS , , notes NNS or CC other JJ evidences NNS of IN indebtedness NN or CC guarantee NN of IN the DT Company NN , , whether IN secured JJ or CC unsecured JJ . SENT c SYM to TO the DT extent NN permitted VVN by IN the DT OBCA NP , , give VVP directly RB or CC indirectly RB financial JJ assistance NN to TO any DT person NN by IN means NNS of IN a DT loan NN , , a DT guarantee NN on IN behalf NN of IN the DT Company NN to TO secure VV performance NN of IN any DT present JJ or CC future JJ indebtedness NN , , liability NN or CC other JJ obligation NN of IN any DT person NN , , or CC otherwise RB . SENT and CC d NN mortgage NN , , hypothecate VV , , pledge NN or CC otherwise RB create VV a DT security NN interest NN in IN all DT or CC any DT currently RB owned VVN or CC subsequently RB acquired VVN real JJ or CC personal JJ , , movable JJ or CC immovable JJ , , tangible JJ or CC intangible JJ , , property NN of IN the DT Company NN to TO secure VV any DT such JJ bonds NNS , , debentures NNS , , notes NNS or CC other JJ evidences NNS of IN indebtedness NN or CC guarantee NN or CC any DT other JJ present JJ or CC future JJ indebtedness NN , , liability NN or CC other JJ obligation NN of IN the DT Company NN . SENT The DT directors NNS may MD , , by IN resolution NN , , amend VV or CC repeal VV any DT by IN laws NNS that WDT regulate VV the DT business NN or CC affairs NNS of IN the DT Company NN . SENT The DT OBCA NP requires VVZ the DT directors NNS to TO submit VV any DT such JJ amendment NN or CC repeal NN to TO the DT Company's NP shareholders NNS at IN the DT next JJ meeting NN of IN shareholders NNS , , and CC the DT shareholders NNS may MD confirm VV , , reject VV or CC amend VV the DT amendment NN or CC repeal NN . SENT Retirement NN of IN Directors NNS Under IN the DT Company's NP retirement NN policy NN , , directors NNS elected VVN or CC appointed VVN before IN April NP 14 CD , , 1998 CD are VBP required VVN to TO retire VV at IN the DT age NN of IN 75 CD and CC directors NNS elected VVN or CC appointed VVN on IN or CC after IN April NP 14 CD , , 1998 CD are VBP required VVN to TO retire VV at IN the DT age NN of IN 70 CD . SENT 62 CD Directors NPS Share NP Ownership NP As IN of IN March NP 17 CD , , 2004 CD , , directors NNS , , other JJ than IN Mr NP . SENT Boyd NP , , are VBP required VVN to TO own VV the DT equivalent NN of IN at IN least JJS three CD years NNS of IN their PP$ annual JJ retainer NN fee NN in IN the DT Company's NP stock NN . SENT Directors NNS have VHP a DT period NN of IN three CD years NNS to TO achieve VV this DT ownership NN level NN either CC through IN open JJ market NN purchases NNS or CC through IN participation NN in IN the DT Company's NP incentive NN share NN purchase NN plan NN . SENT Meetings NNS of IN Shareholders NNS The DT OBCA NP requires VVZ the DT Company NN to TO call VV an DT annual JJ shareholders NNS meeting VVG not RB later RBR than IN 15 CD months NNS after IN holding VVG the DT last JJ preceding JJ annual JJ meeting NN and CC permits VVZ the DT Company NN to TO call VV a DT special JJ shareholders NNS meeting NN at IN any DT time NN . SENT In IN addition NN , , in IN accordance NN with IN the DT OBCA NP , , the DT holders NNS of IN not RB less JJR than IN 5 CD of IN the DT Company's NP shares NNS carrying VVG the DT right NN to TO vote VV at IN a DT meeting NN sought VVD to TO be VB held VVN may MD requisition VV our PP$ directors NNS to TO call VV a DT special JJ shareholders NNS meeting NN for IN the DT purposes NNS stated VVN in IN the DT requisition NN . SENT The DT Company NN is VBZ required VVN to TO mail VV a DT notice NN of IN meeting NN and CC management NN information NN circular JJ to TO registered JJ shareholders NNS not RB less JJR than IN 21 CD days NNS and CC not RB more JJR than IN 50 CD days NNS prior RB to TO the DT date NN of IN any DT annual JJ or CC special JJ shareholders NNS meeting NN . SENT These DT materials NNS also RB are VBP filed VVN with IN Canadian JJ securities NNS regulatory JJ authorities NNS and CC the DT SEC NP . SENT The DT Company's NNS by IN laws NNS provide VVP that IN a DT quorum NN of IN two CD shareholders NNS in IN person NN or CC represented VVD by IN proxy JJ holding NN or CC representing VVG by IN proxy NN not RB less JJR than IN 10 CD of IN the DT Company's NP issued VVD shares NNS carrying VVG the DT right NN to TO vote VV at IN the DT meeting NN is VBZ required VVN to TO transact VV business NN at IN a DT shareholders NNS meeting NN . SENT Shareholders NNS , , and CC their PP$ duly RB appointed VVN proxies NNS and CC corporate JJ representatives NNS , , as RB well RB as IN the DT Company's NP auditors NNS , , are VBP entitled VVN to TO be VB admitted VVN to TO the DT Company's NP annual JJ and CC special JJ shareholders NNS meetings NNS . SENT Authorized JJ Capital NP The DT Company's NP authorized JJ capital NN consists VVZ of IN an DT unlimited JJ number NN of IN shares NNS of IN one CD class NN designated VVN as IN common JJ shares NNS . SENT The DT Company NN may MD not RB create VV any DT class NN or CC series NN of IN shares NNS or CC make VV any DT modification NN to TO the DT provisions NNS attaching VVG to TO the DT Company's NP common JJ shares NNS without IN the DT affirmative JJ vote NN of IN two CD thirds NNS of IN the DT votes NNS cast VVN by IN the DT holders NNS of IN the DT common JJ shares NNS . SENT The DT Company's NP common JJ shares NNS do VVP not RB have VH pre NP emptive JJ rights NNS to TO purchase VV additional JJ shares NNS . SENT Shareholder NN Rights NP Plan NP On IN April NP 22 CD , , 1999 CD , , the DT Board NP of IN Directors NPS of IN the DT Company NN adopted VVD a DT shareholder NN rights NNS plan VVP the DT Plan NN to TO replace VV the DT original JJ shareholder NN rights NNS plan NN dated VVN May NP 10 CD , , 1989 CD , , to TO take VV effect NN at IN the DT close NN of IN business NN on IN May NP 10 CD , , 1999 CD the DT Record NP Date NN , , subject JJ to TO shareholder NN approval NN , , confirmation NN and CC ratification NN , , which WDT was VBD received VVN on IN June NP 25 CD , , 1999 CD . SENT The DT Company's NP shareholders NNS reconfirmed VVD the DT Plan NN on IN June NP 21 CD , , 2002 CD . SENT The DT rights NNS issued VVN under IN the DT Plan NP will MD expire VV the DT Expiration NN Time NN at IN the DT close NN of IN the DT Company's NP annual JJ meeting NN in IN 2009 CD , , unless IN earlier RBR redeemed VVN or CC exchanged VVN by IN the DT Company NN and CC subject JJ to TO shareholder NN re IN ratification NN of IN the DT Plan NN by IN the DT shareholders NNS at IN the DT Company's NP annual JJ meeting NN to TO be VB held VVN in IN 2005 CD . SENT Pursuant JJ to TO the DT Plan NP , , the DT Board NP declared VVD a DT distribution NN of IN one CD right NN a DT Right NP for IN each DT outstanding JJ common JJ share NN of IN the DT Company NN to TO shareholders NNS of IN record NN at IN the DT close NN of IN business NN on IN the DT Record NP Date NN and CC authorized VVD the DT issuance NN of IN one CD Right RB for IN each DT common JJ share NN including VVG the DT common JJ shares NNS offered VVD hereby RB issued VVN after IN the DT Record NP Date NN and CC prior RB to TO the DT Separation NN Time NN described VVD below IN and CC the DT Expiration NN Time NN . SENT The DT Rights NPS will MD separate VV from IN the DT common JJ shares NNS at IN the DT time NN the DT Separation NN Time NN which WDT is VBZ the DT close NN of IN business NN on IN the DT eighth JJ trading NN day NN or CC such JJ later JJR day NN as IN determined VVN by IN the DT Board NP of IN Directors NPS after IN the DT earlier RBR of IN the DT first JJ public JJ announcement NN of IN the DT acquisition NN of IN , , or CC intention NN to TO acquire VV , , beneficial JJ ownership NN of IN 20 CD of IN the DT common JJ shares NNS of IN the DT Company NN by IN any DT person NN other JJ than IN in IN accordance NN with IN the DT terms NNS of IN the DT Plan NN , , or CC when WRB a DT Permitted VVN Bid NP described VVD below IN or CC competing VVG Permitted VVN Bid NP ceases VVZ to TO qualify VV as RB such JJ . SENT In IN order NN to TO constitute VV a DT Permitted VVN Bid NP , , an DT offer NN must MD be VB made VVN in IN compliance NN with IN the DT Plan NP and CC must MD be VB made VVN to TO all DT shareholders NNS other JJ than IN the DT offeror NN , , must MD be VB open JJ for IN at IN least JJS 75 CD days NNS and CC be VB accepted VVN by IN shareholders NNS holding VVG more JJR than IN 50 CD of IN the DT outstanding JJ voting NN shares NNS and CC , , if IN so RB accepted VVN , , must MD be VB extended VVN for IN a DT further JJR 10 CD business NN day NN period NN . SENT 63 CD Disclosure NN of IN Share NP Ownership NP The NP Securities NPS Act NP Ontario NP provides VVZ that IN a DT person NN or CC company NN who WP beneficially RB owns VVZ , , directly RB or CC indirectly RB , , voting VVG securities NNS of IN an DT issuer NN or CC who WP exercises VVZ control NN or CC direction NN over IN voting VVG securities NNS of IN an DT issuer NN or CC a DT combination NN of IN both DT , , carrying VVG more JJR than IN 10 CD of IN the DT voting NN rights NNS attached VVN to TO all PDT the DT issuer's JJ outstanding JJ voting NN securities NNS an DT insider NN must MD , , within IN 10 CD days NNS of IN becoming VVG an DT insider NN , , file VV a DT report NN in IN the DT required VVN form NN effective JJ the DT date NN on IN which WDT the DT person NN became VVD an DT insider NN , , disclosing VVG any DT direct JJ or CC indirect JJ beneficial JJ ownership NN of IN , , or CC control NN or CC direction NN over RB , , securities NNS of IN the DT reporting VVG issuer NN . SENT The DT Securities NPS Act NP Ontario NP also RB provides VVZ for IN the DT filing NN of IN a DT report NN by IN an DT insider NN of IN a DT reporting NN issuer NN who WP acquires VVZ or CC transfers VVZ securities NNS of IN the DT issuer NN . SENT This DT report NN must MD be VB filed VVN within IN 10 CD days NNS after IN the DT end NN of IN the DT month NN in IN which WDT the DT acquisition NN or CC transfer NN takes VVZ place NN . SENT The DT rules NNS in IN the DT United NP States NPS governing VVG the DT ownership NN threshold NN above IN which WDT shareholder NN ownership NN must MD be VB disclosed VVN are VBP more RBR stringent JJ than IN those DT discussed VVN above JJ . SENT Section NN 13 CD of IN the DT Securities NPS Exchange NP Act NP of IN 1934 CD the DT Exchange NP Act NP imposes VVZ reporting VVG requirements NNS on IN persons NNS who WP acquire VV beneficial JJ ownership NN as IN such JJ term NN is VBZ defined VVN in IN the DT Rule NP 13 CD d SYM 3 CD under IN the DT Exchange NP Act NP of IN more JJR than IN 5 CD per IN cent NN of IN a DT class NN of IN an DT equity NN security NN registered VVN under IN Section NP 12 CD of IN the DT Exchange NP Act NP . SENT In IN general JJ , , such JJ persons NNS must MD file VV , , within IN 10 CD days NNS after IN such JJ acquisition NN , , a DT report NN of IN beneficial JJ ownership NN with IN the DT SEC NP containing VVG the DT information NN prescribed VVN by IN the DT regulations NNS under IN Section NP 13 CD of IN the DT Exchange NP Act NP . SENT This DT information NN is VBZ also RB required VVN to TO be VB sent VVN to TO the DT issuer NN of IN the DT securities NNS and CC to TO each DT exchange NN where WRB the DT securities NNS are VBP traded VVN . SENT Material NN Contracts NNS The DT following NN is VBZ the DT material NN contract NN entered VVD into IN by IN the DT Company NN during IN the DT two CD years NNS preceding VVG the DT date NN of IN this DT Annual NP Report NP . SENT The DT Company NN entered VVN into IN an DT amended VVN and CC restated VVN credit NN agreement NN on IN December NP 23 CD , , 2004 CD with IN a DT group NN of IN financial JJ institutions NNS providing VVG for IN a DT revolving JJ bank NN credit NN facility NN of IN up RB to TO 100 CD million CD . SENT The DT facility NN matures VVZ and CC all DT indebtedness NN thereunder RB is VBZ due JJ and CC payable JJ on IN December NP 23 CD , , 2007 CD . SENT The DT Company NN , , with IN the DT consent NN of IN lenders NNS representing VVG 662 CD 3 CD of IN the DT aggregate JJ commitments NNS under IN the DT facility NN , , has VHZ the DT option NN to TO extend VV the DT term NN of IN the DT facility NN for IN three CD additional JJ one CD year NN terms NNS to TO December NP 23 CD , , 2010 CD . SENT The DT credit NN facility NN is VBZ available JJ in IN multiple JJ currencies NNS through IN prime JJ rate NN , , base NN rate NN and CC LIBOR NP advances NNS and CC through IN bankers NNS acceptances NNS , , priced VVN at IN the DT applicable JJ rate NN plus IN an DT applicable JJ margin NN . SENT The DT lenders NNS under IN the DT facility NN are VBP each DT paid VVD a DT commitment NN fee NN at IN a DT rate NN that WDT ranges VVZ from IN 0 CD . SENT 875 CD to TO 0 CD . SENT 50 CD , , depending VVG on IN the DT financial JJ ratios NNS . SENT Payment NN and CC performance NN of IN the DT Company's NP obligations NNS under IN the DT facility NN are VBP secured VVN by IN substantially RB all DT property NN relating VVG to TO the DT LaRonde NP Mine NP and CC the DT El NP Coco NP property NN . SENT The DT facility NN limits NNS , , among IN other JJ things NNS , , the DT Company's NP ability NN to TO incur VV additional JJ indebtedness NN , , pay NN dividends NNS or CC make VV payments NNS in IN respect NN of IN its PP$ common JJ shares NNS , , make VV investments NNS or CC loans NNS , , transfer VV the DT Company's NP assets NNS or CC make VV expenditures NNS relating VVG to TO property NN secured VVN under IN the DT credit NN agreement NN at IN that DT time NN that WDT are VBP not RB consistent JJ with IN the DT mine JJ plan NN and CC operating NN budget NN delivered VVN pursuant JJ to TO the DT credit NN facility NN . SENT Further RBR , , the DT agreement NN requires VVZ the DT Company NN to TO maintain VV specified JJ financial JJ ratios NNS and CC meet VV financial JJ condition NN covenants NNS . SENT Under IN the DT terms NNS of IN the DT facility NN , , the DT Company NN has VHZ entered VVN into IN hedge JJ agreements NNS to TO ensure VV that IN projected VVN revenues NNS from IN sales NNS of IN metals NNS are VBP sufficient JJ to TO reasonably RB ensure VV that IN the DT Company NN will MD be VB in IN compliance NN with IN financial JJ and CC other JJ covenants NNS of IN the DT credit NN agreement NN . SENT Exchange NP Controls NP Canada NP has VHZ no DT system NN of IN exchange NN controls NNS . SENT There EX are VBP no DT Canadian JJ restrictions NNS on IN the DT repatriation NN of IN capital NN or CC earnings NNS of IN a DT Canadian JJ public JJ company NN to TO non JJ resident NN investors NNS . SENT There EX are VBP no DT laws NNS in IN Canada NP or CC exchange NN restrictions NNS affecting VVG the DT remittance NN of IN dividends NNS , , profits NNS , , interest NN , , royalties NNS and CC other JJ payments NNS to TO non JJ resident NN holders NNS of IN the DT Company's NP securities NNS , , except IN as RB discussed VVN in IN Taxation NP below RB . SENT Restrictions NNS on IN Share NN Ownership NN by IN Non JJ Canadians NNS There EX are VBP no DT limitations NNS under IN the DT laws NNS of IN Canada NP or CC in IN the DT constating VVG documents NNS of IN the DT Company NN on IN the DT right NN of IN foreigners NNS to TO hold VV or CC vote VV securities NNS of IN the DT Company NN , , except IN that WDT the DT Investment NP Canada NP Act NP may MD require VV review NN and CC approval NN by IN the DT Minister NP of IN Industry NP Canada NP of IN certain JJ acquisitions NNS of IN control NN of IN the DT 64 CD Company NN by IN a DT non JJ Canadian NP . SENT The DT threshold NN for IN acquisitions NNS of IN control NN is VBZ generally RB defined VVN as IN being VBG one CD third JJ or CC more RBR of IN the DT voting NN shares NNS of IN the DT Company NN . SENT Non JJ Canadian NP generally RB means VVZ an DT individual NN who WP is VBZ not RB a DT Canadian JJ citizen NN , , or CC a DT corporation NN , , partnership NN , , trust NN or CC joint JJ venture NN that WDT is VBZ ultimately RB controlled VVN by IN non JJ Canadians NNS . SENT Canadian NP Federal NP Income NP Tax NP Considerations NNS The DT following NN is VBZ a DT brief JJ summary NN of IN some DT of IN the DT principal JJ Canadian JJ federal JJ income NN tax NN consequences NNS to TO a DT holder NN of IN common JJ shares NNS of IN the DT Company NN a DT U NP . SENT S NP . SENT holder NN who WP deals VVZ at IN arm's JJ length NN with IN the DT Company NN , , holds VVZ the DT shares NNS as IN capital NN property NN and CC who WP , , for IN the DT purposes NNS of IN the DT Income NP Tax NP Act NP Canada NP the DT Act NP and CC the DT Canada NP United NP States NPS Income NP Tax NP Convention NP the DT Treaty NP , , is VBZ at IN all DT relevant JJ times NNS resident NN in IN the DT United NP States NPS , , is VBZ not RB and CC is VBZ not RB deemed VVN to TO be VB resident JJ in IN Canada NP and CC does VVZ not RB use VV or CC hold VV and CC is VBZ not RB deemed VVN to TO use VV or CC hold VV the DT shares NNS in IN carrying VVG on IN a DT business NN in IN Canada NP . SENT Special JJ rules NNS , , which WDT are VBP not RB discussed VVN below RB , , may MD apply VV to TO a DT U NP . SENT S NP . SENT holder NN which WDT is VBZ an DT insurer NN that WDT carries VVZ on IN business NN in IN Canada NP and CC elsewhere RB . SENT Limited JJ liability NN companies NNS LLCs NNS do VVP not RB qualify VV as IN resident NN in IN the DT United NP States NPS for IN purposes NNS of IN the DT Treaty NP . SENT This DT summary NN is VBZ of IN a DT general JJ nature NN only RB and CC is VBZ not RB , , and CC should MD not RB be VB interpreted VVN as RB , , legal JJ or CC tax NN advice NN to TO any DT particular JJ U NP . SENT S NP . SENT holder NN and CC no DT representation NN is VBZ made VVN with IN respect NN to TO the DT Canadian JJ income NN tax NN consequences NNS to TO any DT particular JJ person NN . SENT Accordingly RB , , U NP . SENT S NP . SENT holders NNS are VBP advised VVN to TO consult VV their PP$ own JJ tax NN advisors NNS with IN respect NN to TO their PP$ particular JJ circumstances NNS . SENT Under IN the DT Act NP and CC the DT Treaty NP , , a DT U NP . SENT S NP . SENT holder NN of IN common JJ shares NNS will MD generally RB be VB subject JJ to TO a DT 15 CD withholding NN tax NN on IN dividends NNS paid VVN or CC credited VVN or CC deemed VVN by IN the DT Act NP to TO have VH been VBN paid VVN or CC credited VVN on IN such JJ shares NNS . SENT The DT withholding NN tax NN rate NN is VBZ 5 CD where WRB the DT U NP . SENT S NP . SENT holder NN is VBZ a DT corporation NN that WDT beneficially RB owns VVZ at IN least JJS 10 CD of IN the DT voting NN shares NNS of IN the DT Company NN and CC the DT dividends NNS may MD be VB exempt JJ from IN such JJ withholding NN in IN the DT case NN of IN some DT U NP . SENT S NP . SENT holders NNS such JJ as IN qualifying VVG pension NN funds NNS and CC charities NNS . SENT In IN general NN , , a DT U NP . SENT S NP . SENT holder NN will MD not RB be VB subject JJ to TO Canadian JJ income NN tax NN on IN capital NN gains NNS arising VVG on IN the DT disposition NN of IN shares NNS of IN the DT Company NN unless IN at IN a DT time NN that IN the DT Company's NP shares NNS are VBP listed VVN on IN the DT TSX NP or CC the DT NYSE NP i NP at IN any DT time NN in IN the DT five CD year NN period NN immediately RB preceding VVG the DT disposition NN , , 25 CD or CC more JJR of IN the DT shares NNS of IN any DT class NN or CC series NN of IN the DT capital NN stock NN of IN the DT Company NN was VBD owned VVN by IN the DT U NP . SENT S NP . SENT holder NN or CC persons NNS with IN whom WP the DT U NP . SENT S NP . SENT holder NN did VVD not RB deal VV at IN arm's JJ length NN , , and CC ii NNS the DT value NN of IN the DT common JJ shares NNS of IN the DT Company NN at IN the DT time NN of IN the DT disposition NN derives VVZ principally RB from IN real JJ property NN as IN defined VVN in IN the DT Treaty NP situated VVN in IN Canada NP . SENT For IN this DT purpose NN , , the DT Treaty NP defines VVZ real JJ property NN situated VVN in IN Canada NP to TO include VV rights NNS to TO explore VV for IN or CC exploit VV mineral NN deposits NNS and CC other JJ natural JJ resources NNS situated VVN in IN Canada NP , , rights NNS to TO amounts NNS computed VVN by IN reference NN to TO the DT amount NN or CC value NN of IN production NN from IN such JJ resources NNS , , certain JJ other JJ rights NNS in IN respect NN of IN natural JJ resources NNS situated VVN in IN Canada NP and CC shares NNS of IN a DT corporation NN the DT value NN of IN whose WP$ shares NNS is VBZ derived VVN principally RB from IN real JJ property NN situated VVN in IN Canada NP . SENT United NP States NPS Federal NP Income NP Tax NP Considerations NNS The DT following NN is VBZ a DT brief JJ summary NN of IN some DT of IN the DT principal JJ U NP . SENT S NP . SENT federal JJ income NN tax NN consequences NNS to TO a DT holder NN of IN common JJ shares NNS of IN the DT Company NP , , who WP deals VVZ at IN arm's JJ length NN with IN the DT Company NN , , holds VVZ the DT shares NNS as IN capital NN property NN and CC who WP , , for IN the DT purposes NNS of IN the DT Internal NP Revenue NP Code NP of IN 1986 CD , , as RB amended VVD the DT Code NP and CC the DT Treaty NP , , is VBZ at IN all DT relevant JJ times NNS a DT U NP . SENT S NP Stockholder NN as RB defined VVN below RB , , is VBZ not RB and CC is VBZ not RB deemed VVN to TO be VB resident JJ in IN Canada NP and CC does VVZ not RB use VV or CC hold VV and CC is VBZ not RB deemed VVN to TO use VV or CC hold VV the DT shares NNS in IN carrying VVG on IN a DT business NN in IN Canada NP . SENT As RB used VVN herein RB , , the DT term NN U NP . SENT S NP . SENT Stockholder NN means VVZ a DT holder NN of IN common JJ shares NNS of IN the DT Company NN who WP for IN United NP States NPS federal JJ income NN tax NN purposes NNS . SENT a DT is VBZ a DT citizen NN or CC resident NN of IN the DT United NP States NPS . SENT b SYM is VBZ a DT corporation NN , , partnership NN , , or CC other JJ entity NN created VVN or CC organized VVN in IN or CC under IN the DT laws NNS of IN the DT United NP States NPS or CC of IN any DT political JJ subdivision NN thereof RB . SENT c SYM is VBZ an DT estate NN the DT income NN of IN which WDT is VBZ subject JJ to TO United NP States NPS federal JJ income NN taxation NN regardless RB of IN its PP$ source NN . SENT or CC d NN is VBZ a DT trust NN subject JJ to TO both CC the DT primary JJ supervision NN of IN a DT U NP . SENT S NP . SENT court NN and CC the DT control NN of IN one CD or CC more JJR U NP . SENT S NP . SENT persons NNS with IN respect NN to TO substantial JJ trust NN decisions NNS . SENT 65 CD Special JJ rules NNS , , which WDT are VBP not RB discussed VVN below RB , , may MD apply VV to TO a DT U NP . SENT S NP . SENT Stockholder NN that WDT is VBZ an DT insurer NN that WDT carries VVZ on IN business NN in IN Canada NP and CC elsewhere RB . SENT Limited JJ liability NN companies NNS LLCs NNS do VVP not RB qualify VV as IN resident NN in IN the DT United NP States NPS for IN purposes NNS of IN the DT Treaty NP . SENT These DT summaries NNS do VVP not RB describe VV United NP States NPS federal JJ estate NN and CC gift NN tax NN considerations NNS , , nor CC do VVP they PP describe VVP regional JJ , , state NN and CC local JJ tax NN considerations NNS within IN the DT United NP States NPS . SENT The DT following VVG summaries NNS do VVP not RB purport VV to TO be VB a DT comprehensive JJ description NN of IN all DT of IN the DT possible JJ tax NN considerations NNS that WDT may MD be VB relevant JJ to TO a DT decision NN to TO purchase VV , , hold VV or CC dispose VV of IN the DT common JJ shares NNS . SENT In IN particular JJ , , these DT summaries NNS only RB deal VVP with IN a DT holder NN who WP will MD hold VV the DT common JJ shares NNS as IN a DT capital NN asset NN and CC who WP does VVZ not RB own JJ , , directly RB or CC indirectly RB , , 10 CD or CC more JJR of IN our PP$ voting NN shares NNS or CC of IN any DT of IN our PP$ direct JJ or CC indirect JJ subsidiaries NNS . SENT This DT summary NN does VVZ not RB address VV all DT of IN the DT tax NN consequences NNS that WDT may MD be VB relevant JJ to TO holders NNS in IN light NN of IN their PP$ particular JJ circumstances NNS , , including VVG but CC not RB limited JJ to TO application NN of IN alternative JJ minimum JJ tax NN or CC rules NNS applicable JJ to TO taxpayers NNS in IN special JJ circumstances NNS . SENT Special JJ rules NNS may MD apply VV , , for IN instance NN , , to TO tax VV exempt JJ entities NNS , , banks NNS , , insurance NN companies NNS , , S NP corporations NNS , , dealers NNS in IN securities NNS or CC currencies NNS , , persons NNS who WP will MD hold VV common JJ shares NNS as IN a DT position NN in IN a DT straddle NN , , hedge JJ , , constructive JJ sale NN , , or CC conversion NN transaction NN for IN U NP . SENT S NP . SENT tax NN purposes NNS , , persons NNS who WP have VHP a DT functional JJ currency NN other JJ than IN the DT U NP . SENT S NP . SENT dollar NN , , or CC persons NNS subject JJ to TO U NP . SENT S NP . SENT taxation NN as IN expatriates NNS . SENT Furthermore RB , , in IN general NN , , this DT discussion NN does VVZ not RB address VV the DT tax NN consequences NNS applicable JJ to TO holders NNS that WDT are VBP treated VVN as IN partnerships NNS or CC other JJ pass NN through IN entities NNS for IN U NP . SENT S NP . SENT federal JJ income NN tax NN purposes NNS . SENT This DT summary NN is VBZ of IN a DT general JJ nature NN only RB and CC is VBZ not RB , , and CC should MD not RB be VB interpreted VVN as RB , , legal JJ or CC tax NN advice NN to TO any DT particular JJ U NP . SENT S NP . SENT Stockholder NN and CC no DT representation NN is VBZ made VVN with IN respect NN to TO the DT U NP . SENT S NP . SENT income NN tax NN consequences NNS to TO any DT particular JJ person NN . SENT Accordingly RB , , U NP . SENT S NP . SENT Stockholders NNS are VBP advised VVN to TO consult VV their PP$ own JJ tax NN advisors NNS with IN respect NN to TO their PP$ particular JJ circumstances NNS . SENT Dividends NNS For IN United NP States NPS federal JJ income NN tax NN purposes NNS , , the DT gross JJ amount NN of IN all DT distributions NNS , , if IN any DT , , paid VVN with IN respect NN to TO the DT common JJ shares NNS out IN of IN current JJ or CC accumulated VVN earnings NNS and CC profits NNS E NN P NN to TO a DT U NP . SENT S NP . SENT Stockholder NN generally RB will MD be VB treated VVN as IN foreign JJ source NN dividend NN income NN to TO such JJ holder NN , , even RB though IN the DT U NP . SENT S NP . SENT Stockholder NN generally RB receives VVZ only RB 85 CD of IN that DT amount NN after IN giving VVG effect NN to TO the DT Canadian JJ withholding NN tax NN as IN reduced VVN by IN the DT Treaty NP . SENT United NP States NPS corporations NNS that WDT hold VVP the DT common JJ shares NNS generally RB will MD not RB be VB entitled VVN to TO the DT dividends NNS received VVD deduction NN that WDT applies VVZ to TO dividends NNS received VVN from IN United NP States NPS corporations NNS . SENT To TO the DT extent NN a DT distribution NN exceeds VVZ E NN P NN , , it PP will MD be VB treated VVN first RB as IN a DT return NN of IN capital NN to TO the DT extent NN of IN the DT U NP . SENT S NP . SENT Stockholder's NP adjusted JJ basis NN and CC then RB as IN gain NN from IN the DT sale NN of IN a DT capital NN asset NN . SENT In IN the DT case NN of IN a DT U NP . SENT S NP . SENT Stockholder NN that WDT is VBZ an DT individual NN , , estate NN or CC trust NN , , gains NNS from IN the DT sale NN of IN a DT capital NN asset NN held VVN for IN longer JJR than IN twelve NN months NNS are VBP taxable JJ at IN a DT maximum JJ federal JJ income NN tax NN rate NN of IN 15 CD , , while IN gains NNS from IN the DT sale NN of IN a DT capital NN asset NN that WDT does VVZ not RB meet VV such JJ holding NN period NN are VBP taxable JJ at IN the DT rates NNS applicable JJ to TO ordinary JJ income NN . SENT Dividends NNS paid VVD prior RB to TO 2009 CD to TO a DT U NP . SENT S NP . SENT Stockholder NN that WDT is VBZ an DT individual NN , , estate NN or CC trust NN generally RB are VBP also RB subject JJ to TO the DT 15 CD maximum NN rate NN . SENT Special JJ rules NNS may MD apply VV , , however RB , , to TO cause VV such JJ dividends NNS to TO be VB taxable JJ at IN the DT higher JJR rates NNS applicable JJ to TO ordinary JJ income NN . SENT For IN example NN , , the DT reduced JJ tax NN rates NNS are VBP not RB available JJ with IN respect NN to TO a DT dividend NN on IN shares NNS where WRB the DT U NP . SENT S NP . SENT Stockholder NN does VVZ not RB continuously RB own JJ such JJ shares NNS for IN more JJR than IN 60 CD days NNS during IN the DT 120 CD day NN period NN beginning VVG 60 CD days NNS before IN the DT ex JJ dividend NN date NN . SENT In IN addition NN , , the DT reduced JJ tax NN rates NNS are VBP not RB available JJ with IN respect NN to TO dividends NNS received VVN from IN a DT foreign JJ corporation NN that WDT was VBD a DT foreign JJ investment NN company NN , , a DT passive JJ foreign JJ investment NN company NN , , or CC a DT foreign JJ personal JJ holding NN company NN in IN either CC the DT taxable JJ year NN of IN the DT distribution NN or CC the DT preceding JJ taxable JJ year NN . SENT The DT reduced JJ tax NN rates NNS generally RB are VBP available JJ only RB with IN respect NN to TO dividends NNS received VVN from IN U NP . SENT S NP . SENT corporations NNS , , and CC from IN non JJ U NP . SENT S NP . SENT corporations NNS a DT that WDT are VBP eligible JJ for IN the DT benefits NNS of IN a DT comprehensive JJ income NN tax NN treaty NN with IN the DT United NP States NPS that IN the DT U NP . SENT S NP . SENT Treasury NP Department NP determines VVZ to TO be VB satisfactory JJ and CC that WDT contains VVZ an DT exchange NN of IN information NN program NN , , or CC b NN whose WP$ stock NN is VBZ readily RB tradeable JJ on IN an DT established JJ securities NNS market NN in IN the DT United NP States NPS . SENT Many JJ other JJ complex NN and CC special JJ rules NNS may MD apply VV as IN a DT condition NN to TO , , or CC as IN a DT result NN of IN , , the DT application NN of IN the DT reduced JJ tax NN rate NN on IN dividends NNS . SENT Moreover RB , , the DT applicability NN of IN the DT reduced JJ tax NN rate NN on IN dividends NNS received VVN from IN non JJ U NP . SENT S NP . SENT corporations NNS is VBZ subject JJ to TO change VV . SENT The DT United NP States NPS tax NN authorities NNS have VHP announced VVN their PP$ intention NN to TO promulgate VV rules NNS that WDT would MD permit VV U NP . SENT S NP . SENT Stockholders NNS to TO rely VV on IN certifications NNS from IN issuers NNS to TO establish VV the DT applicability NN of IN the DT reduced JJ dividend NN tax NN rate NN . SENT U NP . SENT S NP . SENT Stockholders NNS are VBP advised VVN to TO consult VV their PP$ own JJ tax NN advisors NNS . SENT 66 CD For IN United NP States NPS federal JJ income NN tax NN purposes NNS , , the DT amount NN of IN any DT dividend NN paid VVN in IN Canadian JJ dollars NNS will MD be VB the DT United NP States NPS dollar NN value NN of IN the DT Canadian JJ dollar NN at IN the DT exchange NN rate NN in IN effect NN on IN the DT date NN of IN receipt NN , , whether IN or CC not RB the DT Canadian JJ dollar NN is VBZ converted VVN into IN United NP States NPS dollars NNS at IN that DT time NN . SENT Gain NN or CC loss NN recognized VVN by IN a DT U NP . SENT S NP . SENT Stockholder NN on IN a DT sale NN or CC exchange NN of IN Canadian JJ dollar NN will MD be VB United NP States NPS source NN ordinary JJ income NN or CC loss NN . SENT The DT withholding NN tax NN imposed VVN by IN Canada NP generally RB is VBZ a DT creditable JJ foreign JJ tax NN for IN United NP States NPS federal JJ income NN tax NN purposes NNS . SENT Therefore RB , , the DT U NP . SENT S NP . SENT Stockholder NN generally RB will MD be VB entitled VVN to TO include VV the DT amount NN withheld VVN as IN a DT foreign JJ tax NN paid VVN in IN computing VVG a DT foreign JJ tax NN credit NN or CC in IN computing VVG a DT deduction NN for IN foreign JJ income NN taxes NNS paid VVD , , if IN the DT holder NN does VVZ not RB elect VV to TO use VV the DT foreign JJ tax NN credit NN provisions NNS of IN the DT Code NP . SENT The DT Code NP , , however RB , , imposes VVZ a DT number NN of IN limitations NNS on IN the DT use NN of IN foreign JJ tax NN credits NNS , , based VVN on IN the DT particular JJ facts NNS and CC circumstances NNS of IN each DT taxpayer NN . SENT Investors NNS should MD consult VV their PP$ tax NN advisors NNS regarding VVG the DT availability NN of IN the DT foreign JJ tax NN credit NN . SENT Capital NN Gains NNS Subject JJ to TO the DT discussion NN below IN under IN the DT heading VVG Passive NP Foreign NP Investment NP Company NP Considerations NNS , , gain NN or CC loss NN recognized VVN by IN a DT U NP . SENT S NP . SENT Stockholder NN on IN the DT sale NN or CC other JJ disposition NN of IN the DT common JJ shares NNS will MD be VB subject JJ to TO United NP States NPS federal JJ income NN taxation NN as IN capital NN gain NN or CC loss NN in IN an DT amount NN equal JJ to TO the DT difference NN between IN such JJ U NP . SENT S NP . SENT Stockholder's NP adjusted JJ basis NN in IN the DT common JJ shares NNS and CC the DT amount NN realized VVD upon IN its PP$ disposition NN . SENT Gain NN on IN the DT sale NN of IN common JJ shares NNS held VVN for IN more JJR than IN one CD year NN by IN a DT U NP . SENT S NP . SENT Stockholder NN that WDT is VBZ an DT individual NN , , estate NN or CC trust NN will MD be VB taxable JJ at IN a DT maximum JJ rate NN of IN 15 CD . SENT A DT reduced JJ rate NN does VVZ not RB apply VV to TO capital NN gains NNS realized VVN by IN a DT U NP . SENT S NP . SENT Stockholder NN that WDT is VBZ a DT corporation NN . SENT Capital NN losses NNS are VBP generally RB deductible JJ only RB against IN capital NN gains NNS and CC not RB against IN ordinary JJ income NN . SENT In IN the DT case NN of IN an DT individual NN , , however RB , , unused JJ capital NN losses NNS in IN excess NN of IN capital NN gains NNS may MD offset VV up RB to TO 3 CD , , 000 CD annually RB of IN ordinary JJ income NN . SENT Capital NN gain NN or CC loss NN recognized VVN by IN a DT U NP . SENT S NP . SENT Stockholder NN on IN the DT sale NN or CC other JJ disposition NN of IN common JJ shares NNS will MD generally RB be VB sourced VVN in IN the DT United NP States NPS . SENT Passive NP Foreign NP Investment NP Company NP Considerations NNS The DT Company NN will MD be VB classified VVN as IN a DT passive JJ foreign JJ investment NN company NN PFIC JJ for IN United NP States NPS federal JJ income NN tax NN purposes NNS if IN either DT i NP 75 CD or CC more JJR of IN its PP$ gross JJ income NN is VBZ passive JJ income NN or CC ii NN on IN average NN for IN the DT taxable JJ year NN , , 50 CD or CC more JJR of IN its PP$ assets NNS by IN value NN produce NN or CC are VBP held VVN for IN the DT production NN of IN passive JJ income NN . SENT Based VVN on IN projections NNS of IN the DT Company's NP income NN and CC assets NNS and CC the DT manner NN in IN which WDT the DT Company NN intends VVZ to TO manage VV its PP$ business NN , , the DT Company NN expects VVZ that IN the DT Company NN will MD not RB be VB a DT PFIC JJ . SENT However RB , , there EX can MD be VB no DT assurance NN that IN this DT will MD actually RB be VB the DT case NN . SENT In IN reaching VVG the DT conclusion NN that IN the DT Company NN does VVZ not RB expect VV to TO be VB a DT PFIC JJ , , the DT Company NN has VHZ valued VVN its PP$ assets NNS based VVN on IN the DT price NN per IN share NN of IN the DT common JJ shares NNS . SENT For IN purposes NNS of IN applying VVG the DT PFIC JJ rules NNS to TO the DT Company NN , , such PDT a DT valuation NN method NN results NNS in IN the DT attribution NN of IN substantial JJ value NN to TO the DT Company's NP intangible JJ assets NNS including VVG goodwill NN and CC other JJ potential JJ resource NN related VVN assets NNS that WDT are VBP considered VVN neither RB to TO produce VV nor CC to TO be VB held VVN for IN the DT production NN of IN passive JJ income NN for IN purposes NNS of IN the DT PFIC JJ rules NNS . SENT The DT Company NN believes VVZ that IN this DT is VBZ a DT reasonable JJ method NN of IN valuing VVG our PP$ non JJ passive JJ assets NNS based VVN on IN the DT legislative JJ history NN of IN the DT PFIC JJ provisions NNS . SENT If IN the DT Company NN were VBD to TO be VB classified VVN as IN a DT PFIC NP , , the DT consequences NNS to TO a DT U NP . SENT S NP . SENT Stockholder NN will MD depend VV in IN part NN on IN whether IN the DT U NP . SENT S NP . SENT Stockholder NN has VHZ made VVN a DT Mark NP to TO Market NP Election NP or CC a DT QEF NP Election NN with IN respect NN to TO the DT Company NN . SENT If IN the DT Company NN is VBZ a DT PFIC JJ during IN a DT U NP . SENT S NP . SENT Stockholder's NP holding NN period NN and CC the DT U NP . SENT S NP . SENT Stockholder NN does VVZ not RB make VV a DT Mark NP to TO Market NP Election NP or CC a DT QEF NP Election NP , , the DT U NP . SENT S NP . SENT Stockholder NN will MD generally RB be VB required VVN to TO pay VV a DT special JJ United NP States NPS tax NN , , in IN lieu NN of IN the DT U NP . SENT S NP . SENT tax NN that WDT would MD otherwise RB apply VV , , if IN such JJ U NP . SENT S NP . SENT Stockholder NN a DT realizes VVZ a DT gain NN on IN disposition NN of IN common JJ shares NNS or CC b LS receives VVZ an DT excess JJ distribution NN from IN the DT Company NN on IN common JJ shares NNS . SENT If IN a DT U NP . SENT S NP . SENT Stockholder NN makes VVZ a DT Mark NP to TO Market NP Election NP , , the DT U NP . SENT S NP . SENT Stockholder NN would MD not RB be VB subject JJ to TO the DT special JJ tax NN . SENT Instead RB , , it PP would MD be VB required VVN to TO include VV in IN its PP$ income NN the DT excess NN of IN the DT fair JJ market NN value NN of IN the DT common JJ shares NNS as IN of IN the DT close NN of IN each DT taxable JJ year NN over IN the DT U NP . SENT S NP . SENT Stockholder's NP adjusted JJ basis NN therein RB . SENT If IN the DT U NP . SENT S NP . SENT Stockholder's NP adjusted JJ basis NN in IN the DT common JJ shares NNS is VBZ greater JJR than IN the DT fair JJ market NN value NN of IN the DT common JJ 67 CD shares NNS as RB of IN the DT close NN of IN the DT taxable JJ year NN , , the DT U NP . SENT S NP . SENT Stockholder NN may MD deduct VV such JJ excess NN , , but CC only RB up RB to TO the DT aggregate JJ amount NN of IN ordinary JJ income NN previously RB included VVD as IN a DT result NN of IN the DT Mark NP to TO Market NP Election NP , , reduced VVN by IN any DT previous JJ deduction NN taken VVN . SENT The DT U NP . SENT S NP . SENT Stockholder's NP adjusted JJ basis NN in IN its PP$ common JJ shares NNS will MD be VB increased VVN by IN the DT amount NN of IN income NN or CC reduced VVN by IN the DT amount NN of IN deductions NNS resulting VVG from IN the DT Mark NP to TO Market NP Election NP . SENT If IN a DT U NP . SENT S NP . SENT Stockholder NN makes VVZ a DT QEF NP Election NP , , the DT U NP . SENT S NP . SENT Stockholder NN would MD not RB be VB subject JJ to TO the DT special JJ tax NN . SENT Instead RB , , it PP would MD be VB currently RB taxable JJ on IN its PP$ pro JJ rata NN share NN of IN our PP$ ordinary JJ earnings NNS and CC net JJ capital NN gain NN at IN ordinary JJ income NN and CC capital NN gains NNS rates NNS , , respectively RB for IN each DT taxable JJ year NN that IN the DT Company NN is VBZ classified VVN as IN a DT PFIC JJ , , even RB if IN no DT dividend NN distributions NNS were VBD received VVN . SENT If IN for IN any DT year NN the DT Company NN determines VVZ that IN it PP is VBZ properly RB classified VVN as IN a DT PFIC JJ , , it PP will MD comply VV with IN all DT reporting VVG requirements NNS necessary JJ for IN a DT U NP . SENT S NP . SENT Stockholder NN to TO make VV a DT QEF NP Election NP and CC will MD , , promptly RB following VVG the DT end NN of IN such JJ year NN and CC each DT year NN thereafter RB for IN which WDT the DT Company NN is VBZ properly RB classified VVN as IN a DT PFIC JJ , , provide VV to TO U NP . SENT S NP . SENT Stockholders NNS the DT information NN required VVN by IN the DT QEF NP Election NP . SENT Under IN current JJ U NP . SENT S NP . SENT law NN , , if IN the DT Company NN is VBZ a DT PFIC JJ in IN any DT year NN , , a DT U NP . SENT S NP . SENT Stockholder NN must MD file VV an DT annual JJ return NN on IN IRS NP Form NP 8621 CD , , which WDT describes VVZ the DT income NN received VVN or CC deemed VVN to TO be VB received VVN pursuant JJ to TO a DT QEF NP Election NP from IN the DT Comapny NP , , any DT gain NN realized VVN on IN a DT disposition NN of IN common JJ shares NNS and CC certain JJ other JJ information NN . SENT United NP States NPS Information NP Reporting NP and CC Backup JJ Withholding VVG Dividend NN payments NNS on IN common JJ shares NNS and CC proceeds NNS from IN the DT sale NN , , exchange NN or CC redemption NN of IN the DT common JJ shares NNS may MD be VB subject JJ to TO information NN reporting VVG to TO the DT Internal NP Revenue NP Services NPS IRS NP and CC possible JJ U NP . SENT S NP . SENT backup JJ withholding NN at IN a DT 28 CD rate NN . SENT Backup JJ withholding NN will MD not RB apply VV , , however RB , , to TO a DT holder NN who WP furnishes VVZ a DT correct JJ taxpayer NN identification NN number NN or CC certificate NN of IN foreign JJ status NN and CC makes VVZ any DT other JJ required JJ certification NN or CC who WP is VBZ otherwise RB exempt JJ from IN backup JJ withholding NN . SENT Persons NNS required VVN to TO establish VV their PP$ exempt JJ status NN generally RB must MD provide VV such JJ certification NN on IN IRS NP Form NP W NP 9 CD Request NN for IN Taxpayer NN Identification NN Number NP and CC Certification NN in IN the DT case NN of IN U NP . SENT S NP . SENT persons NNS and CC on IN IRS NP Form NP W NP 8 CD BEN NN Certificate NN of IN Foreign JJ Status NN in IN the DT case NN of IN non JJ U NP . SENT S NP . SENT persons NNS . SENT Amounts NNS withheld VVN as IN backup JJ withholding NN may MD be VB credited VVN against IN a DT holder's NP U NP . SENT S NP . SENT federal JJ income NN tax NN liability NN , , and CC a DT holder NN may MD obtain VV a DT refund NN of IN any DT excess JJ amounts NNS withheld VVN under IN the DT backup JJ withholding NN rules NNS by IN filing VVG the DT appropriate JJ claim NN for IN refund NN with IN the DT IRS NP and CC furnishing VVG any DT required JJ information NN . SENT U NP . SENT S NP . SENT Stockholders NNS should MD consult VV their PP$ tax NN advisors NNS regarding VVG the DT application NN of IN the DT information NN reporting NN and CC backup JJ withholding NN rules NNS . SENT Documents NNS on IN Display NN The DT Company's NP Notice NP of IN Annual NP Meeting VVG of IN Shareholders NP and CC Management NP Information NP Circular JJ dated VVN March NP 21 CD , , 2005 CD , , which WDT is VBZ an DT exhibit NN to TO this DT Form NN 20 CD F NN , , and CC the DT Company's NP Management NP Discussion NN and CC Analysis NN prepared VVN for IN Canadian JJ statutory JJ reporting NN purposes NNS are VBP available JJ at IN the DT Company's NP executive NN and CC registered JJ office NN . SENT The DT Company's NP filings NNS with IN the DT SEC NP , , including VVG exhibits NNS and CC schedules NNS filed VVN with IN this DT Annual NP Report NP , , may MD be VB reviewed VVN at IN the DT SEC's NP public JJ reference NN facilities NNS in IN Room NP 1024 CD , , Judiciary NP Plaza NP , , 450 CD Fifth NP Street NP , , N NP . SENT W NN . SENT , , Washington NP , , D NP . SENT C SYM . SENT 20549 CD . SENT Copies NNS of IN such JJ materials NNS may MD be VB obtained VVN from IN the DT Public NP Reference NN Section NN of IN the DT SEC NP , , Room NP 1024 CD , , Judiciary NP Plaza NP , , 450 CD Fifth NP Street NP , , N NP . SENT W NN . SENT , , Washington NP , , D NP . SENT C SYM . SENT 20549 CD , , at IN prescribed VVN rates NNS . SENT Further JJR information NN on IN the DT public JJ reference NN rooms NNS may MD be VB obtained VVN by IN calling VVG the DT SEC NP at IN 1 CD 800 CD SEC NP 0330 CD . SENT The DT SEC NP maintains VVZ a DT web NN site NN http NN . SENT www JJ . SENT sec NN . SENT gov NN that WDT contains VVZ reports NNS , , proxy NN and CC information NN statements NNS and CC other JJ information NN regarding VVG registrants NNS that WDT file VVP electronically RB with IN the DT SEC NP . SENT Agnico NP Eagle NP began VVD to TO file VV electronically RB with IN the DT SEC NP in IN August NP 2002 CD . SENT Any DT reports NNS , , statements NNS or CC other JJ information NN that IN the DT Company NN files VVZ with IN the DT SEC NP may MD be VB read VVN at IN the DT addresses NNS indicated VVD above IN and CC some DT of IN them PP may MD also RB be VB accessed VVN electronically RB at IN the DT web NN site NN set VVD forth RB above RB . SENT These DT SEC NP filings NNS are VBP also RB available JJ to TO the DT public NN from IN commercial JJ document NN retrieval NN services NNS . SENT 68 CD The DT Company NN also RB files VVZ reports NNS , , statements NNS and CC other JJ information NN with IN the DT Canadian JJ Securities NPS Administrators NPS and CC these DT can MD be VB accessed VVN electronically RB at IN the DT Canadian JJ Securities NPS Administrators NPS System NP for IN Electronic NP Document NN Analysis NP and CC Retrieval NP web NN site NN at IN http NN . SENT www JJ . SENT sedar NP . SENT com NN . SENT ITEM NN 11 CD . SENT QUANTITATIVE JJ AND CC QUALITATIVE JJ DISCLOSURES NNS ABOUT IN MARKET NN RISK NN Metal NP Price NP and CC Foreign NP Currency NP Agnico NP Eagle's NP net JJ income NN is VBZ most RBS sensitive JJ to TO metal NN prices NNS and CC the DT C NP US NP exchange NN rate NN . SENT For IN the DT purpose NN of IN the DT sensitivities NNS presented VVN in IN the DT graph NN below RB , , Agnico NP Eagle NP used VVD the DT following VVG metal NN price NN and CC exchange NN rate NN assumptions NNS . SENT Gold NP 375 CD . SENT Silver NP 6 CD . SENT 00 CD . SENT Zinc NN 0 CD . SENT 45 CD . SENT Copper NN 1 CD . SENT 15 CD . SENT and CC C NP US NP 1 CD . SENT 27 CD . SENT Changes NNS in IN the DT market NN prices NNS of IN gold NN are VBP due JJ to TO numerous JJ factors NNS such JJ as IN demand NN , , global JJ mine NN production NN levels NNS , , forward RB selling VVG by IN producers NNS , , central JJ bank NN sales NNS and CC investor NN sentiment NN . SENT Changes NNS in IN the DT market NN prices NNS of IN other JJ metals NNS are VBP due JJ to TO factors NNS such JJ as IN demand NN and CC global JJ mine JJ production NN levels NNS . SENT Changes NNS in IN the DT C NP US NP exchange NN rate NN are VBP due JJ to TO factors NNS such JJ as IN supply NN and CC demand NN for IN Canadian NP and CC U NP . SENT S NP . SENT currencies NNS and CC economic JJ conditions NNS in IN each DT country NN . SENT In IN 2004 CD , , the DT price NN ranges VVZ for IN metal NN prices NNS and CC the DT C NP US NP exchange NN rate NN were VBD . SENT Gold NN 375 CD 454 CD . SENT Silver NP 5 CD . SENT 56 CD 8 CD . SENT 23 CD . SENT Zinc NN 6 CD . SENT 43 CD 6 CD . SENT 57 CD . SENT Copper NN 1 CD . SENT 07 CD 1 CD . SENT 50 CD . SENT and CC C NP US NP 1 CD . SENT 175 CD 1 CD . SENT 3970 CD . SENT The DT following VVG table NN shows VVZ the DT estimated JJ impact NN on IN budgeted VVN income NN per IN share NN EPS NP in IN 2005 CD of IN a DT 10 CD change NN in IN assumed VVN metal NN prices NNS and CC exchange NN rates NNS . SENT A DT 10 CD change NN in IN each DT variable NN was VBD considered VVN in IN isolation NN while IN holding VVG all DT other JJ assumptions NNS constant JJ . SENT Based VVN on IN historical JJ market NN data NNS and CC 2004 CD price NN ranges NNS shown VVN above IN , , a DT 10 CD change NN in IN assumed VVN metal NN prices NNS and CC exchange NN rates NNS is VBZ reasonably RB likely JJ in IN 2005 CD . SENT Change NN in IN variable JJ Impact NN on IN EPS NP C NP US NP 0 CD . SENT 11 CD Gold NP 0 CD . SENT 10 CD Zinc NN 0 CD . SENT 05 CD Silver NN 0 CD . SENT 03 CD Copper NN 0 CD . SENT 02 CD In IN order NN to TO mitigate VV the DT impact NN of IN fluctuating VVG precious JJ and CC base JJ metal NN prices NNS , , Agnico NP Eagle NP enters VVZ into IN hedging VVG transactions NNS under IN its PP$ Metal NP Price NP Risk NP Management NP Policy NP , , approved VVN by IN the DT Board NP of IN Directors NPS . SENT The DT Company's NP policy NN and CC practice NN is VBZ not RB to TO sell VV forward RB its PP$ gold NN production NN . SENT The DT Policy NN does VVZ allow VV the DT Company NN to TO review VV this DT to TO use VV hedging VVG strategies NNS where WRB appropriate JJ to TO ensure VV an DT adequate JJ return NN on IN new JJ projects NNS . SENT In IN the DT past NN , , Agnico NP Eagle NP has VHZ bought VVN put VV options NNS to TO protect VV a DT minimum JJ gold NN price NN while IN maintaining VVG full JJ participation NN to TO gold JJ price NN increases NNS . SENT The DT Company's NP policy NN does VVZ not RB allow VV speculative JJ trading NN . SENT At IN the DT end NN of IN 2004 CD , , the DT Company's NP only JJ metal NN hedges NNS were VBD gold JJ puts NNS with IN a DT strike NN price NN of IN 260 CD . SENT These DT gold NN puts NNS were VBD liquidated VVN in IN the DT first JJ two CD months NNS of IN 2005 CD . SENT 69 CD The DT Company NN receives VVZ payment NN for IN all DT of IN its PP$ metal NN sales NNS in IN US NP dollars NNS and CC pays VVZ most JJS of IN its PP$ operating NN and CC capital NN costs NNS in IN Canadian JJ dollars NNS . SENT This DT gives VVZ rise NN to TO significant JJ currency NN risk NN exposure NN . SENT The DT Company NN has VHZ entered VVN into IN currency NN hedging VVG transactions NNS under IN the DT Company's NP Foreign NP Exchange NP Risk NP Management NP Policy NP , , approved VVN by IN the DT Board NP of IN Directors NPS , , to TO hedge VV part NN of IN the DT foreign JJ currency NN exposure NN . SENT The DT policy NN does VVZ not RB permit VV the DT hedging NN of IN translation NN exposure NN that WDT is VBZ , , the DT gains NNS and CC losses NNS that WDT arise VVP from IN the DT accounting NN translation NN of IN Canadian JJ dollar NN assets NNS and CC liabilities NNS into IN US NP dollars NNS as IN these DT do VVP not RB give VV rise NN to TO cash NN exposure NN . SENT In IN 2004 CD , , the DT Company NN hedged VVD approximately RB 40 CD of IN its PP$ Canadian JJ dollar NN operating VVG cost NN requirement NN at IN a DT level NN well RB above IN the DT prevailing VVG exchange NN rates NNS that WDT were VBD in IN effect NN when WRB the DT hedges NNS expired VVD . SENT As IN shown VVN in IN the DT chart NN above RB , , a DT 10 CD increase NN in IN budget NN exchange NN rates NNS would MD increase VV EPS NP by IN 0 CD . SENT 11 CD . SENT Interest NN Rate NN Fluctuations NNS in IN interest NN rates NNS can MD also RB affect VV income NN and CC cash NN flows NNS . SENT Due JJ to TO the DT interest NN rate NN swap NN entered VVD into IN in IN 2003 CD , , increases NNS in IN LIBOR NP rates NNS will MD increase VV interest NN expense NN . SENT The DT maximum JJ interest NN rate NN payable JJ under IN the DT swap NN transaction NN is VBZ 5 CD . SENT 75 CD thus RB , , based VVN on IN this DT maximum JJ rate NN , , the DT maximum JJ exposure NN from IN rising VVG interest NN rates NNS is VBZ 0 CD . SENT 02 CD per IN share NN . SENT The DT Company NN has VHZ a DT Short JJ Term NP Investment NP Risk NP Management NP Policy NP , , approved VVN by IN the DT Board NP of IN Directors NPS , , which WDT only RB permits VVZ investment NN of IN excess JJ cash NN balances NNS in IN short JJ term NN money NN market NN instruments NNS of IN the DT highest JJS credit NN quality NN . SENT In IN 2004 CD , , the DT three CD month NN LIBOR NP rate NN was VBD between IN 1 CD . SENT 11 CD and CC 2 CD . SENT 56 CD . SENT Based VVN on IN historical JJ market NN data NNS and CC the DT 2004 CD LIBOR NP range NN , , a DT 10 CD change NN in IN interest NN rates NNS is VBZ reasonably RB likely JJ in IN 2005 CD . SENT Derivatives NNS The DT Company NN enters VVZ into IN derivative JJ contracts NNS to TO limit VV the DT downside NN risk NN associated VVN with IN fluctuating VVG metal NN prices NNS . SENT The DT contracts NNS act VVP as IN economic JJ hedges NNS of IN underlying VVG exposures NNS to TO metal NN price NN risk NN and CC foreign JJ currency NN exchange NN risk NN and CC are VBP not RB held VVN for IN speculative JJ purposes NNS . SENT Agnico NP Eagle NP does VVZ not RB use VV complex JJ derivative JJ contracts NNS to TO hedge VV exposures NNS . SENT The DT Company NN uses VVZ simple JJ contracts NNS , , such JJ as IN puts NNS and CC calls NNS , , to TO mitigate VV downside NN risk NN yet CC maintain VV full JJ participation NN to TO rising VVG metal NN prices NNS . SENT Agnico NP Eagle NP also RB enters VVZ into IN forward JJ contracts NNS to TO lock VV in IN exchange NN rates NNS based VVN on IN projected JJ Canadian JJ dollar NN operating NN and CC capital NN needs NNS . SENT Using VVG derivative JJ instruments NNS creates VVZ various JJ financial JJ risks NNS . SENT Credit NN risk NN is VBZ the DT risk NN that IN the DT counterparties NNS to TO derivative JJ contracts NNS will MD fail VV to TO perform VV on IN an DT obligation NN to TO the DT Company NN . SENT Credit NN risk NN is VBZ mitigated VVN by IN dealing VVG with IN high JJ quality NN counterparties NNS such JJ as IN financial JJ institutions NNS . SENT Market NN liquidity NN risk NN is VBZ the DT risk NN that IN a DT derivative JJ position NN cannot NN be VB liquidated VVN quickly RB . SENT The DT Company NN mitigates VVZ market NN liquidity NN risk NN by IN spreading VVG out RP the DT maturity NN of IN derivative JJ contracts NNS over IN time NN , , usually RB based VVN on IN projected VVN production NN levels NNS for IN the DT specific JJ metal NN being VBG hedged VVN , , such JJ that IN the DT relevant JJ markets NNS will MD be VB able JJ to TO absorb VV the DT contracts NNS . SENT Mark NN to TO market NN risk NN is VBZ the DT risk NN that IN an DT adverse JJ change NN in IN market NN prices NNS for IN metals NNS will MD affect VV financial JJ condition NN . SENT Since IN derivative JJ contracts NNS are VBP used VVN as IN economic JJ hedges NNS , , for IN most JJS of IN the DT contracts NNS , , changes NNS in IN the DT mark NN to TO market NN value NN do VVP no RB affect VV income NN . SENT For IN a DT description NN of IN the DT accounting NN treatment NN of IN derivative JJ contracts NNS , , please VV see VV Critical JJ Accounting NP Estimates NNS Financial NP Instruments NPS . SENT For IN 2004 CD , , Agnico NP Eagle NP recorded VVD a DT 1 CD . SENT 5 CD million CD charge NN against IN total JJ revenue NN to TO reflect VV the DT maturity NN of IN gold JJ put VVN option NN contracts NNS purchased VVN in IN 1999 CD . SENT This DT amount NN is VBZ simply RB the DT original JJ cost NN for IN gold JJ puts NNS maturing VVG in IN the DT year NN . SENT Mark NN to TO market NN losses NNS on IN the DT 2004 CD gold NN put VVD option NN contracts NNS had VHD originally RB been VBN recorded VVN as IN part NN of IN accumulated VVN other JJ comprehensive JJ income NN and CC these DT amounts NNS were VBD reclassified VVD to TO earnings NNS for IN the DT current JJ year NN and CC are VBP included VVN as IN part NN of IN the DT 1 CD . SENT 5 CD million CD charge NN . SENT Also RB for IN 2004 CD , , Agnico NP Eagle NP recorded VVD a DT 4 CD . SENT 7 CD million CD charge NN on IN foreign JJ currency NN derivative JJ contracts NNS maturing VVG in IN 2004 CD which WDT was VBD recorded VVN as IN part NN of IN production NN costs NNS . SENT Since IN the DT Company NN uses VVZ only RB over IN the DT counter JJ instruments NNS , , the DT fair JJ value NN of IN individual JJ hedging NN instruments NNS is VBZ based VVN on IN readily RB available JJ market NN values NNS . SENT ITEM NN 12 CD . SENT DESCRIPTION NN OF IN SECURITIES NNS OTHER JJ THAN IN EQUITY NN SECURITIES NNS Pursuant JJ to TO the DT instructions NNS to TO Item NN 12 CD of IN Form NP 20 CD F NN , , this DT information NN is VBZ inapplicable JJ and CC has VHZ not RB been VBN provided VVN . SENT 70 CD ITEM NN 13 CD . SENT DEFAULTS NNS , , DIVIDEND NN ARREARAGES NNS AND CC DELINQUENCIES NNS None NN not RB applicable JJ . SENT ITEM NN 14 CD . SENT MATERIAL NN MODIFICATIONS NNS TO TO THE DT RIGHTS NNS OF IN SECURITY NN HOLDERS NNS AND CC USE NN OF IN PROCEEDS NNS None NN not RB applicable JJ . SENT ITEM NN 15 CD . SENT CONTROLS NNS AND CC PROCEDURES NNS a DT Disclosure NN Controls NP and CC Procedures NNS . SENT Based VVN on IN their PP$ evaluation NN of IN the DT Company's NP disclosure NN controls NNS and CC procedures NNS as IN of IN the DT end NN of IN the DT period NN covered VVN by IN this DT Annual NP Report NP , , and CC pursuant JJ to TO Rule NP 13 CD a DT 15 CD or CC Rule NP 15 CD d SYM 15 CD of IN the DT Securities NPS Exchange NP Act NP of IN 1934 CD , , Sean NP Boyd NP , , President NP and CC Chief NP Executive NP Officer NP , , and CC David NP Garofalo NP , , Vice NP President NP , , Finance NP and CC Chief NP Financial NP Officer NP , , have VHP concluded VVN that IN the DT Company's NP disclosure NN controls NNS and CC procedures NNS as RB defined VVN in IN Rule NP 13 CD a DT 15 CD e NN or CC Rule NP 15 CD d SYM 15 CD e NN are VBP designed VVN to TO ensure VV that DT information NN required VVN to TO be VB disclosed VVN by IN the DT Company NN in IN the DT reports NNS that IN it PP files VVZ under IN the DT Securities NPS Exchange NP Act NP of IN 1934 CD is VBZ recorded VVN , , processed VVN , , summarized VVD and CC reported VVD within IN the DT time NN periods NNS specified VVN in IN the DT SEC's NP rules NNS and CC forms NNS and CC are VBP operating VVG in IN an DT effective JJ manner NN . SENT b SYM Management's NP Annual NP Report NP on IN Internal NP Control NP Over IN Financial NP Reporting NP . SENT Not RB applicable JJ . SENT c SYM Attestation NN Report NN of IN the DT Registered JJ Public NP Accounting NP Firm NN . SENT Not RB applicable JJ . SENT d SYM Changes NP in IN Internal NP Control NP Over IN Financial NP Reporting NP . SENT During IN the DT period NN covered VVN by IN this DT Annual JJ Report NN , , there EX have VHP been VBN no DT changes NNS identified VVN , , in IN connection NN with IN the DT evaluation NN required VVN by IN Rule NP 13 CD a DT 15 CD d NN or CC Rule NP 15 CD d SYM 15 CD d NN , , in IN the DT Company's NP internal JJ control NN over IN financial JJ reporting NN as IN defined VVN in IN Rule NP 13 CD a DT 15 CD f SYM or CC Rule NP 15 CD d SYM 15 CD f NN that WDT have VHP materially RB affected VVN , , or CC are VBP reasonably RB likely JJ to TO materially RB affect VV , , the DT Company's NP internal JJ control NN over IN financial JJ reporting NN . SENT ITEM NN 16 CD A DT AUDIT NN COMMITTEE NN FINANCIAL NP EXPERT NN The DT Company's NP Board NP of IN Directors NPS has VHZ determined VVN that IN the DT Company NN shall MD have VH at IN least JJS one CD audit NN committee NN financial JJ expert NN as IN defined VVN in IN Item NN 16 CD A NP of IN Form NP 20 CD F NN and CC that DT Messrs NPS . SENT Bernie NP Kraft NP and CC Mel NP Leiderman NP are VBP the DT Company's NP audit NN committee NN financial JJ experts NNS serving VVG on IN the DT Audit NP Committee NP of IN the DT Board NP of IN Directors NPS . SENT ITEM NN 16 CD B NN CODE NN OF IN ETHICS NNS The DT Company NN has VHZ adopted VVN a DT code NN of IN ethics NNS as IN defined VVN in IN Item NN 16 CD B NN of IN Form NP 20 CD F NN that WDT applies VVZ to TO its PP$ Chief NP Executive NP Officer NP , , Chief NP Financial NP Officer NP , , principal JJ accounting NN officer NN , , controller NN and CC persons NNS performing VVG similar JJ functions NNS . SENT A DT copy NN of IN this DT code NN of IN ethics NNS was VBD filed VVN as IN Exhibit NN 99 CD E NN to TO the DT Annual NP Report NP on IN Form NP 20 CD F NN filed VVN on IN May NP 18 CD , , 2004 CD and CC is VBZ incorporated VVN by IN reference NN hereto RB . SENT ITEM NN 16 CD C NP PRINCIPAL JJ ACCOUNTANT NN FEES NNS AND CC SERVICES NNS The DT Audit NP Committee NP establishes VVZ the DT independent JJ auditors NNS compensation NN . SENT In IN 2003 CD , , the DT Audit NP Committee NP also RB established VVD a DT policy NN to TO pre NP approve VV all DT services NNS provided VVD the DT Company's NP independent JJ public JJ accountant NN , , Ernst NP Young NP LLP NP . SENT The DT Audit NP Committee NP determines VVZ which WDT non JJ audit NN services NNS the DT independent JJ auditors NNS are VBP prohibited VVN from IN providing VVG and CC authorizes VVZ permitted VVN non JJ audit NN services NNS to TO be VB performed VVN by IN the DT independent JJ auditors NNS to TO the DT extent NN those DT services NNS are VBP permitted VVN by IN the DT Sarbanes NP Oxley NP Act NP and CC other JJ applicable JJ legislation NN . SENT A DT summary NN of IN all DT fees NNS paid VVN to TO Ernst NP Young NP LLP NP for IN the DT fiscal JJ years NNS ended VVN December NP 31 CD , , 2004 CD and CC 2003 CD can MD be VB found VVN on IN under IN Appointment NN of IN Auditors NNS on IN pages NNS 6 CD to TO 7 CD of IN Exhibit NN 15 CD . SENT 01 CD to TO this DT Form NN 20 CD F NN . SENT All DT fees NNS paid VVN to TO Ernst NP Young NP LLP NP in IN 2004 CD were VBD pre NP approved VVN by IN the DT Audit NP Committee NP . SENT Ernst NP Young NP LLP NP has VHZ served VVN as IN the DT Company's NP independent JJ public JJ accountant NN for IN each DT of IN the DT fiscal JJ years NNS in IN the DT three CD year NN period NN ended VVN December NP 31 CD , , 2004 CD for IN which WDT audited VVD financial JJ statements NNS appear VVP in IN this DT Annual NP Report NP on IN Form NP 20 CD F NN . SENT 71 CD ITEM NN 16 CD D NP EXEMPTIONS NNS FROM IN THE DT LISTING NN STANDARDS NNS FOR IN AUDIT NN COMMITTEES NNS Not RB applicable JJ . SENT ITEM NN 16 CD E NN PURCHASES NNS OF IN EQUITY NN SECURITIES NNS BY IN THE DT ISSUER NN AND CC AFFILIATED JJ PURCHASERS NNS Not RB applicable JJ . SENT ITEM NN 17 CD . SENT RESERVED JJ ITEM NN 18 CD . SENT FINANCIAL JJ STATEMENTS NNS Pursuant JJ to TO General NP Instruction NN E NN c SYM of IN Form NP 20 CD F NN , , the DT registrant NN has VHZ elected VVN to TO provide VV the DT financial JJ statements NNS and CC related JJ information NN specified VVN in IN Item NN 18 CD . SENT 72 CD REPORT NN OF IN INDEPENDENT JJ REGISTERED JJ PUBLIC JJ ACCOUNTING NN FIRM NN To TO the DT Board NP of IN Directors NPS and CC Shareholders NNS of IN Agnico NP Eagle NP Mines NPS Limited NP . SENT We PP have VHP audited VVN the DT accompanying JJ consolidated JJ balance NN sheets NNS of IN Agnico NP Eagle NP Mines NPS Limited NP as IN of IN December NP 31 CD , , 2004 CD and CC 2003 CD , , and CC the DT related JJ consolidated JJ statements NNS of IN income NN loss NN and CC comprehensive JJ income NN loss NN , , shareholders NNS equity NN , , and CC cash NN flows NNS for IN each DT of IN the DT three CD years NNS in IN the DT period NN ended VVN December NP 31 CD , , 2004 CD . SENT These DT financial JJ statements NNS are VBP the DT responsibility NN of IN the DT Company's NP management NN . SENT Our PP$ responsibility NN is VBZ to TO express VV an DT opinion NN on IN these DT financial JJ statements NNS based VVN on IN our PP$ audits NN . SENT We PP conducted VVD our PP$ audits NN in IN accordance NN with IN the DT standards NNS of IN the DT Public NP Company NP Accounting NP Oversight NP Board NP United NP States NPS . SENT Those DT standards NNS require VVP that IN we PP plan VVP and CC perform VVP the DT audit NN to TO obtain VV reasonable JJ assurance NN about IN whether IN the DT financial JJ statements NNS are VBP free JJ of IN material NN misstatement NN . SENT We PP were VBD not RB engaged VVN to TO perform VV an DT audit NN of IN the DT Company's NP internal JJ control NN over IN financial JJ reporting NN . SENT Our PP$ audits NN included VVD consideration NN of IN internal JJ control NN over IN financial JJ reporting NN as IN a DT basis NN for IN designing VVG audit NN procedures NNS that WDT are VBP appropriate JJ in IN the DT circumstances NNS , , but CC not RB for IN the DT purpose NN of IN expressing VVG an DT opinion NN on IN the DT effectiveness NN of IN the DT Company's NP internal JJ control NN over IN financial JJ reporting NN . SENT Accordingly RB , , we PP express VVP no DT such JJ opinion NN . SENT An DT audit NN also RB includes VVZ examining VVG , , on IN a DT test NN basis NN , , evidence NN supporting VVG the DT amounts NNS and CC disclosures NNS in IN the DT financial JJ statements NNS , , assessing VVG the DT accounting NN principles NNS used VVN and CC significant JJ estimates NNS made VVN by IN management NN , , and CC evaluating VVG the DT overall JJ financial JJ statement NN presentation NN . SENT We PP believe VVP that IN our PP$ audits NN provide VV a DT reasonable JJ basis NN for IN our PP$ opinion NN . SENT In IN our PP$ opinion NN , , the DT financial JJ statements NNS referred VVD to TO above RB present VV fairly RB , , in IN all DT material NN respects VVZ , , the DT consolidated JJ financial JJ position NN of IN Agnico NP Eagle NP Mines NPS Limited NP at IN December NP 31 CD , , 2004 CD and CC 2003 CD , , and CC the DT consolidated JJ results NNS of IN its PP$ operations NNS and CC its PP$ cash NN flows VVZ for IN each DT of IN the DT three CD years NNS in IN the DT period NN ended VVN December NP 31 CD , , 2004 CD in IN conformity NN with IN accounting NN principles NNS generally RB accepted VVD in IN the DT United NP States NPS . SENT As IN described VVN in IN the DT Summary NN of IN Significant JJ Accounting NP Policies NNS Reclamation NN costs NNS and CC Stock NN based VVN compensation NN , , the DT Company NN changed VVD its PP$ method NN of IN i NP accounting NN for IN reclamation NN costs NNS effective JJ January NP 1 CD , , 2003 CD . SENT and CC ii NN accounting NN for IN stock NN based VVN compensation NN effective JJ January NP 1 CD , , 2003 CD . SENT We PP also RB reported VVD separately RB on IN February NP 22 CD , , 2005 CD to TO the DT shareholders NNS of IN Agnico NP Eagle NP Mines NPS Limited NP , , on IN our PP$ audit NN , , conducted VVN in IN accordance NN with IN Canadian NP generally RB accepted VVD auditing VVG standards NNS , , where WRB we PP expressed VVD an DT opinion NN without IN reservation NN on IN the DT December NP 31 CD , , 2004 CD and CC 2003 CD consolidated JJ financial JJ statements NNS , , prepared VVN in IN accordance NN with IN Canadian NP generally RB accepted VVD accounting NN principles NNS . SENT Ernst NP Young NP LLP NP Chartered VVD Accountants NNS Toronto NP , , Canada NP February NP 22 CD , , 2005 CD 73 CD Summary NN Of IN Significant JJ Accounting NP Policies NNS These DT consolidated JJ financial JJ statements NNS of IN Agnico NP Eagle NP Mines NPS Limited NP Agnico NP Eagle NP or CC the DT Company NN are VBP expressed VVN in IN thousands NNS of IN United NP States NP dollars NNS US NP dollars NNS , , except IN where WRB noted VVN , , and CC have VHP been VBN prepared VVN in IN accordance NN with IN United NP States NPS generally RB accepted VVN accounting NN principles NNS US NP GAAP NP . SENT We PP have VHP also RB prepared VVN consolidated JJ financial JJ statements NNS in IN accordance NN with IN Canadian NP generally RB accepted VVD accounting NN principles NNS . SENT Since IN a DT precise JJ determination NN of IN assets NNS and CC liabilities NNS depends VVZ on IN future JJ events NNS , , the DT presentation NN of IN consolidated JJ financial JJ statements NNS for IN a DT period NN necessarily RB involves VVZ the DT use NN of IN estimates NNS and CC approximations NNS . SENT Actual JJ results NNS may MD differ VV from IN such JJ estimates NNS and CC approximations NNS . SENT The DT consolidated JJ financial JJ statements NNS have VHP , , in IN management's NN opinion NN , , been VBN prepared VVN within IN reasonable JJ limits NNS of IN materiality NN and CC within IN the DT framework NN of IN the DT significant JJ accounting NN policies NNS referred VVD to TO below RB . SENT Basis NN of IN consolidation NN These DT consolidated JJ financial JJ statements NNS include VVP the DT accounts NNS of IN the DT Company NN and CC its PP$ wholly RB owned VVN subsidiaries NNS and CC entities NNS in IN which WDT it PP has VHZ a DT controlling JJ financial JJ interest NN after IN the DT elimination NN of IN intercompany NN accounts NNS and CC transactions NNS . SENT The DT Company NN has VHZ a DT controlling JJ financial JJ interest NN if IN it PP owns VVZ a DT majority NN of IN the DT outstanding JJ voting NN common JJ stock NN or CC has VHZ significant JJ control NN over IN an DT entity NN through IN contractual JJ or CC economic JJ interests NNS in IN which WDT the DT Company NN is VBZ the DT primary JJ beneficiary NN . SENT Agnico NP Eagle NP recognizes VVZ gains NNS and CC losses NNS on IN the DT effective JJ disposition NN of IN interests NNS in IN associated VVN companies NNS arising VVG when WRB such JJ associated JJ companies NNS issue NN treasury NN shares NNS to TO third JJ parties NNS . SENT Gains NNS are VBP recognized VVN in IN income NN only RB if IN there EX is VBZ reasonable JJ assurance NN of IN realization NN . SENT otherwise RB , , they PP are VBP recorded VVN within IN accumulated VVN other JJ comprehensive JJ loss NN . SENT Cash NN and CC cash NN equivalents NNS Cash NN and CC cash NN equivalents NNS include VVP cash NN on IN hand NN and CC short JJ term NN investments NNS in IN money NN market NN instruments NNS with IN original JJ maturities NNS of IN three CD months NNS or CC less JJR at IN the DT date NN of IN purchase NN . SENT Short JJ term NN investments NNS are VBP carried VVN at IN cost NN , , which WDT approximates VVZ market NN value NN . SENT Inventories NNS Inventories NNS consist VVP of IN ore NN stockpiles NNS , , concentrates VVZ and CC supplies VVZ . SENT Stockpiles NNS Stockpiles NNS consist VVP of IN coarse JJ ore NN that WDT has VHZ been VBN mined VVN and CC hoisted VVN from IN underground JJ and CC is VBZ available JJ for IN further JJR processing NN and CC in IN stope NN ore NN inventory NN in IN the DT form NN of IN drilled VVN and CC blasted VVD stopes NNS ready JJ to TO be VB mucked VVN and CC hoisted VVN to TO the DT surface NN . SENT The DT stockpiles NNS are VBP measured VVN by IN estimating VVG the DT number NN of IN tons NNS , , contained VVD ounces NNS based VVN on IN assays NNS and CC recovery NN percentages NNS based VVN on IN actual JJ recovery NN rates NNS achieved VVN for IN processing VVG similar JJ ore NN . SENT Specific JJ tonnages NNS are VBP verified VVN and CC compared VVN to TO original JJ estimates NNS once IN the DT stockpile NN is VBZ milled VVN . SENT The DT ore NN stockpile NN is VBZ valued VVN at IN the DT lower JJR of IN net JJ realizable JJ value NN and CC mining NN costs NNS incurred VVN up RP to TO the DT point NN of IN stockpiling NN the DT ore NN . SENT The DT net JJ realizable JJ value NN of IN stockpiled VVN ore NN is VBZ assessed VVN by IN comparing VVG the DT sum NN of IN the DT carrying VVG value NN plus CC future JJ processing NN and CC selling VVG costs NNS to TO the DT expected VVN revenue NN to TO be VB earned VVN , , which WDT is VBZ based VVN on IN the DT estimated JJ volume NN and CC grade NN of IN stockpiled VVN material NN . SENT Mining NN costs NNS include VVP all DT costs NNS associated VVN with IN underground JJ mining NN operations NNS and CC are VBP allocated VVN to TO each DT ton NN of IN stockpile NN . SENT Fully RB absorbed VVN costs NNS include VVP direct JJ and CC indirect JJ materials NNS and CC consumables NNS , , direct JJ labor NN , , utilities NNS and CC amortization NN of IN mining NN assets NNS incurred VVN up RP to TO the DT point NN of IN stockpiling NN the DT ore NN . SENT Royalty NN expenses NNS and CC production NN taxes NNS are VBP included VVN in IN production NN costs NNS , , but CC are VBP not RB capitalized VVN into IN inventory NN . SENT Stockpiles NNS are VBP not RB intended VVN to TO be VB long JJ term NN inventory NN items NNS and CC therefore RB are VBP generally RB processed VVN within IN twelve NN months NNS of IN extraction NN . SENT The DT decision NN to TO process VV stockpiled VVN ore NN is VBZ based VVN on IN a DT net JJ smelter NN return NN analysis NN . SENT The DT Company NN processes VVZ its PP$ stockpiled VVN ore NN if IN its PP$ estimated JJ revenue NN , , on IN a DT per FW ton NN basis NN and CC net NN of IN estimated JJ smelting VVG and CC refining VVG costs NNS , , is VBZ greater JJR than IN the DT related JJ mining NN and CC milling NN costs NNS . SENT The DT Company NN has VHZ never RB elected VVN to TO not RB process VV stockpiled VVN ore NN and CC does VVZ not RB anticipate VV departing VVG from IN this DT practice NN in IN the DT future NN . SENT Stockpiled VVN ore NN on IN the DT surface NN is VBZ exposed VVN to TO the DT elements NNS , , but CC the DT Company NN does VVZ not RB expect VV its PP$ condition NN to TO deteriorate VV significantly RB . SENT 74 CD Concentrates VVZ Concentrates VVZ inventories NNS consist VVP of IN concentrates VVZ for IN which WDT legal JJ title NN has VHZ not RB yet RB passed VVN to TO custom NN smelters NNS . SENT Concentrates VVZ inventories NNS are VBP measured VVN based VVN on IN assays NNS of IN the DT processed JJ concentrates VVZ and CC are VBP valued VVN based VVN on IN the DT lower JJR of IN net JJ realizable JJ value NN and CC the DT fully RB absorbed VVN mining NN and CC milling NN costs NNS associated VVN with IN extracting VVG and CC processing VVG the DT ore NN . SENT Supplies NNS Supplies NNS , , consisting VVG of IN mine NN stores NNS inventory NN , , are VBP valued VVN at IN the DT lower JJR of IN average JJ cost NN and CC replacement NN cost NN . SENT Deferred JJ financing NN costs NNS Deferred JJ financing NN costs NNS , , which WDT are VBP included VVN in IN other JJ assets NNS on IN the DT consolidated JJ balance NN sheet NN and CC relate VVP to TO the DT issuance NN of IN the DT Convertible JJ Debentures NNS and CC the DT Company's NP revolving JJ credit NN facility NN , , are VBP being VBG amortized VVN to TO income NN over IN the DT term NN of IN the DT related JJ obligations NNS . SENT If IN the DT holders NNS of IN the DT Company's NP Convertible JJ Debentures NNS exercise VVP their PP$ conversion NN option NN , , the DT common JJ shares NNS issued VVN on IN such JJ conversion NN will MD be VB recorded VVN at IN an DT amount NN equal JJ to TO the DT aggregate NN of IN the DT carrying VVG value NN of IN the DT long JJ term NN liability NN , , net JJ of IN the DT associated VVN financing NN costs NNS , , with IN no DT gain NN or CC loss NN being VBG recognized VVN in IN income NN . SENT Mining NN properties NNS , , plant NN and CC equipment NN and CC mine NN development NN costs VVZ Significant JJ payments NNS related VVN to TO the DT acquisition NN of IN land NN and CC mineral NN rights NNS are VBP capitalized VVN as IN mining NN properties NNS at IN cost NN . SENT If IN a DT mineable JJ ore NN body NN is VBZ discovered VVN , , such JJ costs NNS are VBP amortized VVN to TO income NN when WRB production NN begins VVZ , , using VVG the DT unit NN of IN production NN method NN , , based VVN on IN estimated JJ proven JJ and CC probable JJ reserves NNS . SENT If IN no DT mineable JJ ore NN body NN is VBZ discovered VVN , , such JJ costs NNS are VBP expensed VVN in IN the DT period NN in IN which WDT it PP is VBZ determined VVN the DT property NN has VHZ no DT future JJ economic JJ value NN . SENT Expenditures NNS for IN new JJ facilities NNS and CC improvements NNS that WDT can MD extend VV the DT useful JJ lives NNS of IN existing JJ facilities NNS are VBP capitalized VVN as IN plant NN and CC equipment NN at IN cost NN . SENT Interest NN costs NNS incurred VVN for IN the DT construction NN of IN projects NNS are VBP capitalized VVN . SENT Mine JJ development NN costs NNS incurred VVN after IN the DT commencement NN of IN production NN are VBP capitalized VVN or CC deferred VVN to TO the DT extent NN that IN these DT costs NNS benefit VVP the DT entire JJ ore NN body NN . SENT Costs NNS incurred VVD to TO access VV single JJ ore NN blocks NNS are VBP expensed VVN as IN incurred VVN . SENT otherwise RB , , such JJ vertical JJ and CC horizontal JJ developments NNS are VBP classified VVN as IN mine JJ development NN costs NNS . SENT Agnico NP Eagle NP records NNS depreciation NN on IN both DT plant NN and CC equipment NN and CC mine NN development NN costs NNS used VVN in IN commercial JJ production NN on IN a DT unit NN of IN production NN basis NN based VVN on IN the DT estimated JJ proven JJ and CC probable JJ ore NN reserves NNS of IN the DT mine NN . SENT The DT unit NN of IN production NN method NN defines VVZ the DT denominator NN as IN the DT total JJ proven JJ and CC probable JJ tons NNS of IN reserves NNS . SENT A DT unit NN for IN the DT purposes NNS of IN the DT unit NN of IN production NN method NN is VBZ a DT ton NN of IN ore NN . SENT A DT unit NN is VBZ considered VVN produced VVN for IN the DT purposes NNS of IN recording NN amortization NN when WRB the DT ton NN of IN ore NN has VHZ been VBN mined VVN . SENT Repairs NNS and CC maintenance NN expenditures NNS are VBP charged VVN to TO income NN as IN production NN costs NNS . SENT Assets NNS under IN construction NN are VBP not RB depreciated VVD until IN the DT end NN of IN the DT construction NN period NN . SENT Upon IN commencement NN of IN commercial JJ production NN , , the DT capitalized JJ construction NN costs NNS are VBP transferred VVN to TO the DT various JJ categories NNS of IN plant NN and CC equipment NN . SENT Mineral NN exploration NN costs NNS are VBP charged VVN to TO income NN in IN the DT year NN in IN which WDT they PP are VBP incurred VVN . SENT When WRB it PP is VBZ determined VVN that IN a DT mining NN property NN can MD be VB economically RB developed VVN as IN a DT result NN of IN established VVN proven JJ and CC probable JJ reserves NNS , , the DT costs NNS of IN further JJR exploration NN and CC development NN to TO further RBR delineate VV the DT orebody NN on IN such JJ property NN are VBP capitalized VVN . SENT The DT establishment NN of IN proven JJ and CC probable JJ reserves NNS is VBZ based VVN on IN results NNS of IN final JJ feasibility NN studies NNS , , which WDT indicate VVP whether IN a DT property NN is VBZ economically RB feasible JJ . SENT Upon IN commencement NN of IN the DT commercial JJ production NN of IN a DT development NN project NN , , these DT costs NNS are VBP transferred VVN to TO the DT appropriate JJ asset NN category NN and CC are VBP amortized VVN to TO income NN using VVG the DT unit NN of IN production NN method NN mentioned VVN above IN . SENT Mine JJ development NN costs NNS , , net JJ of IN salvage NN values NNS , , relating VVG to TO a DT property NN which WDT is VBZ abandoned VVN or CC considered VVN uneconomic JJ for IN the DT foreseeable JJ future NN , , are VBP written VVN off RP . SENT The DT carrying VVG values NNS of IN mining NN properties NNS , , plant NN and CC equipment NN and CC mine NN development NN costs NNS are VBP reviewed VVN periodically RB , , when WRB impairment NN factors NNS exist VVP , , for IN possible JJ impairment NN , , based VVN on IN the DT future JJ undiscounted JJ net JJ cash NN flows NNS of IN the DT operating VVG mine NN and CC development NN property NN . SENT If IN it PP is VBZ determined VVN that IN the DT estimated JJ net JJ recoverable JJ amount NN is VBZ less JJR than IN the DT carrying VVG value NN , , then RB a DT write VV down RP to TO the DT estimated JJ fair JJ value NN amount NN is VBZ made VVN with IN a DT charge NN to TO income NN . SENT Estimated VVN future JJ cash NN flows NNS of IN an DT operating VVG mine NN and CC development NN properties NNS include VVP 75 CD estimates NNS of IN recoverable JJ ounces NNS of IN gold NN based VVN on IN the DT proven JJ and CC probable JJ reserves NNS . SENT To TO the DT extent NN economic JJ value NN exists VVZ beyond IN the DT proven JJ and CC probable JJ reserves NNS of IN an DT operating VVG mine NN or CC development NN property NN , , this DT value NN is VBZ included VVN as IN part NN of IN the DT estimated JJ future JJ cash NN flows NNS . SENT Estimated VVN future JJ cash NN flows VVZ also RB involve VV estimates NNS regarding VVG gold JJ prices NNS considering VVG current JJ and CC historical JJ prices NNS , , price NN trends NNS and CC related JJ factors NNS , , production NN levels NNS , , capital NN and CC reclamation NN costs NNS , , and CC related JJ income NN and CC mining NN taxes NNS , , all RB based VVN on IN detailed JJ engineering NN life NN of IN mine NN plans NNS . SENT Cash NN flows NNS are VBP subject JJ to TO risks NNS and CC uncertainties NNS and CC changes NNS in IN the DT estimates NNS of IN the DT cash NN flows NNS could MD affect VV the DT recoverability NN of IN long JJ lived VVN assets NNS . SENT Financial JJ instruments NNS Agnico NP Eagle NP uses VVZ derivative JJ financial JJ instruments NNS , , primarily RB option NN contracts NNS , , to TO manage VV exposure NN to TO fluctuations NNS in IN metal NN prices NNS , , foreign JJ currency NN exchange NN rates NNS and CC interest NN rates NNS . SENT Agnico NP Eagle NP does VVZ not RB hold VV financial JJ instruments NNS or CC derivative JJ financial JJ instruments NNS for IN trading NN purposes NNS . SENT As IN a DT result NN of IN adopting VVG United NP States NPS Financial NP Accounting NP Standards NPS Board NP FASB NP Statement NN No RB . SENT 133 CD , , Accounting NN for IN Derivative JJ Instruments NNS and CC Hedging VVG Activities NNS FAS NP 133 CD on IN January NP 1 CD , , 2002 CD , , the DT Company NN recognizes VVZ all DT derivative JJ financial JJ instruments NNS in IN the DT consolidated JJ financial JJ statements NNS at IN fair JJ value NN regardless RB of IN the DT purpose NN or CC intent NN for IN holding VVG the DT instrument NN . SENT Changes NNS in IN the DT fair JJ value NN of IN derivative JJ financial JJ instruments NNS are VBP either RB recognized VVN periodically RB in IN income NN or CC in IN shareholders NNS equity NN as IN a DT component NN of IN other JJ comprehensive JJ loss NN , , depending VVG on IN the DT nature NN of IN the DT derivative JJ financial JJ instrument NN and CC whether IN it PP qualifies VVZ for IN hedge JJ accounting NN . SENT Currently RB , , the DT Company's NP gold NN put VVD option NN and CC certain JJ of IN its PP$ foreign JJ exchange NN contracts NNS qualify VVP for IN hedge JJ accounting NN and CC changes NNS in IN the DT fair JJ value NN of IN these DT derivative JJ financial JJ instruments NNS are VBP recognized VVN as IN a DT component NN of IN accumulated VVN other JJ comprehensive JJ loss NN . SENT The DT fair JJ value NN of IN the DT swap NN is VBZ recorded VVN as IN an DT asset NN or CC liability NN with IN a DT corresponding JJ charge NN to TO income NN . SENT The DT carrying VVG value NN of IN the DT Convertible JJ Debentures NNS is VBZ also RB adjusted VVN for IN changes NNS in IN fair JJ value NN attributable JJ to TO the DT risk NN being VBG hedged VVN with IN a DT corresponding JJ charge NN to TO income NN . SENT The DT Company's NP interest NN rate NN cap NN and CC written JJ foreign JJ exchange NN put NN options NNS do VVP not RB qualify VV for IN hedge JJ accounting NN and CC changes NNS in IN the DT fair JJ value NN of IN these DT derivative JJ instruments NNS are VBP recognized VVN in IN income NN . SENT Revenue NN recognition NN Revenue NN is VBZ recognized VVN when WRB the DT following VVG conditions NNS are VBP met VVN . SENT a DT persuasive JJ evidence NN of IN an DT arrangement NN to TO purchase NN exists VVZ . SENT b SYM the DT price NN is VBZ determinable JJ . SENT c SYM the DT product NN has VHZ been VBN delivered VVN . SENT and CC d NN collection NN of IN the DT sales NNS price NN is VBZ reasonably RB assured VVN . SENT Revenue NN from IN gold NN and CC silver NN in IN the DT form NN of IN dor NN bars NNS is VBZ recorded VVN when WRB the DT refined JJ gold NN and CC silver NN is VBZ sold VVN . SENT Generally RB all PDT the DT gold NN and CC silver NN in IN the DT form NN of IN dor NN bars NNS is VBZ sold VVN in IN the DT period NN in IN which WDT it PP is VBZ produced VVN . SENT Under IN the DT terms NNS of IN the DT Company's NP concentrate NN sales NNS contracts NNS with IN third JJ party NN smelters NNS , , final JJ prices NNS for IN the DT metals NNS contained VVN in IN the DT concentrate NN are VBP set VVN based VVN on IN the DT prevailing JJ spot NN market NN metal NN prices NNS on IN a DT specified JJ future JJ date NN based VVN on IN the DT date NN that IN the DT concentrate NN is VBZ delivered VVN to TO the DT smelter NN . SENT The DT Company NN records VVZ revenues NNS under IN these DT contracts NNS based VVN on IN forward JJ prices NNS at IN the DT time NN of IN delivery NN , , which WDT is VBZ when WRB transfer NN of IN legal JJ title NN to TO concentrate VV passes NNS to TO the DT third JJ party NN smelters NNS . SENT The DT terms NNS of IN the DT contracts NNS result NN in IN differences NNS between IN the DT recorded JJ estimated JJ price NN at IN delivery NN and CC the DT final JJ settlement NN price NN . SENT These DT differences NNS are VBP adjusted VVN through IN revenue NN at IN each DT subsequent JJ financial JJ statement NN date NN . SENT Revenues NNS from IN mining NN operations NNS consist VVP of IN gold NN revenues NNS , , net JJ of IN smelting VVG , , refining NN , , transportation NN and CC other JJ marketing NN charges NNS . SENT Revenues NNS from IN byproduct NN sales NNS are VBP shown VVN net JJ of IN smelter NN charges NNS as IN part NN of IN revenues NNS from IN mining NN operations NNS . SENT Foreign JJ currency NN translation NN The DT functional JJ currency NN for IN the DT Company's NP operations NNS is VBZ the DT US NP dollar NN . SENT Monetary JJ assets NNS and CC liabilities NNS of IN Agnico NP Eagle's NP operations NNS denominated VVN in IN a DT currency NN other JJ than IN the DT US NP dollar NN are VBP translated VVN into IN US NP dollars NNS using VVG the DT exchange NN rate NN in IN effect NN at IN the DT year NN end NN . SENT Non JJ monetary JJ assets NNS and CC liabilities NNS are VBP translated VVN at IN historical JJ 76 CD exchange NN rates NNS while IN revenues NNS and CC expenses NNS are VBP translated VVN at IN the DT average JJ exchange NN rate NN during IN the DT year NN , , with IN the DT exception NN of IN amortization NN , , which WDT is VBZ translated VVN at IN historical JJ exchange NN rates NNS . SENT Exchange NN gains NNS and CC losses NNS are VBP included VVN in IN income NN except IN for IN gains NNS and CC losses NNS on IN foreign JJ currency NN contracts NNS used VVN to TO hedge VV specific JJ future JJ commitments NNS in IN foreign JJ currencies NNS . SENT Gains NNS and CC losses NNS on IN these DT contracts NNS are VBP accounted VVN for IN as IN a DT component NN of IN the DT related JJ hedged VVN transactions NNS . SENT Reclamation NN costs NNS Effective JJ January NP 1 CD , , 2003 CD , , the DT Company NN adopted VVD the DT provisions NNS of IN FASB NP Statement NN No RB . SENT 143 CD FAS NP 143 CD related VVN to TO asset NN retirement NN obligations NNS . SENT FAS NP 143 NP applies VVZ to TO legal JJ obligations NNS resulting VVG from IN the DT construction NN , , development NN and CC operation NN of IN long JJ lived VVN assets NNS , , such JJ as IN mining NN assets NNS . SENT This DT standard NN requires VVZ companies NNS to TO recognize VV the DT present JJ value NN of IN reclamation NN costs NNS as IN a DT liability NN in IN the DT period NN the DT legal JJ obligation NN is VBZ incurred VVN . SENT The DT Company NN estimated VVD the DT final JJ reclamation NN provision NN taking VVG into IN account NN current JJ circumstances NNS such JJ as IN projected JJ mine NN life NN and CC current JJ throughput NN . SENT The DT provision NN was VBD updated VVN at IN the DT end NN of IN 2004 CD based VVN on IN the DT availability NN of IN more JJR accurate JJ estimates NNS . SENT Further JJR revisions NNS to TO the DT final JJ reclamation NN estimate NN could MD result VV from IN legislative JJ changes NNS or CC changes NNS in IN the DT underlying JJ assumptions NNS , , such JJ as IN life NN of IN mine NN . SENT For IN periods NNS prior RB to TO January NP 1 CD , , 2003 CD , , estimated VVN future JJ reclamation NN costs NNS were VBD based VVN primarily RB on IN legal JJ , , environmental JJ and CC regulatory JJ requirements NNS . SENT Future JJ reclamation NN costs NNS for IN the DT Company's NP inactive JJ mines NNS were VBD accrued VVN based VVN on IN management's NNS best RBS estimate VVP of IN the DT costs NNS at IN the DT end NN of IN each DT period NN , , comprising VVG costs NNS expected VVN to TO be VB incurred VVN at IN a DT site NN , , on IN an DT undiscounted JJ basis NN . SENT Such JJ cost NN estimates NNS included VVD , , where WRB applicable JJ , , ongoing JJ care NN and CC maintenance NN and CC monitoring NN costs NNS . SENT Changes NNS in IN estimates NNS were VBD reflected VVN in IN income NN in IN the DT period NN an DT estimate NN was VBD revised VVN . SENT Income NN and CC mining NN taxes NNS Agnico NP Eagle NP follows VVZ the DT liability NN method NN of IN tax NN allocation NN for IN accounting NN for IN income NN taxes NNS . SENT Under IN this DT method NN of IN tax NN allocation NN , , future JJ income NN and CC mining NN tax NN bases NNS of IN assets NNS and CC liabilities NNS are VBP measured VVN using VVG the DT enacted VVN tax NN rates NNS and CC laws NNS expected VVN to TO be VB in IN effect NN when WRB the DT differences NNS are VBP expected VVN to TO reverse VV . SENT From IN time NN to TO time NN , , the DT Company NP issues NNS flow NN through IN shares NNS to TO finance VV some DT of IN its PP$ exploration NN activities NNS . SENT Common JJ shares NNS of IN the DT Company NN are VBP issued VVN for IN cash NN in IN exchange NN for IN Agnico NP Eagle NP giving VVG up RP the DT tax NN benefits NNS arising VVG from IN the DT exploration NN activities NNS . SENT The DT difference NN between IN the DT flow NN through IN share NN issuance NN price NN and CC the DT prevailing JJ market NN price NN of IN Agnico NP Eagle NP stock NN at IN the DT time NN of IN issuance NN is VBZ recorded VVN as IN a DT liability NN at IN the DT time NN the DT flow NN through IN shares NNS are VBP issued VVN . SENT This DT liability NN is VBZ extinguished VVN at IN the DT time NN the DT exploration NN expenditures NNS are VBP renounced VVN to TO investors NNS . SENT The DT difference NN between IN the DT flow NN through IN share NN issuance NN price NN and CC market NN price NN reduces VVZ the DT future JJ tax NN expense NN charged VVN to TO income NN loss NN as IN this DT difference NN represents VVZ proceeds NNS received VVN by IN the DT Company NN for IN the DT sale NN of IN future JJ tax NN deductions NNS to TO investors NNS in IN the DT flow NN through IN shares NNS . SENT Stock NP based VVD compensation NN Agnico NP Eagle NP has VHZ two CD stock NN based VVN compensation NN plans NNS . SENT The DT Employee NP Stock NP Option NP Plan NP is VBZ described VVN in IN note NN 7 CD a DT and CC the DT Incentive NN Share NN Purchase NP Plan NP is VBZ described VVN in IN note NN 7 CD b SYM to TO the DT consolidated JJ financial JJ statements NNS . SENT In IN 2003 CD , , the DT Company NN prospectively RB adopted VVD Statement NN of IN Financial NP Accounting NP Standard NP FAS NP 123 CD , , Accounting NP for IN Stock NP Based VVN Compensation NN as IN amended VVN by IN FAS NP 148 CD , , Accounting NP for IN Stock NP Based VVN Compensation NN Transition NN and CC Disclosure NN . SENT These DT accounting NN standards NNS recommend VVP the DT expensing VVG of IN stock NN option NN grants NNS after IN January NP 1 CD , , 2003 CD . SENT The DT standards NNS recommend VVP that IN the DT fair JJ value NN of IN stock NN options NNS be VB recognized VVN in IN income NN over IN the DT applicable JJ vesting VVG period NN as IN a DT compensation NN expense NN . SENT Any DT consideration NN paid VVN by IN employees NNS on IN exercise NN of IN stock NN options NNS or CC purchase NN of IN stock NN is VBZ credited VVN to TO share NN capital NN . SENT Prior RB to TO 2003 CD , , the DT Company NN accounted VVD for IN its PP$ stock NN option NN grants NNS based VVN on IN the DT recognition NN and CC measurement NN principles NNS of IN Accounting NP Principles NNS Board NP Opinion NP No NP . SENT 25 CD and CC related VVN interpretations NNS . SENT The DT application NN of IN Opinion NP No NP . SENT 25 CD resulted VVN in IN no DT compensation NN expense NN being VBG recorded VVN , , in IN Agnico NP Eagle's NP circumstances NNS , , as IN all DT options NNS granted VVD had VHD an DT exercise NN price NN equal JJ to TO the DT market NN value NN of IN the DT underlying JJ stock NN on IN the DT date NN of IN grant NN intrinsic JJ value NN method NN . SENT Pro FW forma FW fair JJ value NN disclosures NNS assumed VVN that IN the DT estimated JJ fair JJ value NN of IN options NNS would MD be VB amortized VVN to TO expense NN over IN the DT options NNS vesting VVG period NN . SENT 77 CD In IN December NP 2004 CD , , the DT FASB NP enacted VVN FAS NP 123 CD revised VVD 2004 CD FAS NP 123 CD R NN , , Share NN Based VVN Payment NN , , which WDT replaces VVZ FAS NP 123 CD and CC supersedes VVZ APB NP Opinion NP No NP . SENT 25 CD APB NP 25 CD , , Accounting NP for IN Stock NP Issued VVD to TO Employees NNS . SENT FAS NP 123 CD R NN requires VVZ the DT measurement NN of IN all DT employee NN share NN based VVN payments NNS to TO employees NNS , , including VVG grants NNS of IN employee NN stock NN options NNS , , using VVG a DT fair JJ value NN based VVN method NN and CC the DT recording NN of IN such JJ expense NN in IN the DT consolidated JJ statement NN of IN income NN loss NN . SENT The DT accounting NN provisions NNS of IN FAS NP 123 CD R NN are VBP effective JJ for IN reporting VVG periods NNS beginning VVG after IN June NP 15 CD , , 2005 CD . SENT The DT Company NN is VBZ required VVN to TO adopt VV FAS NP 123 CD R NN in IN the DT third JJ quarter NN of IN 2005 CD . SENT Although IN the DT Company NN has VHZ been VBN recording VVG the DT fair JJ value NN of IN stock NN options NNS in IN income NN in IN 2003 CD and CC 2004 CD , , FAS NP 123 CD R NN requires VVZ the DT application NN of IN fair JJ value NN accounting NN to TO any DT stock NN options NNS that WDT were VBD granted VVN or CC modified VVN since IN January NP 1 CD , , 1995 CD . SENT The DT Company NN is VBZ evaluating VVG the DT requirements NNS under IN FAS NP 123 CD R NN and CC expects VVZ the DT adoption NN to TO have VH a DT significant JJ impact NN on IN the DT consolidated JJ statement NN of IN income NN loss NN and CC net JJ income NN loss NN per IN share NN , , but CC no DT impact NN on IN financial JJ condition NN or CC cash NN flows NNS . SENT Income NN loss NN per IN share NN Basic JJ income NN loss NN per IN share NN is VBZ calculated VVN on IN net JJ income NN loss NN for IN the DT year NN using VVG the DT weighted JJ average JJ number NN of IN common JJ shares NNS outstanding JJ during IN the DT year NN . SENT Diluted JJ income NN loss NN per IN common JJ share NN is VBZ calculated VVN on IN the DT weighted JJ average JJ number NN of IN common JJ shares NNS that WDT would MD have VH been VBN outstanding JJ during IN the DT year NN had VHD all DT Convertible JJ Debentures NNS been VBN converted VVN at IN the DT beginning NN of IN the DT year NN into IN common JJ shares NNS , , if IN such JJ conversions NNS are VBP dilutive JJ . SENT In IN addition NN , , the DT weighted JJ average JJ number NN of IN common JJ shares NNS used VVN to TO determine VV diluted JJ income NN loss NN per IN share NN includes VVZ an DT adjustment NN for IN stock NN options NNS outstanding JJ and CC warrants VVZ outstanding JJ using VVG the DT treasury NN stock NN method NN . SENT Under IN the DT treasury NN stock NN method NN . SENT the DT exercise NN of IN options NNS or CC warrants NNS is VBZ assumed VVN to TO be VB at IN the DT beginning NN of IN the DT period NN or CC date NN of IN issuance NN , , if IN later RBR . SENT the DT proceeds NNS from IN the DT exercise NN of IN options NNS or CC warrants NNS , , plus CC in IN the DT case NN of IN options NNS the DT future JJ period NN compensation NN expense NN on IN options NNS granted VVN on IN or CC after IN January NP 1 CD , , 2003 CD , , are VBP assumed VVN to TO be VB used VVN to TO purchase VV common JJ shares NNS at IN the DT average JJ market NN price NN during IN the DT period NN . SENT and CC the DT incremental JJ number NN of IN common JJ shares NNS the DT difference NN between IN the DT number NN of IN shares NNS assumed VVD issued VVN and CC the DT number NN of IN shares NNS assumed VVN purchased VVD is VBZ included VVN in IN the DT denominator NN of IN the DT diluted JJ earnings NNS per IN share NN computation NN . SENT Pension NN costs NNS and CC obligations NNS and CC post VV retirement NN benefits NNS Prior RB to TO July NP 1 CD , , 1997 CD , , Agnico NP Eagle NP had VHD a DT defined VVN benefit NN plan NN for IN its PP$ salaried JJ employees NNS , , which WDT was VBD substantially RB converted VVN to TO a DT defined VVN contribution NN plan NN . SENT In IN addition NN , , Agnico NP Eagle NP provides VVZ a DT non JJ registered JJ supplementary JJ executive NN retirement NN defined VVD benefit NN plan NN for IN its PP$ senior JJ officers NNS . SENT The DT executive JJ retirement NN plan NN benefits NNS are VBP generally RB based VVN on IN the DT employees NNS years NNS of IN service NN and CC level NN of IN compensation NN . SENT Pension NN expense NN related VVN to TO the DT defined VVN benefit NN plan NN is VBZ the DT net NN of IN the DT cost NN of IN benefits NNS provided VVN , , the DT interest NN cost NN of IN projected JJ benefits NNS , , return NN on IN plan NN assets NNS and CC amortization NN of IN experience NN gains NNS and CC losses NNS . SENT Pension NN fund NN assets NNS are VBP measured VVN at IN current JJ fair JJ values NNS . SENT Actuarially RB determined VVN plan NN surpluses NNS or CC deficits NNS , , experience NN gains NNS or CC losses NNS and CC the DT cost NN of IN pension NN plan NN improvements NNS are VBP amortized VVN on IN a DT straight JJ line NN basis NN over IN the DT expected VVN average NN remaining VVG service NN life NN of IN the DT employee NN group NN . SENT Agnico NP Eagle NP maintains VVZ a DT defined VVN contribution NN plan NN covering VVG all DT of IN its PP$ employees NNS . SENT The DT plan NN is VBZ funded VVN by IN Company NN contributions NNS based VVN on IN a DT percentage NN of IN income NN for IN services NNS rendered VVN by IN employees NNS . SENT The DT Company NN does VVZ not RB offer VV any DT other JJ post NN retirement NN benefits NNS to TO its PP$ employees NNS . SENT Comparative JJ figures NNS Certain JJ items NNS in IN the DT comparative JJ financial JJ statements NNS have VHP been VBN reclassified VVN from IN statements NNS previously RB presented VVD to TO conform VV to TO the DT presentation NN of IN the DT 2004 CD consolidated JJ financial JJ statements NNS . SENT 78 CD AGNICO NP EAGLE NN MINES NNS LIMITED JJ CONSOLIDATED JJ BALANCE NN SHEETS NNS thousands NNS of IN United NP States NPS dollars NNS , , US NP GAAP NP basis NN As IN at IN December NP 31 CD , , 2004 CD 2003 CD ASSETS NNS Current JJ Cash NN and CC cash NN equivalents NNS 33 CD , , 005 CD 56 CD , , 934 CD Restricted JJ cash NN note NN 6 CD b SYM 8 CD , , 173 CD 2 CD , , 549 CD Short JJ term NN investments NNS 64 CD , , 836 CD 50 CD , , 882 CD Metals NNS awaiting VVG settlement NN note VVP 1 CD 43 CD , , 442 CD 34 CD , , 570 CD Income NP taxes NNS recoverable JJ 16 CD , , 105 CD 7 CD , , 539 CD Inventories NNS . SENT Ore NP stockpiles NNS 9 CD , , 036 CD 6 CD , , 557 CD Concentrates VVZ 9 CD , , 065 CD 1 CD , , 346 CD Supplies NNS 8 CD , , 292 CD 6 CD , , 276 CD Other JJ current JJ assets NNS note NN 2 CD a DT 19 CD , , 843 CD 10 CD , , 363 CD Total JJ current JJ assets NNS 211 CD , , 797 CD 177 CD , , 016 CD Fair NP value NN of IN derivative JJ financial JJ instruments NNS note VVP 9 CD 2 CD , , 689 CD 7 CD , , 573 CD Other JJ assets NNS notes VVZ 2 CD b NN 25 CD , , 234 CD 11 CD , , 214 CD Future JJ income NN and CC mining NN tax NN assets NNS note VVP 8 CD 51 CD , , 407 CD 41 CD , , 579 CD Mining NP properties NNS note VVP 3 CD 427 CD , , 037 CD 399 CD , , 719 CD 718 CD , , 164 CD 637 CD , , 101 CD LIABILITIES NNS AND CC SHAREHOLDERS NNS EQUITY NN Current JJ Accounts NNS payable JJ and CC accrued JJ liabilities NNS note VVP 11 CD 28 CD , , 667 CD 29 CD , , 915 CD Dividends NNS payable JJ 3 CD , , 399 CD 3 CD , , 327 CD Interest NN payable JJ 2 CD , , 426 CD 3 CD , , 161 CD Total JJ current JJ liabilities NNS 34 CD , , 492 CD 36 CD , , 403 CD Long JJ term NN debt NN note VVP 4 CD 141 CD , , 495 CD 143 CD , , 750 CD Reclamation NN provision NN and CC other JJ liabilities NNS note VVP 5 CD 14 CD , , 815 CD 15 CD , , 377 CD Future JJ income NN and CC mining NN tax NN liabilities NNS note VVP 8 CD 57 CD , , 136 CD 40 CD , , 848 CD Shareholders NNS Equity NP Common NP shares NNS note NN 6 CD a DT Authorized JJ unlimited JJ Issued VVD 86 CD , , 072 CD , , 779 CD 2003 CD 84 CD , , 469 CD , , 804 CD 620 CD , , 704 CD 601 CD , , 305 CD Stock NP options NNS 465 CD Warrants NNS note NN 6 CD c SYM 15 CD , , 732 CD 15 CD , , 732 CD Contributed VVD surplus NN 7 CD , , 181 CD 7 CD , , 181 CD Deficit NN 172 CD , , 756 CD 218 CD , , 055 CD Accumulated VVN other JJ comprehensive JJ loss NN note NN 6 CD d SYM 1 CD , , 100 CD 5 CD , , 440 CD Total JJ shareholders NNS equity NN 470 CD , , 226 CD 400 CD , , 723 CD 718 CD , , 164 CD 637 CD , , 101 CD On IN behalf NN of IN the DT Board NP . SENT Sean NP Boyd NP C NP . SENT A DT . SENT , , Director NP Bernard NP Kraft NP C NP . SENT A DT . SENT , , Director NP See NP accompanying VVG notes NNS 79 CD AGNICO NP EAGLE NN MINES NNS LIMITED JJ CONSOLIDATED JJ STATEMENTS NNS OF IN INCOME NN LOSS NN AND CC COMPREHENSIVE JJ INCOME NN LOSS NN thousands NNS of IN United NP States NPS dollars NNS except IN per IN share NN amounts NNS , , US NP GAAP NP basis NN Years NNS ended VVN December NP 31 CD , , 2004 CD 2003 CD 2002 CD REVENUES NNS Revenues NNS from IN mining NN operations NNS 188 CD , , 049 CD 126 CD , , 820 CD 108 CD , , 027 CD Interest NN and CC sundry JJ income NN 655 CD 2 CD , , 775 CD 1 CD , , 943 CD 188 CD , , 704 CD 129 CD , , 595 CD 109 CD , , 970 CD COSTS NNS AND CC EXPENSES NNS Production NN 98 CD , , 168 CD 104 CD , , 990 CD 75 CD , , 969 CD Exploration NN and CC corporate JJ development NN 3 CD , , 584 CD 5 CD , , 975 CD 3 CD , , 766 CD Equity NP loss NN in IN junior JJ exploration NN companies NNS note NN 2 CD b SYM 2 CD , , 224 CD 1 CD , , 626 CD Amortization NN 21 CD , , 763 CD 17 CD , , 504 CD 12 CD , , 998 CD General NP and CC administrative JJ 6 CD , , 864 CD 7 CD , , 121 CD 5 CD , , 530 CD Provincial JJ capital NN tax NN 423 CD 1 CD , , 240 CD 829 CD Interest NN note VVP 4 CD 8 CD , , 205 CD 9 CD , , 180 CD 7 CD , , 341 CD Foreign JJ currency NN loss NN gain NN 1 CD , , 440 CD 72 CD 1 CD , , 074 CD Income NN loss NN before IN income NN , , mining NN and CC federal JJ capital NN taxes NNS 46 CD , , 033 CD 18 CD , , 113 CD 4 CD , , 611 CD Federal NP capital NN tax NN 1 CD , , 049 CD 1 CD , , 090 CD 949 CD Income NN and CC mining NN tax NN recoveries NNS note VVP 8 CD 2 CD , , 895 CD 1 CD , , 448 CD 361 CD Net JJ income NN loss NN before IN cumulative JJ catch NN up IN adjustment NN 47 CD , , 879 CD 17 CD , , 755 CD 4 CD , , 023 CD Cumulative JJ catch NN up IN adjustment NN relating VVG to TO FAS NP 143 CD 1 CD , , 743 CD Net JJ income NN loss NN for IN the DT year NN 47 CD , , 879 CD 19 CD , , 498 CD 4 CD , , 023 CD Net JJ income NN loss NN before IN cumulative JJ catch NN up IN adjustment NN per IN share NN basic JJ and CC diluted JJ note NN 6 CD e NN 0 CD . SENT 56 CD 0 CD . SENT 21 CD 0 CD . SENT 06 CD Cumulative JJ catch NN up IN adjustment NN per IN share NN basic JJ and CC diluted JJ 0 CD . SENT 02 CD Net JJ income NN loss NN per IN share NN basic JJ and CC diluted JJ note NN 6 CD e NN 0 CD . SENT 56 CD 0 CD . SENT 23 CD 0 CD . SENT 06 CD Comprehensive NP income NN loss NN . SENT Net JJ income NN loss NN for IN the DT year NN 47 CD , , 879 CD 19 CD , , 498 CD 4 CD , , 023 CD Other JJ comprehensive JJ income NN loss NN , , net JJ of IN tax NN . SENT Unrealized JJ gain NN loss NN on IN hedging VVG activities NNS 2 CD , , 597 CD 8 CD , , 807 CD 5 CD , , 512 CD Unrealized JJ gain NN on IN available JJ for IN sale NN securities NNS 604 CD 2 CD , , 258 CD 1 CD , , 558 CD Dilution NN gain NN on IN issuance NN of IN securities NNS by IN equity NN investee NN 1 CD , , 837 CD 4 CD , , 500 CD 1 CD , , 610 CD Minimum NP pension NN liability NN 980 CD 980 CD Cumulative JJ translation NN adjustment NN on IN equity NN investee NN 1 CD , , 937 CD Adjustments NNS for IN derivative JJ instruments NNS maturing VVG during IN the DT year NN 2 CD , , 983 CD 1 CD , , 801 CD 723 CD Adjustments NNS for IN realized VVN gains NNS on IN available JJ for IN sale NN securities NNS due JJ to TO dispositions NNS during IN the DT year NN 632 CD 1 CD , , 640 CD Other JJ comprehensive JJ income NN loss NN for IN the DT year NN 4 CD , , 340 CD 15 CD , , 726 CD 2 CD , , 601 CD Total JJ comprehensive JJ income NN loss NN for IN the DT year NN 52 CD , , 219 CD 3 CD , , 772 CD 1 CD , , 422 CD See NP accompanying JJ notes NNS 80 CD AGNICO NP EAGLE NN MINES NNS LIMITED JJ CONSOLIDATED JJ STATEMENTS NNS OF IN SHAREHOLDERS NNS EQUITY NN thousands NNS of IN United NP States NPS dollars NNS , , US NP GAAP NP basis NN Years NNS ended VVN December NP 31 CD , , 2004 CD , , 2003 CD and CC 2002 CD Common JJ Shares NP Stock NP Options NPS Outstanding JJ Contributed VVN Surplus NN Accumulated VVN Other JJ Comprehensive NP Loss NN Shares NNS Amount NN Warrants NNS Deficit NN Balance NN December NP 31 CD , , 2001 CD 67 CD , , 722 CD , , 853 CD 407 CD , , 347 CD 7 CD , , 181 CD 197 CD , , 537 CD 18 CD , , 565 CD Shares NNS issued VVN under IN Employee NP Stock NP Option NP Plan NP note NN 7 CD a DT 1 CD , , 927 CD , , 500 CD 14 CD , , 580 CD Shares NNS issued VVN under IN the DT Share NN Incentive NN Purchase NP Plan NP note NN 7 CD b SYM 138 CD , , 747 CD 2 CD , , 061 CD Shares NNS issued VVN under IN flow NN through IN share NN private JJ placement NN note NN 6 CD b SYM 40 CD , , 161 CD 617 CD Units NNS issued VVN by IN public JJ offering NN , , net JJ of IN issue NN costs NNS note NN 6 CD c SYM 13 CD , , 800 CD , , 000 CD 167 CD , , 246 CD 15 CD , , 732 CD Shares NNS issued VVN on IN the DT conversion NN of IN the DT Company's NP senior JJ convertible JJ notes NNS 4 CD , , 460 CD 80 CD Shares NNS issued VVN under IN the DT Company's NP dividend NN reinvestment NN plan NN 3 CD , , 140 CD 38 CD Net JJ income NN for IN the DT year NN 4 CD , , 023 CD Dividends NNS declared VVD 0 CD . SENT 03 CD per IN share NN note NN 6 CD a DT 2 CD , , 509 CD Other JJ comprehensive JJ loss NN for IN the DT year NN 2 CD , , 601 CD Balance NN December NP 31 CD , , 2002 CD 83 CD , , 636 CD , , 861 CD 591 CD , , 969 CD 15 CD , , 732 CD 7 CD , , 181 CD 196 CD , , 023 CD 21 CD , , 166 CD Shares NNS issued VVN under IN Employee NP Stock NP Option NP Plan NP note NN 7 CD a DT 229 CD , , 100 CD 1 CD , , 636 CD Shares NNS issued VVN under IN the DT Share NN Incentive NN Purchase NP Plan NP note NN 7 CD b SYM 217 CD , , 855 CD 2 CD , , 605 CD Shares NNS issued VVN under IN flow NN through IN share NN private JJ placement NN note NN 6 CD b SYM 255 CD , , 768 CD 3 CD , , 570 CD Shares NNS issued VVN under IN the DT Company's NP dividend NN reinvestment NN plan NN 4 CD , , 608 CD 59 CD Shares NNS issued VVN for IN acquisition NN note VVP 10 CD 125 CD , , 612 CD 1 CD , , 466 CD Net JJ loss NN for IN the DT year NN 19 CD , , 498 CD Dividends NNS declared VVD 0 CD . SENT 03 CD per IN share NN note NN 6 CD a DT 2 CD , , 534 CD Other JJ comprehensive JJ income NN for IN the DT year NN 15 CD , , 726 CD Balance NN December NP 31 CD , , 2003 CD 84 CD , , 469 CD , , 804 CD 601 CD , , 305 CD 15 CD , , 732 CD 7 CD , , 181 CD 218 CD , , 055 CD 5 CD , , 440 CD Shares NNS issued VVN under IN Employee NP Stock NP Option NP Plan NP note NN 7 CD a DT 391 CD , , 525 CD 3 CD , , 410 CD Stock NP options NNS 465 CD Shares NNS issued VVN under IN the DT Share NN Incentive NN Purchase NP Plan NP note NN 7 CD b SYM 198 CD , , 387 CD 2 CD , , 754 CD Shares NNS issued VVN under IN flow NN through IN share NN private JJ placement NN note NN 6 CD b SYM 1 CD , , 000 CD , , 000 CD 13 CD , , 114 CD Shares NNS issued VVN under IN the DT Company's NP dividend NN reinvestment NN plan NN 13 CD , , 063 CD 121 CD Net JJ income NN for IN the DT year NN 47 CD , , 879 CD Dividends NNS declared VVD 0 CD . SENT 03 CD per IN share NN note NN 6 CD a DT 2 CD , , 580 CD Other JJ comprehensive JJ income NN for IN the DT year NN 4 CD , , 340 CD Balance NN December NP 31 CD , , 2004 CD 86 CD , , 072 CD , , 779 CD 620 CD , , 704 CD 465 CD 15 CD , , 732 CD 7 CD , , 181 CD 172 CD , , 756 CD 1 CD , , 100 CD See NP accompanying JJ notes NNS 81 CD AGNICO NP EAGLE NN MINES NNS LIMITED JJ CONSOLIDATED JJ STATEMENTS NNS OF IN CASH NN FLOWS VVZ thousands NNS of IN United NP States NPS dollars NNS , , US NP GAAP NP basis NN Years NNS ended VVN December NP 31 CD , , 2004 CD 2003 CD 2002 CD Operating NN activities NNS Net JJ income NN loss NN for IN the DT year NN 47 CD , , 879 CD 19 CD , , 498 CD 4 CD , , 023 RB Add VV deduct VV items NNS not RB affecting VVG cash NN . SENT Amortization NN 21 CD , , 763 CD 17 CD , , 504 CD 12 CD , , 998 CD Future JJ income NN and CC mining NN taxes NNS 2 CD , , 338 CD 1 CD , , 090 CD 1 CD , , 183 CD Unrealized JJ loss NN gain NN on IN derivative JJ contracts NNS 1 CD , , 087 CD 2 CD , , 265 CD 1 CD , , 680 CD Cumulative JJ catch NN up IN adjustment NN relating VVG to TO FAS NP 143 CD 1 CD , , 743 CD Amortization NN of IN deferred JJ costs NNS and CC other JJ 4 CD , , 792 CD 5 CD , , 378 CD 3 CD , , 840 CD Changes NP in IN non JJ cash NN working VVG capital NN balances VVZ Metals NNS awaiting VVG settlement NN 8 CD , , 872 CD 4 CD , , 821 CD 9 CD , , 669 CD Income NP taxes NNS recoverable JJ 8 CD , , 566 CD 4 CD , , 639 CD 2 CD , , 549 CD Inventories NNS 9 CD , , 875 CD 3 CD , , 559 CD 863 CD Prepaid JJ expenses NNS and CC other JJ 1 CD , , 590 CD 5 CD , , 382 CD 2 CD , , 319 CD Accounts NNS payable JJ and CC accrued JJ liabilities NNS 1 CD , , 304 CD 17 CD , , 414 CD 8 CD , , 327 CD Interest NN payable JJ 735 CD 1 CD , , 288 CD 179 CD Cash NN provided VVN by IN operating VVG activities NNS 49 CD , , 525 CD 4 CD , , 253 CD 13 CD , , 112 CD Investing VVG activities NNS Additions NNS to TO mining NN properties NNS 53 CD , , 318 CD 42 CD , , 038 CD 64 CD , , 836 CD Additions NNS to TO short JJ term NN investments NNS 13 CD , , 954 CD 50 CD , , 882 RB Increase VV in IN investments NNS and CC other JJ 21 CD , , 936 CD 10 CD , , 438 CD 1 CD , , 773 RB Increase VV in IN restricted JJ cash NN 5 CD , , 624 CD 2 CD , , 549 CD Cash NN used VVN in IN investing VVG activities NNS 94 CD , , 832 CD 105 CD , , 907 CD 66 CD , , 609 CD Financing NP activities NNS Dividends NNS paid VVD 2 CD , , 480 CD 2 CD , , 431 CD 1 CD , , 344 CD Common JJ shares NNS issued VVD 23 CD , , 906 CD 8 CD , , 141 CD 193 CD , , 784 CD Warrants NNS issued VVD 15 CD , , 732 CD Share NN and CC warrant NN issue NN costs VVZ 253 CD 271 CD 9 CD , , 162 CD Proceeds NNS from IN long JJ term NN debt NN note VVP 4 CD 143 CD , , 750 CD Financing NP costs NNS 5 CD , , 266 CD Repayment NN of IN the DT Company's NP senior JJ convertible JJ debentures NNS note VVP 4 CD 122 CD , , 169 CD Bank NP debt NN 30 CD , , 000 CD Cash NN provided VVN by IN financing NN activities NNS 21 CD , , 173 CD 5 CD , , 439 CD 185 CD , , 325 CD Effect NN of IN exchange NN rate NN changes NNS on IN cash NN and CC cash NN equivalents NNS 205 CD 215 CD 74 CD Net JJ increase NN decrease NN in IN cash NN and CC cash NN equivalents NNS during IN the DT year NN 23 CD , , 929 CD 96 CD , , 000 CD 131 CD , , 754 CD Cash NN and CC cash NN equivalents NNS , , beginning VVG of IN year NN 56 CD , , 934 CD 152 CD , , 934 CD 21 CD , , 180 CD Cash NN and CC cash NN equivalents NNS , , end NN of IN year NN 33 CD , , 005 CD 56 CD , , 934 CD 152 CD , , 934 CD Other JJ operating NN cash NN flow NN information NN . SENT Interest NN paid VVD during IN the DT year NN 6 CD , , 999 CD 7 CD , , 750 CD 24 CD , , 427 CD Income NP , , mining NN and CC capital NN taxes NNS paid VVD recovered VVN during IN the DT year NN 222 CD 2 CD , , 887 CD 1 CD , , 982 CD See NP accompanying JJ notes NNS 82 CD AGNICO NP EAGLE NN MINES NNS LIMITED JJ NOTES NNS TO TO CONSOLIDATED JJ FINANCIAL NP STATEMENTS NNS thousands NNS of IN United NP States NPS dollars NNS except IN per IN share NN amounts NNS , , unless IN otherwise RB indicated VVN December NP 31 CD , , 2004 CD 1 CD . SENT METALS NNS AWAITING VVG SETTLEMENT NN 2004 CD 2003 CD Bullion NP awaiting VVG settlement NN 648 CD 1 CD , , 327 CD Concentrates VVZ awaiting VVG settlement NN 42 CD , , 794 CD 33 CD , , 243 CD 43 CD , , 442 CD 34 CD , , 570 CD In IN 2004 CD , , precious JJ metals NNS accounted VVD for IN 74 CD . SENT 9 CD of IN Agnico NP Eagle's NP revenues NNS from IN mining NN operations NNS 2003 CD 83 CD . SENT 7 CD . SENT 2002 CD 87 CD . SENT 7 CD . SENT Net JJ byproduct NN revenues NNS in IN 2004 CD consisted VVN of IN 17 CD . SENT 6 CD zinc NN 2003 CD 11 CD . SENT 2 LS . SENT 2002 CD 12 CD . SENT 3 CD and CC 7 CD . SENT 5 CD copper NN 2003 CD 5 CD . SENT 1 LS . SENT 2002 CD nil NN . SENT 2 LS . SENT OTHER JJ ASSETS NNS a DT Other JJ current JJ assets NNS 2004 CD 2003 CD Available JJ for IN sale NN securities NNS at IN market NN value NN 13 CD , , 793 CD 4 CD , , 426 CD Prepaid JJ expenses NNS 737 CD 1 CD , , 269 CD Employee NP loans NNS receivable JJ 482 CD 540 CD Federal JJ and CC provincial JJ sales NNS taxes NNS receivable JJ 3 CD , , 658 CD 3 CD , , 499 CD Other JJ 1 CD , , 173 CD 629 CD 19 CD , , 843 CD 10 CD , , 363 CD In IN 2004 CD , , the DT Company NN realized VVD 1 CD , , 327 CD 2003 CD 3 CD , , 692 CD in IN proceeds NNS and CC recorded VVD a DT gain NN of IN 839 CD 2002 CD 2 CD , , 507 CD in IN income NN on IN the DT sale NN of IN available JJ for IN sale NN securities NNS . SENT The DT cost NN basis NN of IN available JJ for IN sale NN securities NNS is VBZ determined VVN using VVG the DT average JJ cost NN method NN . SENT b SYM Other JJ assets NNS 2004 CD 2003 CD Deferred JJ financing NN costs NNS , , less RBR accumulated VVN amortization NN of IN 3 CD , , 488 CD 2003 CD 2 CD , , 321 CD 7 CD , , 580 CD 8 CD , , 080 CD Loan NN to TO Contact NP Diamond NP Corporation NP 3 CD , , 024 CD 2 CD , , 739 CD Investment NN in IN Riddarhyttan NP Resources NPS AB NP 14 CD , , 170 CD Other JJ 460 CD 395 CD 25 CD , , 234 CD 11 CD , , 214 CD The DT change NN in IN the DT loan NN to TO Contact NP Diamond NP Corporation NP formerly RB Sudbury NP Contact NP Mines NPS Limited NP Contact NP Diamond NP from IN the DT prior JJ year NN is VBZ attributable JJ primarily RB to TO the DT difference NN in IN foreign JJ exchange NN rates NNS at IN the DT respective JJ year NN ends NNS . SENT Riddarhyttan NP Resources NPS AB NP During IN the DT year NN , , Agnico NP Eagle NP purchased VVD a DT 14 CD stake NN in IN Riddarhyttan NP Resources NPS AB NP Riddarhyttan NP , , a DT public JJ company NN listed VVN on IN the DT Stockholm NP Stock NP Exchange NP in IN Sweden NP under IN the DT trading NN symbol NN RHYT NP . SENT Agnico NP Eagle NP is VBZ accounting VVG for IN its PP$ investment NN in IN Riddarhyttan NP using VVG the DT equity NN method NN of IN accounting NN . SENT Although IN Agnico NP Eagle NP owns VVZ less JJR than IN 20 CD of IN Riddarhyttan's NP common JJ stock NN , , Agnico NP Eagle NP is VBZ able JJ to TO significantly RB influence VV Riddarhyttan's NP operating NN , , investing VVG and CC financing VVG activities NNS through IN its PP$ representation NN on IN Riddarhyttan's NP Board NP of IN Directors NPS . SENT 83 CD As IN at IN December NP 31 CD , , 2004 CD , , the DT Company NN owned VVD 14 CD , , 538 CD , , 461 CD shares NNS with IN a DT market NN value NN of IN US NP 16 CD . SENT 7 CD million CD . SENT Contact NP Diamond NP Corporation NP As IN a DT result NN of IN issuances NNS of IN stock NN by IN Contact NP Diamond NP in IN 2003 CD , , the DT Company's NP interest NN in IN Contact NP Diamond NP was VBD diluted VVN to TO below IN 50 CD . SENT The DT Company NN therefore RB ceased VVD consolidating VVG the DT results NNS of IN Contact NP Diamond NP and CC began VVD accounting NN for IN its PP$ investment NN using VVG the DT equity NN method NN of IN accounting NN on IN September NP 1 CD , , 2003 CD . SENT Agnico NP Eagle's NP 2003 CD share NN of IN losses NNS in IN Contact NP Diamond NP decreased VVD the DT book NN value NN of IN the DT investment NN in IN Contact NP Diamond NP to TO nil NN as IN at IN December NP 31 CD , , 2003 CD , , with IN the DT excess NN applied VVD to TO reduce VV the DT outstanding JJ debt NN . SENT In IN 2004 CD , , as IN a DT result NN of IN further JJR issuances NNS of IN stock NN by IN Contact NP Diamond NP , , Agnico NP Eagle NP recorded VVD a DT dilution NN gain NN with IN a DT resultant JJ increase NN in IN the DT carrying VVG value NN of IN its PP$ investment NN in IN Contact NP Diamond NP . SENT As IN Contact NP Diamond NP is VBZ considered VVN a DT development NN stage NN enterprise NN , , the DT dilution NN gain NN was VBD recorded VVN in IN other JJ comprehensive JJ income NN loss NN for IN the DT year NN . SENT The DT carrying VVG value NN of IN the DT investment NN resulting VVG from IN issuances NNS of IN stock NN by IN Contact NP Diamond NP was VBD reduced VVN to TO nil NN at IN December NP 31 CD , , 2004 CD as IN a DT result NN of IN Agnico NP Eagle NP recording VVG its PP$ share NN of IN losses NNS in IN Contact NP Diamond NP . SENT As RB at IN December NP 31 CD , , 2004 CD , , the DT Company NN owned VVD 44 CD 13 CD , , 814 CD , , 077 CD shares NNS of IN Contact NP Diamond NP , , with IN a DT market NN value NN of IN US NP 9 CD . SENT 0 CD million CD . SENT Contact NP Diamond NP is VBZ a DT public JJ company NN listed VVN on IN the DT Toronto NP Stock NP Exchange NP under IN the DT trading NN symbol NN CO NP . SENT The DT loan NN to TO Contact NP Diamond NP is VBZ due JJ on IN demand NN , , unsecured JJ and CC bears VVZ interest NN at IN 8 CD per IN annum NN . SENT Agnico NP Eagle NP has VHZ waived VVN interest NN on IN the DT loan NN commencing VVG May NP 13 CD , , 2002 CD and CC will MD not RB charge VV interest NN or CC demand NN repayment NN of IN the DT loan NN and CC any DT outstanding JJ interest NN within IN the DT next JJ year NN . SENT Accordingly RB , , the DT outstanding JJ principal NN and CC accrued JJ interest NN on IN the DT loan NN has VHZ been VBN classified VVN as IN a DT long JJ term NN asset NN . SENT Loss NN on IN equity NN accounted VVD investments NNS . SENT 2004 CD 2003 CD Riddarhyttan NP Resources NPS AB NP 440 CD Contact NP Diamonds NNS Corporation NP 1 CD , , 784 CD 1 CD , , 626 CD 2 CD , , 224 CD 1 CD , , 626 CD 3 CD . SENT MINING VVG PROPERTIES NPS 2004 RB 2003 CD Cost NN Accumulated VVN Amortization NN Net JJ Book NP Value NP Cost NN Accumulated VVN Amortization NN Net JJ Book NP Value NP Mining NP properties NNS 78 CD , , 301 CD 13 CD , , 496 CD 64 CD , , 805 CD 60 CD , , 362 CD 10 CD , , 289 CD 50 CD , , 073 CD Plant NN and CC equipment NN 288 CD , , 847 CD 82 CD , , 620 CD 206 CD , , 227 CD 274 CD , , 725 CD 72 CD , , 290 CD 202 CD , , 435 CD Mine NP development NN costs NNS 200 CD , , 971 CD 44 CD , , 966 CD 156 CD , , 005 CD 181 CD , , 761 CD 34 CD , , 550 CD 147 CD , , 211 CD 568 CD , , 119 CD 141 CD , , 082 CD 427 CD , , 037 CD 516 CD , , 848 CD 117 CD , , 129 CD 399 CD , , 719 CD The DT Company's NP El NP Coco NP property NN El NP Coco NP , , located VVN adjacent JJ to TO and CC immediately RB east JJ of IN the DT Company's NP LaRonde NP Mine NP , , is VBZ subject JJ to TO a DT royalty NN interest NN payable JJ to TO Barrick NP Gold NP Corporation NP . SENT The DT El NP Coco NP royalty NN , , on IN production NN from IN an DT area NN that WDT extends VVZ 500 CD metres NNS from IN the DT property NN boundary NN with IN the DT LaRonde NP Mine NP , , consists VVZ of IN a DT 50 CD net JJ profits NNS interest NN NPI NP , , which WDT is VBZ defined VVN as IN net JJ revenues NNS from IN the DT sale NN of IN minerals NNS produced VVN from IN 84 CD the DT property NN less RBR the DT pro NN rated VVN portion NN of IN the DT production NN costs NNS and CC allowable JJ direct JJ and CC common JJ capital NN expenditures NNS related VVN to TO the DT exploration NN and CC development NN of IN the DT property NN . SENT The DT remaining JJ area NN of IN the DT El NP Coco NP property NN is VBZ subject JJ to TO a DT 4 CD net JJ smelter NN return NN royalty NN defined VVN as IN gross JJ revenues NNS from IN the DT sale NN of IN minerals NNS less CC applicable JJ refining NN , , selling NN and CC delivery NN costs NNS and CC applicable JJ taxes NNS . SENT During IN 2004 CD , , the DT Company NN made VVN NPI NP royalty NN payments NNS of IN 2 CD . SENT 2 CD million CD 2003 CD 8 CD . SENT 9 CD million CD . SENT 2002 CD 12 CD . SENT 0 CD million CD . SENT No DT further JJR payments NNS are VBP expected VVN to TO be VB made VVN as IN the DT economical JJ mining NN activity NN in IN the DT area NN subject NN to TO the DT royalty NN has VHZ been VBN completed VVN . SENT 4 LS . SENT LONG JJ TERM NN DEBT NN a DT Convertible JJ subordinated JJ debentures NNS The DT Company's NP convertible JJ subordinated JJ debentures NNS the DT Convertible JJ Debentures NNS bear VVP interest NN of IN 4 CD . SENT 50 CD per IN annum NN , , payable JJ in IN cash NN semi NN annually RB , , on IN the DT principal JJ amount NN of IN 144 CD million CD . SENT The DT debentures NNS are VBP convertible JJ into IN common JJ shares NNS of IN Agnico NP Eagle NP at IN the DT option NN of IN the DT holder NN , , at IN any DT time NN on IN or CC prior RB to TO maturity NN , , at IN a DT rate NN of IN 71 CD . SENT 429 CD common JJ shares NNS per IN 1 CD , , 000 CD US NP dollar NN principal NN amount NN . SENT The DT debentures NNS are VBP redeemable JJ by IN Agnico NP Eagle NP , , in IN whole NN or CC in IN part NN , , at IN any DT time NN on IN or CC after IN February NP 15 CD , , 2006 CD at IN a DT redemption NN price NN equal JJ to TO par NN plus CC accrued JJ and CC unpaid JJ interest NN . SENT The DT Company NN may MD redeem VV the DT debentures NNS in IN cash NN or CC , , at IN the DT option NN of IN the DT Company NN , , by IN delivering VVG freely RB tradeable JJ common JJ shares NNS . SENT In IN 2004 CD , , interest NN on IN the DT debentures NNS of IN nil NN was VBD capitalized VVN for IN the DT construction NN of IN the DT Lapa NP and CC Goldex NP properties NNS as IN the DT amount NN was VBD determined VVN to TO not RB be VB significant JJ . SENT In IN late JJ 2003 CD , , the DT Company NN entered VVN into IN an DT interest NN rate NN swap NN whereby WRB fixed VVN rate NN payments NNS on IN the DT convertible JJ subordinated JJ debentures NNS were VBD swapped VVN for IN variable JJ rate NN payments NNS . SENT The DT notional JJ amount NN under IN the DT swap NN exactly RB matches VVZ the DT 144 CD million CD face NN value NN of IN the DT debentures NNS and CC the DT swap NN agreement NN terminates VVZ on IN February NP 15 CD , , 2006 CD , , which WDT is VBZ the DT earliest JJS date NN that IN the DT debentures NNS can MD be VB called VVN for IN redemption NN . SENT Under IN the DT terms NNS of IN the DT swap NN agreement NN , , the DT Company NN makes VVZ interest NN payments NNS of IN three CD month NN LIBOR NP plus CC a DT spread NN of IN 2 CD . SENT 37 CD and CC receives VVZ fixed JJ interest NN payments NNS of IN 4 CD . SENT 50 CD , , which WDT completely RB offsets VVZ the DT interest NN payments NNS the DT Company NN makes VVZ on IN the DT subordinated JJ convertible JJ debentures NNS . SENT The DT three CD month NN LIBOR NP rate NN was VBD also RB capped VVN at IN 3 CD . SENT 38 CD such JJ that IN total JJ variable JJ interest NN payments NNS will MD not RB exceed VV 5 CD . SENT 75 CD . SENT Throughout IN 2004 CD , , the DT Company NN received VVD 0 CD . SENT 9 CD million CD in IN swap NN payments NNS such JJ that IN net JJ interest NN on IN the DT Convertible JJ Debentures NNS was VBD 5 CD . SENT 6 CD million CD . SENT b SYM Revolving JJ credit NN facility NN Prior RB to TO December NP 2004 CD , , the DT revolving JJ credit NN facility NN the DT Facility NP was VBD with IN a DT syndicate NN of IN banks NNS that WDT provided VVD the DT Company NN with IN up RB to TO 125 CD million CD of IN revolving JJ debt NN . SENT Under IN the DT terms NNS of IN the DT Facility NP , , which WDT was VBD primarily RB secured VVN by IN a DT first JJ charge NN on IN the DT Company's NP LaRonde NP Mine NP and CC the DT El NP Coco NP property NN , , an DT initial JJ tranche NN of IN 100 CD million CD was VBD available JJ and CC a DT second JJ tranche NN of IN 25 CD million CD was VBD also RB made VVN available JJ upon IN satisfaction NN of IN certain JJ completion NN tests NNS in IN connection NN with IN the DT LaRonde NP Mine NP expansion NN to TO 7 CD , , 000 CD tons NNS of IN ore NN per IN day NN . SENT The DT Facility NP was VBD fully RB revolving JJ until IN the DT end NN of IN 2004 CD , , at IN which WDT time NN the DT drawn VVN portion NN of IN the DT Facility NP was VBD to TO begin VV to TO amortize VV at IN annual JJ rates NNS of IN 25 CD , , 32 CD . SENT 5 CD , , 20 CD , , 12 CD . SENT 5 CD and CC 10 CD in IN the DT years NNS 2004 CD to TO 2008 CD , , respectively RB . SENT The DT interest NN rate NN under IN the DT Facility NP was VBD LIBOR NP plus CC 2 CD . SENT 25 CD per IN annum NN with IN a DT standby JJ fee NN of IN 1 CD per IN annum NN on IN any DT undrawn NN portion NN of IN the DT Facility NP . SENT At IN the DT end NN of IN 2003 CD and CC up RB to TO the DT point NN of IN refinancing NN , , the DT Facility NP was VBD completely RB undrawn NN . SENT In IN 2004 CD , , the DT Company NN amended VVD its PP$ revolving JJ bank NN facility NN with IN a DT syndicate NN of IN international JJ banks NNS . SENT The DT amended VVN facility NN provides VVZ the DT Company NN with IN a DT 100 CD million CD line NN of IN credit NN on IN a DT revolving JJ basis NN . SENT The DT amended VVN facility NN matures VVZ and CC all DT indebtedness NN thereunder RB is VBZ due JJ and CC payable JJ on IN December NP 23 CD , , 2007 CD . SENT The DT Company NN , , with IN the DT consent NN of IN lenders NNS representing VVG 662 CD 3 CD of IN the DT aggregate JJ commitments NNS under IN the DT amended VVN facility NN , , has VHZ the DT 85 CD option NN to TO extend VV the DT term NN of IN the DT amended VVN facility NN for IN three CD additional JJ one CD year NN terms NNS to TO December NP 23 CD , , 2010 CD . SENT The DT amended VVN facility NN is VBZ available JJ in IN multiple JJ currencies NNS through IN prime JJ rate NN , , base NN rate NN and CC LIBOR NP advances NNS and CC through IN bankers NNS acceptances NNS priced VVN at IN the DT applicable JJ rate NN plus IN a DT margin NN that WDT ranges VVZ from IN 2 CD . SENT 25 CD to TO 1 CD . SENT 50 CD depending VVG on IN certain JJ financial JJ ratios NNS . SENT The DT lenders NNS under IN the DT amended VVN facility NN are VBP each DT paid VVD a DT commitment NN fee NN at IN a DT rate NN that IN changes NNS from IN 0 CD . SENT 5 CD to TO 0 CD . SENT 875 CD depending VVG on IN financial JJ ratios NNS . SENT Payment NN and CC performance NN of IN the DT Company's NP obligations NNS under IN the DT amended VVN facility NN are VBP secured VVN by IN substantially RB all PDT the DT property NN relating VVG to TO the DT LaRonde NP Mine NP and CC the DT El NP Coco NP property NN . SENT The DT amended VVN facility NN limits NNS , , among IN other JJ things NNS , , the DT Company's NP ability NN to TO incur VV additional JJ indebtedness NN , , pay NN dividends NNS or CC make VV payments NNS in IN respect NN of IN its PP$ common JJ shares NNS , , make VV investments NNS or CC loans NNS , , transfer VV the DT Company's NP assets NNS or CC make VV expenditures NNS relating VVG to TO property NN secured VVN under IN the DT credit NN agreement NN at IN that DT time NN that WDT are VBP not RB consistent JJ with IN the DT mine JJ plan NN and CC operating NN budget NN delivered VVN pursuant JJ to TO the DT credit NN facility NN . SENT Further RBR , , the DT agreement NN requires VVZ the DT Company NN to TO maintain VV specified JJ financial JJ ratios NNS and CC meet VV financial JJ condition NN covenants NNS . SENT Under IN the DT terms NNS of IN the DT amended VVN facility NN , , the DT Company NN has VHZ entered VVN into IN derivative JJ agreements NNS subsequent JJ to TO year NN end NN to TO ensure VV that IN the DT projected VVN revenues NNS from IN sales NNS of IN metals NNS are VBP sufficient JJ to TO reasonably RB ensure VV that IN the DT Company NN will MD be VB in IN compliance NN with IN financial JJ and CC other JJ covenants NNS in IN the DT credit NN agreement NN . SENT For IN the DT year NN ended VVN December NP 31 CD , , 2004 CD , , interest NN expense NN was VBD 8 CD . SENT 2 CD million CD 2003 CD 9 CD . SENT 2 CD million CD . SENT 2002 CD 7 CD . SENT 3 CD million CD , , of IN which WDT cash NN payments NNS were VBD 7 CD . SENT 0 CD million CD 2003 CD 8 CD . SENT 0 CD million CD . SENT 2002 CD 24 CD . SENT 4 CD million CD . SENT Approximately RB 19 CD million CD of IN the DT cash NN interest NN payments NNS in IN 2002 CD were VBD in IN connection NN with IN the DT redemption NN of IN the DT Company's NP January NP 27 CD , , 2004 CD senior JJ convertible JJ notes NNS . SENT In IN 2004 CD , , cash NN interest NN on IN the DT Facility NP was VBD nil NN 2003 CD nil NN . SENT 2002 CD 1 CD . SENT 3 CD million CD and CC cash VV standby JJ fees NNS on IN the DT Facility NP were VBD 1 CD . SENT 4 CD million CD 2003 CD 1 CD . SENT 2 CD million CD . SENT 2002 CD 1 CD . SENT 0 CD million CD . SENT In IN 2004 CD , , cash NN interest NN on IN the DT Facility NP of IN nil NN 2003 CD nil NN . SENT 2002 CD 2 CD . SENT 3 CD million CD was VBD capitalized VVN to TO construction NN in IN progress NN . SENT The DT Company's NP weighted JJ average NN interest NN rate NN on IN all PDT its PP$ debt NN for IN the DT year NN ended VVN December NP 31 CD , , 2004 CD was VBD 4 CD . SENT 9 CD 2003 CD 6 CD . SENT 4 LS . SENT 2002 CD 7 CD . SENT 6 CD . SENT 5 CD . SENT RECLAMATION NN PROVISION NN AND CC OTHER JJ LIABILITIES NNS Reclamation NN provision NN and CC other JJ liabilities NNS consist VVP of IN the DT following NN . SENT 2004 CD 2003 CD Reclamation NN and CC closure NN costs NNS note NN 5 CD a DT 11 CD , , 560 CD 11 CD , , 629 CD Pension NP benefits NNS note NN 5 CD b SYM 3 CD , , 255 CD 3 CD , , 748 CD 14 CD , , 815 CD 15 CD , , 377 CD a DT Reclamation NN and CC closure NN costs NNS Under IN mine JJ closure NN plans NNS submitted VVN to TO the DT Minister NP of IN Natural NP Resources NPS in IN Quebec NP , , the DT estimated JJ future JJ reclamation NN costs NNS for IN the DT LaRonde NP and CC Bousquet NP mines NNS are VBP approximately RB 18 CD . SENT 2 CD million CD and CC 2 CD . SENT 9 CD million CD , , respectively RB . SENT These DT reclamation NN estimates NNS are VBP based VVN on IN current JJ legislation NN and CC there EX can MD be VB no DT assurance NN that IN the DT Minister NP of IN Natural NP Resources NPS will MD not RB impose VV additional JJ reclamation NN obligations NNS with IN higher JJR costs NNS . SENT All DT of IN the DT accrued JJ reclamation NN and CC closure NN costs NNS are VBP long JJ term NN in IN nature NN and CC thus RB no DT portion NN of IN these DT costs NNS has VHZ been VBN reclassified VVN to TO current JJ liabilities NNS . SENT The DT Company NN does VVZ not RB currently RB have VH assets NNS that WDT are VBP restricted VVN for IN the DT purposes NNS of IN settling VVG these DT obligations NNS . SENT 86 RB The DT following VVG table NN reconciles VVZ the DT beginning VVG and CC ending VVG carrying VVG amount NN of IN asset NN retirement NN obligations NNS . SENT 2004 CD 2003 CD Asset NP retirement NN obligations NNS , , beginning VVG of IN year NN 11 CD , , 629 CD 5 CD , , 520 CD Current JJ year NN accretion NN 399 CD 424 CD Reclamation NN payments NNS 468 CD 44 CD Liabilities NNS incurred VVN on IN the DT purchase NN of IN the DT Bousquet NP mine NN 5 CD , , 729 CD Asset NP retirement NN obligations NNS , , end NN of IN year NN 11 CD , , 560 CD 11 CD , , 629 CD b SYM Pension NN benefits NNS Effective JJ July NP 1 CD , , 1997 CD , , Agnico NP Eagle's NP defined VVD benefit NN pension NN plan NN for IN active JJ employees NNS was VBD converted VVN to TO a DT defined VVN contribution NN plan NN . SENT Employees NNS retired VVD prior RB to TO that DT date NN remain VVP in IN the DT defined VVN benefit NN pension NN plan NN . SENT In IN addition NN , , Agnico NP Eagle NP provides VVZ a DT non JJ registered JJ executive NN supplementary JJ defined VVN benefit NN plan NN for IN certain JJ senior JJ officers NNS . SENT The DT funded JJ status NN of IN Agnico NP Eagle's NP defined VVD benefit NN employees NNS pension NN plan NN Employee's NP Plan NP is VBZ based VVN on IN an DT actuarial JJ valuation NN as IN of IN January NP 1 CD , , 2003 CD and CC projected VVN to TO December NP 31 CD , , 2004 CD . SENT The DT funded JJ status NN of IN the DT executive JJ supplementary JJ defined VVN benefit NN plan NN is VBZ based VVN on IN an DT actuarial JJ valuation NN as IN of IN July NP 1 CD , , 2004 CD and CC projected VVN to TO December NP 31 CD , , 2004 CD . SENT The DT components NNS of IN Agnico NP Eagle's NP net JJ pension NN plan NN expense NN are VBP as RB follows VVZ . SENT 2004 CD 2003 CD 2002 CD Service NP cost NN benefits NNS earned VVD during IN the DT year NN 306 CD 263 CD 210 CD Gain NN due JJ to TO settlement NN 783 CD Prior RB service NN cost VVD 20 CD Interest NN cost NN on IN projected JJ benefit NN obligation NN 488 CD 419 CD 348 CD Return NN on IN plan NN assets NNS 151 CD 127 CD 125 CD Amortization NN of IN net JJ transition NN asset NN , , past JJ service NN liability NN and CC net JJ experience NN gains NNS 208 CD 84 CD 138 CD Net JJ pension NN plan NN expense NN 88 CD 639 CD 295 CD Agnico NP Eagle NP contributes VVZ 5 CD of IN its PP$ payroll NN expense NN to TO a DT defined VVN contribution NN plan NN . SENT The DT expense NN in IN 2004 CD was VBD 1 CD . SENT 8 CD million CD 2003 CD 1 CD . SENT 4 CD million CD . SENT 2002 CD 1 CD . SENT 1 CD million CD . SENT Assets NNS of IN the DT Employees NP Plan NP are VBP comprised VVN of IN pooled JJ Canadian NP and CC US NP equity NN funds NNS and CC pooled JJ bond NN funds NNS . SENT As RB of IN the DT measurement NN date NN , , the DT plan's JJ assets NNS are VBP allocated VVN 58 CD to TO equity NN securities NNS and CC 42 CD to TO fixed JJ income NN securities NNS . SENT The DT Employees NP Plan NP is VBZ relatively RB mature JJ with IN a DT substantial JJ portion NN of IN the DT projected VVN benefit NN obligation NN liability NN attributable JJ to TO pensioners NNS and CC there EX are VBP no DT contributions NNS being VBG made VVN to TO the DT plan NN . SENT Since IN benefit NN payments NNS are VBP completely RB funded VVN from IN plan NN assets NNS and CC investment NN returns NNS , , the DT plan NN assets NNS are VBP managed VVN to TO 87 RB achieve VV a DT moderate JJ degree NN of IN risk NN in IN terms NNS of IN short JJ term NN variability NN of IN returns NNS . SENT The DT major JJ categories NNS of IN plan NN assets NNS along IN with IN minimum NN , , maximum NN and CC target NN allocations NNS are VBP presented VVN below RB . SENT Minimum JJ Maximum NN Target NP Cash NP and CC short JJ term NN investments NNS 0 CD 35 CD 5 CD Fixed JJ income NN securities NNS 25 CD 75 CD 35 CD Equity NP securities NNS 25 CD 65 CD 60 CD Real JJ estate NN 0 CD 10 CD 0 CD Fixed JJ income NN securities NNS must MD meet VV quality NN constraints NNS in IN the DT form NN of IN minimum JJ investment NN ratings NNS . SENT Equity NN securities NNS also RB have VHP quality JJ constraints NNS in IN the DT form NN of IN maximum JJ allocations NNS to TO any DT one CD security NN and CC maximum JJ exposure NN to TO any DT one CD industry NN group NN . SENT The DT accumulated VVN benefit NN obligation NN for IN the DT Employees NP Plan NP is VBZ equal JJ to TO the DT projected JJ benefit NN obligation NN and CC no DT amount NN was VBD included VVN in IN accumulated VVN other JJ comprehensive JJ loss NN for IN this DT plan NN in IN 2004 CD or CC 2003 CD . SENT Assets NNS for IN the DT executives NNS retirement NN plan NN Executives NP Plan NP consist VVP of IN deposits NNS on IN hand NN with IN regulatory JJ authorities NNS which WDT are VBP refundable JJ when WRB benefit NN payments NNS are VBP made VVN or CC on IN the DT ultimate JJ wind NN up RB of IN the DT plan NN . SENT The DT accumulated VVN benefit NN obligation NN for IN this DT plan NN at IN December NP 31 CD , , 2004 CD was VBD 3 CD . SENT 2 CD million CD 2003 CD 3 CD . SENT 7 CD million CD and CC 0 CD . SENT 9 CD million CD 2003 CD nil NN was VBD recorded VVN in IN other JJ comprehensive JJ income NN loss NN arising VVG from IN a DT change NN in IN the DT additional JJ minimum JJ pension NN liability NN . SENT At IN the DT end NN of IN 2004 CD , , the DT remaining JJ unamortized JJ net JJ transition NN obligation NN was VBD 1 CD . SENT 4 CD million CD 2003 CD 1 CD . SENT 3 CD million CD for IN the DT Executives NP Plan NP and CC the DT net JJ transition NN asset NN was VBD 0 CD . SENT 7 CD million CD 2003 CD 0 CD . SENT 8 CD million CD for IN the DT Employees NP Plan NP . SENT 88 RB The DT funded JJ status NN of IN the DT Employees NPS and CC the DT Executives NNS plans VVZ for IN 2004 CD and CC 2003 CD are VBP as RB follows VVZ . SENT 2004 CD 2003 CD Employees NP Executives NNS Employees NP Executives NNS Reconciliation NN of IN the DT market NN value NN of IN plan NN assets NNS Fair NN value NN of IN plan NN assets NNS , , beginning VVG of IN year NN 2 CD , , 132 CD 275 CD 1 CD , , 576 CD 200 CD Agnico NP Eagle's NP contribution NN 340 CD 56 CD Actual JJ return NN on IN plan NN assets NNS 115 CD 321 CD Benefit NP payments NNS 202 CD 170 CD 132 CD 28 CD Other JJ 246 CD Divestitures NNS 77 CD Effect NN of IN exchange NN rate NN changes VVZ 151 CD 48 CD 367 CD 47 CD Fair NP value NN of IN plan NN assets NNS , , end NN of IN year NN 2 CD , , 196 CD 662 CD 2 CD , , 132 CD 275 CD Reconciliation NN of IN projected JJ benefit NN obligation NN Projected VVD benefit NN obligation NN , , beginning VVG of IN year NN 1 CD , , 768 CD 5 CD , , 893 CD 1 CD , , 468 CD 4 CD , , 081 CD Service NP costs NNS 307 CD 263 CD Interest NP costs NNS 103 CD 385 CD 101 CD 318 CD Actuarial JJ losses NNS gains NNS 61 CD 1 CD , , 938 CD 35 CD 188 CD Benefit NP payments NNS 202 CD 245 CD 132 CD 28 CD Plan NP amendments NNS 118 CD 29 CD 92 CD Settlements NP 854 CD Effect NN of IN exchange NN rate NN changes VVZ 128 CD 254 CD 325 CD 979 CD Projected JJ benefit NN obligation NN , , end NN of IN year NN 1 CD , , 858 CD 3 CD , , 920 CD 1 CD , , 768 CD 5 CD , , 893 CD Excess JJ deficiency NN of IN plan NN assets NNS over IN projected JJ benefit NN obligation NN 338 CD 3 CD , , 258 CD 364 CD 5 CD , , 618 CD Comprised VVN of IN . SENT Unamortized JJ transition NN asset NN liability NN 722 CD 1 CD , , 426 CD 839 CD 1 CD , , 271 CD Unamortized JJ net JJ experience NN gain NN loss NN 284 CD 1 CD , , 423 CD 167 CD 599 CD Accrued JJ liabilities NNS 100 CD 3 CD , , 255 CD 308 CD 3 CD , , 748 CD 338 CD 3 CD , , 258 CD 364 CD 5 CD , , 618 CD Weighted JJ average JJ discount NN rate NN i NP 6 CD . SENT 25 CD 6 CD . SENT 25 CD 6 CD . SENT 50 CD 6 CD . SENT 50 CD Weighted JJ average NN expected VVN long JJ term NN rate NN of IN return NN 7 CD . SENT 50 CD ii NN n NN . SENT a DT 7 CD . SENT 50 CD ii NN n NN . SENT a DT Weighted JJ average JJ rate NN of IN compensation NN increase NN n NN . SENT a DT 3 CD . SENT 0 CD n NN . SENT a DT . SENT 3 LS . SENT 0 CD Estimated JJ average NN remaining VVG service NN life NN for IN the DT plan NN in IN years NNS 13 CD . SENT 0 CD 10 CD . SENT 0 CD iii NN 5 CD . SENT 0 CD 8 CD . SENT 0 CD iii NN Notes NNS . SENT i NP Discount NN rates NNS used VVN for IN the DT Executives NP Plan NP are VBP after IN tax NN rates NNS . SENT ii NP Long NP term NN rates NNS of IN return NN were VBD determined VVN using VVG , , as IN a DT basis NN , , rates NNS for IN high JJ quality NN debt NN instruments NNS adjusted VVN for IN historical JJ rates NNS of IN return NN actually RB achieved VVN . SENT iii NNS Estimated VVN average JJ remaining JJ service NN life NN for IN the DT Executives NP Plan NP was VBD developed VVN for IN individual JJ senior JJ officers NNS . SENT 89 CD The NP estimated VVN benefits NNS to TO be VB paid VVN from IN each DT plan NN in IN the DT next JJ ten CD years NNS is VBZ presented VVN below RB . SENT Employees NNS Executives NNS Total JJ 2005 CD 255 CD 152 JJ 407 CD 2006 CD 256 JJ 152 CD 408 CD 2007 JJ 255 CD 152 CD 407 JJ 2008 CD 251 CD 152 JJ 403 CD 2009 CD 249 JJ 152 CD 401 CD 2010 JJ 2014 CD 1 CD , , 182 CD 760 CD 1 CD , , 942 CD 6 CD . SENT SHAREHOLDERS NNS EQUITY NN a DT Common JJ shares NNS The DT Company's NP common JJ shares NNS are VBP covered VVN by IN a DT Shareholder NN Rights NP Plan NP whereby WRB each DT shareholder NN , , in IN the DT event NN of IN certain JJ takeover NN bids NNS or CC other JJ change NN in IN control NN transactions NNS involving VVG the DT acquisition NN of IN 20 CD or CC more JJR of IN Agnico NP Eagle's NP outstanding JJ voting NN shares NNS , , has VHZ the DT right JJ Rights NNS to TO purchase VV from IN Agnico NP Eagle NP for IN an DT exercise NN price NN of IN C NP 80 CD . SENT 00 CD that IN number NN of IN shares NNS of IN Agnico NP Eagle NP having VHG an DT aggregate JJ market NN price NN equal JJ to TO twice RB the DT exercise NN price NN . SENT Until IN such JJ time NN as IN a DT triggering VVG bid NN for IN control NN occurs VVZ , , the DT Rights NP trade NN together RB with IN the DT existing JJ common JJ shares NNS and CC will MD expire VV on IN May NP 10 CD , , 2009 CD . SENT The DT Company NN has VHZ reserved VVN for IN issuance NN 10 CD , , 267 CD , , 919 CD common JJ shares NNS in IN the DT event NN that IN the DT Convertible JJ Debentures NNS are VBP converted VVN into IN common JJ shares NNS and CC 6 CD , , 900 CD , , 000 CD common JJ shares NNS in IN the DT event NN that IN the DT warrants NNS are VBP exercised VVN . SENT In IN 2004 CD , , the DT Company NN declared VVD dividends NNS on IN its PP$ common JJ shares NNS of IN 0 CD . SENT 03 CD per IN share NN 2003 CD 0 CD . SENT 03 CD per IN share NN . SENT 2002 CD 0 CD . SENT 03 CD per IN share NN . SENT Under IN the DT terms NNS of IN the DT Company's NP amended VVD credit NN facility NN , , the DT Company's NP dividend NN payments NNS are VBP restricted VVN to TO an DT aggregate NN of IN 20 CD million CD per IN year NN . SENT b SYM Flow NP through IN share NN private JJ placements NNS In IN 2004 CD , , Agnico NP Eagle NP issued VVD 1 CD , , 000 CD , , 000 CD 2003 CD 255 CD , , 768 CD . SENT 2002 CD 40 CD , , 161 CD common JJ shares NNS under IN a DT flow NN through IN share NN private JJ placement NN for IN proceeds NNS of IN 17 CD . SENT 5 CD million CD 2003 CD 3 CD . SENT 6 CD million CD . SENT 2002 CD 0 CD . SENT 6 CD million CD net NN of IN share NN issue NN costs NNS . SENT The DT 2004 CD shares NNS were VBD issued VVN at IN a DT 33 CD premium NN to TO the DT prevailing JJ market NN price NN . SENT The DT premium NN was VBD allocated VVN to TO income NN and CC mining NN tax NN recoveries NNS as RB discussed VVN in IN the DT following VVG paragraph NN . SENT Agnico NP Eagle NP has VHZ agreed VVN to TO use VV such JJ proceeds NNS for IN the DT purpose NN of IN incurring VVG Canadian JJ exploration NN expenditures NNS in IN connection NN with IN its PP$ 2004 CD and CC 2005 CD exploration NN activities NNS . SENT In IN 2004 CD , , the DT Company NN renounced VVD to TO its PP$ investors NNS C $ 23 CD . SENT 0 CD million CD 2003 CD C NP 5 CD . SENT 3 CD million CD . SENT 2002 CD C NP 1 CD . SENT 0 CD million CD of IN such JJ expenses NNS for IN income NN tax NN purposes NNS . SENT To TO comply VV with IN the DT flow NN through IN share NN agreement NN , , the DT Company NN must MD incur VV C $ 9 CD . SENT 8 CD million CD of IN exploration NN expenditures NNS in IN 2005 CD related VVN to TO the DT expenditures NNS renounced VVD in IN 2004 CD . SENT This DT amount NN has VHZ been VBN classified VVN as IN restricted JJ cash NN on IN the DT consolidated JJ balance NN sheet NN . SENT The DT difference NN between IN the DT flow NN through IN share NN issuance NN price NN and CC the DT market NN price NN of IN Agnico NP Eagle NP stock NN at IN the DT time NN of IN purchase NN is VBZ recorded VVN as IN a DT liability NN at IN the DT time NN the DT flow NN through IN shares NNS are VBP issued VVN . SENT This DT liability NN is VBZ extinguished VVN at IN the DT time NN the DT exploration NN expenditures NNS are VBP renounced VVN to TO investors NNS . SENT The DT difference NN between IN the DT flow NN through IN share NN issuance NN price NN and CC market NN price NN reduces VVZ the DT future JJ tax NN expense NN charged VVN to TO income NN loss NN as IN this DT difference NN represents VVZ proceeds NNS received VVN by IN the DT Company NN for IN the DT sale NN of IN future JJ tax NN deductions NNS to TO investors NNS in IN the DT flow NN through IN shares NNS . SENT 90 CD c SYM Public JJ offering NN In IN 2002 CD , , Agnico NP Eagle NP issued VVD 13 CD , , 800 CD , , 000 CD units NNS , , each DT unit NN consisting VVG of IN one CD common JJ share NN and CC one CD half NN warrant NN , , at IN 13 CD . SENT 90 CD per IN unit NN for IN net JJ proceeds NNS of IN 182 CD . SENT 9 CD million CD , , after IN deducting VVG share NN issue NN costs NNS of IN 9 CD . SENT 1 CD million CD no DT related JJ income NN tax NN effect NN . SENT Of IN the DT net JJ proceeds NNS , , 167 CD . SENT 2 CD million CD was VBD allocated VVN to TO common JJ shares NNS and CC the DT remaining JJ 15 CD . SENT 7 CD million CD was VBD allocated VVN to TO the DT warrants NNS . SENT Each DT whole JJ warrant NN entitles VVZ the DT holder NN to TO purchase VV one CD common JJ share NN at IN a DT price NN of IN 19 CD . SENT 00 CD , , subject JJ to TO certain JJ adjustments NNS summarized VVD in IN the DT prospectus NN . SENT Warrants NNS are VBP exercisable JJ at IN any DT time NN prior RB to TO November NP 14 CD , , 2007 CD , , after IN which WDT time NN the DT warrants NNS will MD expire VV and CC be VB of IN no DT value NN . SENT The DT Company NN will MD inform VV warrant NN holders NNS , , through IN a DT press NN release NN , , of IN pending VVG expiry NN at IN least JJS 90 CD days NNS prior RB to TO the DT expiry NN date NN . SENT If IN all DT outstanding JJ warrants NNS are VBP exercised VVN , , the DT Company NN would MD issue VV an DT additional JJ 6 CD , , 900 CD , , 000 CD common JJ shares NNS . SENT d SYM Accumulated VVN other JJ comprehensive JJ loss NN The DT opening NN balance NN of IN the DT cumulative JJ translation NN adjustment NN in IN accumulated VVN other JJ comprehensive JJ loss NN in IN 2003 CD and CC 2004 CD of IN 15 CD . SENT 9 CD million CD resulted VVN from IN Agnico NP Eagle NP adopting VVG the DT US NP dollar NN as IN its PP$ principal JJ currency NN of IN measurement NN . SENT Prior RB to TO this DT change NN , , the DT Canadian JJ dollar NN had VHD been VBN used VVN as IN the DT reporting VVG currency NN . SENT Prior JJ periods NNS consolidated VVD financial JJ statements NNS were VBD translated VVN into IN US NP dollars NNS by IN the DT current JJ rate NN method NN using VVG the DT year NN end NN or CC the DT annual JJ average JJ exchange NN rate NN where WRB appropriate JJ . SENT This DT translation NN approach NN was VBD applied VVN from IN January NP 1 CD , , 1994 CD . SENT This DT translation NN gave VVD rise NN to TO a DT deficit NN in IN the DT cumulative JJ translation NN adjustment NN account NN within IN accumulated VVN other JJ comprehensive JJ loss NN as IN at IN December NP 31 CD , , 2004 CD and CC 2003 CD . SENT Effective JJ January NP 1 CD , , 2001 CD , , the DT Company NN prospectively RB adopted VVD the DT new JJ accounting NN recommendations NNS made VVN under IN FAS NP 133 CD and CC FAS NP 138 CD on IN accounting NN for IN derivative JJ financial JJ instruments NNS and CC hedging NN . SENT Upon IN the DT adoption NN of IN FAS NP 133 CD , , the DT Company NN recorded VVD a DT cumulative JJ translation NN adjustment NN to TO accumulated VVN other JJ comprehensive JJ loss NN of IN 2 CD . SENT 8 CD million CD . SENT The DT Company NN has VHZ designated VVN its PP$ gold JJ put NN contracts NNS and CC certain JJ foreign JJ exchange NN derivative JJ contracts NNS as IN cash NN flow NN hedges NNS and CC , , as IN such JJ , , unrealized JJ gains NNS and CC losses NNS on IN these DT contracts NNS are VBP recorded VVN in IN accumulated VVN other JJ comprehensive JJ loss NN . SENT The DT following VVG table NN presents VVZ the DT components NNS of IN accumulated VVN other JJ comprehensive JJ loss NN . SENT 2004 CD 2003 CD Cumulative JJ translation NN adjustment NN from IN adopting VVG US NP dollar NN as IN principal JJ reporting NN currency NN 15 CD , , 907 CD 15 CD , , 907 CD Unrealized JJ gain NN on IN available JJ for IN sale NN securities NNS 2 CD , , 148 CD 2 CD , , 176 CD Dilution NN gain NN on IN equity NN issuances NNS of IN subsidiary NN 7 CD , , 947 CD 6 CD , , 110 CD Unrealized JJ gain NN on IN foreign JJ exchange NN derivative JJ contracts NNS 8 CD , , 690 CD 9 CD , , 973 CD Unrealized JJ loss NN on IN gold JJ put VVN option NN contracts NNS 5 CD , , 915 CD 6 CD , , 812 CD Cumulative JJ translation NN adjustment NN on IN investment NN in IN Riddarhyttan NP 1 CD , , 937 CD Minimum NP pension NN liability NN 980 CD 1 CD , , 100 CD 5 CD , , 440 CD In IN 2004 CD , , a DT 1 CD . SENT 5 CD million CD 2003 CD 1 CD . SENT 8 CD million CD loss NN was VBD reclassified VVD from IN accumulated VVN other JJ comprehensive JJ loss NN to TO income NN to TO reflect VV the DT amortization NN of IN gold JJ put NN option NN contract NN premiums NNS for IN contracts NNS originally RB scheduled VVN to TO mature VV in IN 2004 CD . SENT Also RB in IN 2004 CD , , a DT 0 CD . SENT 6 CD million CD gain NN 2003 CD 1 CD . SENT 6 CD million CD gain NN was VBD reclassified VVD from IN accumulated VVN other JJ comprehensive JJ loss NN to TO income NN to TO reflect VV the DT realization NN of IN gains NNS on IN available JJ for IN sale NN securities NNS due JJ to TO the DT disposition NN of IN those DT securities NNS . SENT 91 CD e SYM Net JJ income NN loss NN per IN share NN The DT following VVG table NN provides VVZ the DT weighted JJ average JJ number NN of IN common JJ shares NNS used VVN in IN the DT calculation NN of IN basic JJ and CC diluted JJ income NN loss NN per IN share NN . SENT 2004 CD 2003 CD 2002 CD Weighted JJ average JJ number NN of IN common JJ shares NNS outstanding JJ basic JJ 85 CD , , 157 CD , , 476 CD 83 CD , , 889 CD , , 115 CD 70 CD , , 821 CD , , 081 RB Add VV . SENT Dilutive JJ impact NN of IN employee NN stock NN options NNS 414 CD , , 555 CD 810 CD , , 182 CD Weighted JJ average JJ number NN of IN common JJ shares NNS outstanding JJ diluted VVD 85 CD , , 572 CD , , 031 CD 83 CD , , 889 CD , , 115 CD 71 CD , , 631 CD , , 263 CD The DT calculation NN of IN diluted JJ income NN loss NN per IN share NN has VHZ been VBN computed VVN using VVG the DT treasury NN stock NN method NN . SENT In IN applying VVG the DT treasury NN stock NN method NN , , options NNS and CC warrants NNS with IN an DT exercise NN price NN greater JJR than IN the DT average JJ quoted VVN market NN price NN of IN the DT common JJ shares NNS are VBP not RB included VVN in IN the DT calculation NN of IN diluted JJ earnings NNS per IN share NN as IN the DT effect NN is VBZ anti NN dilutive JJ . SENT In IN 2004 CD , , the DT Convertible JJ Debentures NNS and CC warrants NNS were VBD anti JJ dilutive JJ and CC thus RB were VBD not RB included VVN in IN the DT calculation NN of IN diluted JJ income NN per IN share NN . SENT In IN 2003 CD , , the DT employee NN stock NN options NNS , , Convertible JJ Debentures NNS and CC warrants NNS were VBD anti JJ dilutive JJ and CC thus RB were VBD not RB included VVN in IN the DT calculation NN of IN diluted JJ loss NN per IN share NN . SENT In IN 2002 CD , , the DT Convertible JJ Debentures NNS and CC warrants NNS were VBD anti JJ dilutive JJ and CC thus RB were VBD excluded VVN from IN the DT calculation NN of IN diluted JJ income NN per IN share NN . SENT 7 CD . SENT STOCK NN BASED VVN COMPENSATION NN a DT Employee NP Stock NP Option NP Plan NP ESOP NP The NP Company's NP ESOP NP provides VVZ for IN the DT granting VVG of IN options NNS to TO directors NNS , , officers NNS , , employees NNS and CC service NN providers NNS to TO purchase VV common JJ shares NNS . SENT Under IN this DT plan NN , , options NNS are VBP granted VVN at IN the DT fair JJ market NN value NN of IN the DT underlying JJ shares NNS on IN the DT date NN of IN grant NN . SENT The DT number NN of IN shares NNS subject JJ to TO option NN for IN any DT one CD person NN may MD not RB exceed VV 5 CD of IN the DT Company's NP common JJ shares NNS issued VVN and CC outstanding JJ at IN the DT date NN of IN grant NN . SENT Up RB to TO May NP 31 CD , , 2001 CD , , the DT number NN of IN common JJ shares NNS reserved VVN for IN issuance NN under IN the DT ESOP NP was VBD 6 CD , , 000 CD , , 000 CD and CC options NNS granted VVN under IN the DT ESOP NP had VHD a DT maximum JJ term NN of IN ten CD years NNS . SENT On IN April NP 24 CD , , 2001 CD , , the DT Compensation NN Committee NP of IN the DT Board NP of IN Directors NPS adopted VVD a DT policy NN pursuant JJ to TO which WDT options NNS granted VVN after IN that DT date NN shall MD have VH a DT maximum JJ term NN of IN five CD years NNS . SENT On IN May NP 31 CD , , 2001 CD , , the DT shareholders NNS approved VVD a DT resolution NN to TO increase VV the DT number NN of IN common JJ shares NNS reserved VVN for IN issuance NN under IN the DT ESOP NP by IN 2 CD , , 000 CD , , 000 CD to TO 8 CD , , 000 CD , , 000 CD . SENT In IN 2004 CD , , the DT shareholders NNS approved VVD a DT further JJR 2 CD , , 000 CD , , 000 CD common JJ shares NNS for IN issuance NN under IN the DT ESOP NP . SENT Of IN the DT 537 CD , , 250 CD options NNS granted VVN under IN the DT ESOP NP in IN 2004 CD , , 134 CD , , 313 CD options NNS granted VVD vest NN immediately RB and CC expire VV in IN the DT year NN 2009 CD . SENT The DT remaining JJ options NNS expire VVP in IN 2009 CD and CC vest NN in IN equal JJ instalments NNS , , on IN each DT anniversary NN date NN of IN the DT grant NN , , over IN a DT three CD year NN term NN . SENT Of IN the DT 40 CD , , 000 CD options NNS granted VVN under IN the DT ESOP NP in IN 2003 CD , , 37 CD , , 000 CD options NNS granted VVD vest NN immediately RB and CC expire VV in IN the DT year NN 2008 CD . SENT The DT remaining JJ options NNS expire VVP in IN 2008 CD and CC have VH a DT vesting VVG period NN of IN three CD years NNS , , in IN which WDT 33 CD or CC 1 CD , , 000 CD vest NN immediately RB and CC are VBP exercisable JJ on IN the DT date NN of IN the DT grant NN , , while IN the DT remaining JJ 67 CD or CC 2 CD , , 000 CD options NNS are VBP exercisable JJ in IN equal JJ instalments NNS , , on IN each DT anniversary NN date NN of IN the DT grant NN , , over IN a DT three CD year NN term NN . SENT Of IN the DT 1 CD , , 358 CD , , 500 CD options NNS granted VVN in IN 2002 CD , , 1 CD , , 299 CD , , 500 CD options NNS granted VVD vest NN immediately RB and CC expire VV in IN the DT year NN 2007 CD . SENT The DT remaining JJ options NNS vest NN over IN periods NNS ranging VVG from IN two CD to TO five CD years NNS and CC expire VV between IN 2007 CD and CC 2012 CD . SENT 92 RB The DT following VVG summary NN sets NNS out IN the DT activity NN with IN respect NN to TO Agnico NP Eagle's NP outstanding JJ stock NN options NNS . SENT 2004 CD 2003 CD 2002 CD Options NPS Weighted JJ average JJ exercise NN price NN Options NNS Weighted VVN average JJ exercise NN price NN Options NNS Weighted VVN average JJ exercise NN price NN Outstanding JJ , , beginning VVG of IN year NN 2 CD , , 845 CD , , 150 CD C NP 14 CD . SENT 85 CD 3 CD , , 060 CD , , 350 CD C NP 14 CD . SENT 47 CD 3 CD , , 660 CD , , 200 CD C NP 12 CD . SENT 04 CD Granted JJ 537 CD , , 250 CD 16 CD . SENT 71 CD 40 CD , , 000 CD 18 CD . SENT 49 CD 1 CD , , 358 CD , , 500 CD 17 CD . SENT 07 CD Exercised VVD 391 CD , , 525 CD 11 CD . SENT 01 CD 229 CD , , 100 CD 10 CD . SENT 23 CD 1 CD , , 927 CD , , 500 CD 11 CD . SENT 82 CD Cancelled VVD 607 CD , , 725 CD 17 CD . SENT 76 CD 26 CD , , 100 CD 16 CD . SENT 01 CD 30 CD , , 850 CD 12 CD . SENT 06 CD Outstanding JJ , , end NN of IN year NN 2 CD , , 383 CD , , 150 CD C NP 15 CD . SENT 16 CD 2 CD , , 845 CD , , 150 CD C NP 14 CD . SENT 85 CD 3 CD , , 060 CD , , 350 CD C NP 14 CD . SENT 47 CD Options NNS exercisable JJ at IN end NN of IN year NN 1 CD , , 983 CD , , 963 CD 2 CD , , 697 CD , , 950 CD 2 CD , , 682 CD , , 500 CD The DT weighted JJ average JJ grant NN date NN fair JJ value NN of IN options NNS granted VVN in IN 2004 CD was VBD C $ 4 CD . SENT 35 CD . SENT The DT following VVG table NN summarizes VVZ information NN about IN Agnico NP Eagle's NP stock NN options NNS outstanding JJ at IN December NP 31 CD , , 2004 CD . SENT Options NNS outstanding JJ Options NP exercisable JJ Weighted JJ average NN remaining VVG contractual JJ life NN Range NP of IN exercise NN prices NNS Number NP outstanding JJ Weighted JJ average JJ exercise NN price NN Number NP exercisable JJ Weighted JJ average JJ exercise NN price NN C NP 6 CD . SENT 55 CD C NP 9 CD . SENT 20 CD 136 CD , , 650 CD 3 CD . SENT 8 CD years NNS C NP 8 CD . SENT 10 CD 136 CD , , 650 CD C NP 8 CD . SENT 10 CD C NP 10 CD . SENT 20 CD C NP 15 CD . SENT 43 CD 594 CD , , 100 CD 4 CD . SENT 9 CD years NNS C NP 10 CD . SENT 63 CD 594 CD , , 100 CD C NP 10 CD . SENT 63 CD C NP 15 CD . SENT 93 CD C NP 19 CD . SENT 94 CD 1 CD , , 396 CD , , 900 CD 2 CD . SENT 8 CD years NNS C NP 16 CD . SENT 40 CD 997 CD , , 713 CD C NP 16 CD . SENT 28 CD C NP 21 CD . SENT 72 CD C NP 25 CD . SENT 60 CD 255 CD , , 500 CD 2 CD . SENT 2 CD years NNS C NP 22 CD . SENT 66 CD 255 CD , , 500 CD C NP 22 CD . SENT 66 CD C NP 6 CD . SENT 55 CD C NP 25 CD . SENT 60 CD 2 CD , , 383 CD , , 150 CD 3 CD . SENT 3 CD years NNS C NP 15 CD . SENT 16 CD 1 CD , , 983 CD , , 963 CD C NP 14 CD . SENT 84 CD The DT Company NN has VHZ reserved VVN for IN issuance NN 2 CD , , 383 CD , , 150 CD common JJ shares NNS in IN the DT event NN that IN these DT options NNS are VBP exercised VVN . SENT The DT number NN of IN un NP optioned VVN shares NNS available JJ for IN granting VVG of IN options NNS as IN at IN December NP 31 CD , , 2004 CD , , 2003 CD and CC 2002 CD was VBD 2 CD , , 846 CD , , 485 CD , , 776 CD , , 010 CD and CC 789 CD , , 910 CD , , respectively RB . SENT In IN 2003 CD , , the DT Company NN prospectively RB adopted VVN FAS NP 123 CD , , Accounting NP for IN Stock NP Based VVN Compensation NN as IN amended VVN by IN FAS NP 148 CD , , Accounting NP for IN Stock NP Based VVN Compensation NN Transition NN and CC Disclosure NN . SENT These DT accounting NN standards NNS recommend VVP the DT expensing VVG of IN stock NN options NNS granted VVN after IN January NP 1 CD , , 2003 CD . SENT The DT standards NNS recommend VVP that IN the DT fair JJ value NN of IN stock NN options NNS be VB recognized VVN in IN income NN over IN the DT applicable JJ vesting VVG period NN as IN a DT compensation NN expense NN . SENT Prior RB to TO 2003 CD , , the DT Company NN accounted VVD for IN its PP$ stock NN option NN grants NNS based VVN on IN the DT recognition NN and CC measurement NN principles NNS of IN Accounting NP Principles NNS Board NP Opinion NP No NP . SENT 25 CD and CC related VVN interpretations NNS . SENT The DT application NN of IN Opinion NP No NP . SENT 25 CD resulted VVN in IN no DT compensation NN expense NN being VBG recorded VVN in IN Agnico NP Eagle's NP circumstances NNS as IN all DT options NNS granted VVD had VHD an DT exercise NN price NN equal JJ to TO the DT market NN value NN of IN the DT underlying JJ stock NN on IN the DT date NN of IN grant NN . SENT The DT following VVG table NN illustrates VVZ the DT effect NN on IN net JJ income NN loss NN and CC net JJ income NN loss NN per IN share NN for IN 2003 CD and CC 2002 CD as RB if IN the DT Company NN had VHD applied VVN the DT fair JJ value NN recognition NN provisions NNS of IN 93 CD FAS NP 123 CD to TO account VV for IN all PDT its PP$ stock NN option NN grants NNS . SENT The DT 2003 JJ pro FW forma FW compensation NN expense NN includes VVZ option NN grants NNS made VVD prior RB to TO the DT adoption NN of IN FAS NP 123 CD FAS NP 148 CD which WDT vest NN in IN 2003 CD . SENT 2003 CD 2002 CD Net JJ income NN loss NN for IN the DT year NN , , as RB reported VVD 19 CD , , 498 CD 4 CD , , 023 RB Add VV . SENT Stock NN based VVN employee NN compensation NN included VVD in IN reported VVN net JJ income NN loss NN 95 RB Deduct VV . SENT Total JJ stock NN based VVN employee NN compensation NN determined VVN under IN fair JJ value NN based VVN method NN for IN all DT awards NNS 263 CD 2 CD , , 621 CD Pro NP forma FW net JJ income NN loss NN 19 CD , , 666 CD 1 CD , , 402 CD Net JJ income NN loss NN per IN share NN . SENT Basic JJ and CC diluted JJ , , as RB reported VVD 0 CD . SENT 23 CD 0 CD . SENT 06 CD Basic JJ and CC diluted JJ , , pro FW forma FW 0 CD . SENT 23 CD 0 CD . SENT 02 CD Pro NP forma FW disclosures NNS have VHP not RB been VBN included VVN for IN 2004 CD as IN substantially RB all DT options NNS prior RB to TO the DT adoption NN of IN fair JJ value NN accounting NN had VHD vested VVN at IN the DT end NN of IN 2003 CD . SENT Agnico NP Eagle NP estimated VVD the DT fair JJ value NN of IN options NNS under IN the DT Black NP Scholes NP option NN pricing NN model NN and CC the DT following VVG weighted JJ average JJ assumptions NNS . SENT 2004 CD 2003 CD 2002 CD Risk NN free JJ interest NN rate NN 3 CD . SENT 0 CD 2 CD . SENT 9 CD 2 CD . SENT 6 CD Expected VVN life NN of IN options NNS in IN years NNS 2 CD . SENT 5 CD 2 CD . SENT 5 CD 2 CD . SENT 1 LS Expected VVN volatility NN of IN Agnico NP Eagle's NP share NN price NN 38 CD . SENT 5 CD 43 CD . SENT 5 CD 36 CD . SENT 9 CD Expected VVN dividend NN yield NN 0 CD . SENT 24 CD 0 CD . SENT 25 CD 0 CD . SENT 19 RB The DT total JJ compensation NN cost NN for IN the DT ESOP NP recognized VVD in IN the DT consolidated JJ statement NN of IN income NN loss NN for IN the DT current JJ year NN was VBD 0 CD . SENT 5 CD million CD . SENT b SYM Incentive NN Share NN Purchase NP Plan NP On IN June NP 26 CD , , 1997 CD , , the DT shareholders NNS approved VVD an DT Incentive NN Share NN Purchase NP Plan NP the DT Purchase NP Plan NP to TO encourage VV directors NNS , , officers NNS and CC employees NNS Participants NNS to TO purchase VV Agnico NP Eagle's NP common JJ shares NNS at IN market NN values NNS . SENT Under IN the DT Purchase NP Plan NP , , eligible JJ employees NNS may MD contribute VV up RB to TO 10 CD of IN their PP$ basic JJ annual JJ salaries NNS and CC directors NNS may MD contribute VV up RB to TO 100 CD of IN their PP$ annual JJ board NN and CC committee NN retainer NN fees NNS . SENT For IN both DT employees NNS and CC directors NNS , , Agnico NP Eagle NP contributes VVZ an DT amount NN equal JJ to TO 50 CD of IN each DT Participant's NP contribution NN . SENT In IN 2004 CD , , 198 CD , , 387 CD common JJ shares NNS were VBD issued VVN under IN the DT Purchase NP Plan NP 2003 CD 217 CD , , 855 CD . SENT 2002 CD 138 CD , , 747 CD for IN proceeds NNS of IN 2 CD . SENT 8 CD million CD 2003 CD 2 CD . SENT 6 CD million CD . SENT 2002 CD 2 CD . SENT 1 CD million CD . SENT In IN June NP 2002 CD , , shareholders NNS approved VVD an DT increase NN in IN the DT maximum JJ amount NN of IN shares NNS reserved VVN for IN issuance NN under IN the DT Purchase NP Plan NP to TO 2 CD , , 500 CD , , 000 CD from IN 1 CD , , 000 CD , , 000 CD . SENT Agnico NP Eagle NP has VHZ reserved VVN for IN issuance NN 1 CD , , 151 CD , , 272 CD common JJ shares NNS 2003 CD 1 CD , , 349 CD , , 659 CD . SENT 2002 CD 1 CD , , 567 CD , , 514 CD under IN the DT Purchase NP Plan NP . SENT 94 CD 8 CD . SENT FUTURE JJ INCOME NN AND CC MINING NN TAXES NNS Income NN and CC mining NN taxes NNS recovery NN is VBZ made VVN up RP of IN the DT following VVG components NNS . SENT 2004 CD 2003 CD 2002 CD Current JJ provision NN Provincial JJ mining NN duties NNS 5 CD , , 233 CD 2 CD , , 538 CD 2 CD , , 779 CD Future JJ provision NN Federal NP income NN taxes NNS 13 CD , , 950 CD 18 CD , , 870 CD Provincial JJ income NN taxes NNS Provincial JJ mining NN duties NNS 16 CD , , 288 CD 19 CD , , 960 CD 2 CD , , 418 CD 2 CD , , 338 CD 1 CD , , 090 CD 2 CD , , 418 CD 2 CD , , 895 CD 1 CD , , 448 CD 361 CD Mining NP taxes NNS are VBP assessed VVN at IN the DT rate NN of IN 12 CD on IN income NN from IN mining NN operations NNS . SENT Income NN from IN mining NN operations NNS is VBZ calculated VVN as IN revenue NN from IN mined VVN metals NNS less CC production NN costs NNS directly RB attributable JJ to TO mining NN . SENT Income NN from IN mining NN operations NNS is VBZ reduced VVN by IN depreciation NN allowances NNS on IN mine NN construction NN and CC development NN as RB well RB as IN certain JJ exploration NN costs NNS . SENT The DT mining NN taxes NNS are VBP paid VVN to TO the DT government NN agency NN which WDT grants VVZ the DT mining NN lease NN and CC or CC mining NN concession NN required VVN in IN order NN to TO extract VV ore NN in IN the DT particular JJ jurisdiction NN . SENT Cash NN income NN and CC mining NN taxes NNS recovered VVD in IN 2004 CD was VBD 0 CD . SENT 2 CD million CD 2003 CD 0 CD . SENT 6 CD million CD . SENT 2002 CD 0 CD . SENT 8 CD million CD . SENT Future JJ income NN and CC mining NN taxes NNS expense NN recovery NN has VHZ been VBN provided VVN on IN temporary JJ differences NNS which WDT consist VVP of IN the DT following NN . SENT 2004 CD 2003 CD 2002 CD Amortization NN 4 CD , , 855 CD 11 CD 587 CD Exploration NN and CC development NN 2 CD , , 789 CD 2 CD , , 910 CD 3 CD , , 152 CD Premium NN on IN flow NN through IN shares NNS 4 CD , , 373 CD Other JJ 933 CD 1 CD , , 809 CD 147 CD 2 CD , , 338 CD 1 CD , , 090 CD 2 CD , , 418 CD 95 CD The DT income NN and CC mining NN taxes NNS expense NN recovery NN is VBZ different JJ from IN the DT amount NN that WDT would MD have VH been VBN computed VVN by IN applying VVG the DT Canadian JJ statutory JJ income NN tax NN rate NN as IN a DT result NN of IN the DT following NN . SENT 2004 CD 2003 CD 2002 CD Combined JJ federal JJ and CC composite JJ provincial JJ tax NN rates NNS 36 CD . SENT 9 CD 38 CD . SENT 3 CD 39 CD . SENT 9 CD Increase VV decrease NN in IN taxes NNS resulting VVG from IN . SENT Provincial JJ mining NN duties NNS 23 CD . SENT 7 CD 20 CD . SENT 1 CD 7 CD . SENT 8 CD Resource NP allowances NNS 12 CD . SENT 1 CD 8 CD . SENT 4 CD 101 CD . SENT 7 CD Permanent JJ and CC other JJ differences NNS 7 CD . SENT 0 CD 14 CD . SENT 0 CD 6 CD . SENT 5 CD Utilization NN of IN temporary JJ differences NNS for IN which WDT no DT benefit NN was VBD previously RB recognized VVN 11 CD . SENT 6 CD 20 CD . SENT 5 CD 78 CD . SENT 7 CD Utilization NN of IN losses NNS for IN which WDT no DT benefit NN was VBD previously RB recognized VVN 36 CD . SENT 2 CD 22 CD . SENT 7 CD 23 CD . SENT 4 CD Effect NN of IN changes NNS in IN Canadian JJ income NN tax NN legislation NN 38 CD . SENT 6 CD Actual JJ rate NN as IN a DT percentage NN of IN pre NP tax NN income NN loss NN 6 CD . SENT 3 CD 8 CD . SENT 0 CD 7 CD . SENT 8 CD Agnico NP Eagle NP has VHZ non JJ capital NN tax NN loss NN carryforwards RB of IN approximately RB C $ 22 CD million CD which WDT may MD be VB carried VVN forward RB to TO reduce VV future JJ years NNS taxable JJ income NN . SENT These DT losses NNS expire VVP in IN 2010 CD . SENT Agnico NP Eagle NP has VHZ approximately RB C $ 395 CD million CD of IN cumulative JJ Canadian JJ exploration NN and CC development NN expenses NNS and CC C $ 384 CD million CD of IN unamortized JJ capital NN pools NNS available JJ indefinitely RB to TO reduce VV future JJ years NNS taxable JJ income NN . SENT As RB at IN December NP 31 CD , , 2004 CD and CC 2003 CD , , Agnico NP Eagle's NP future JJ income NN and CC mining NN tax NN assets NNS and CC liabilities NNS are VBP as RB follows VVZ . SENT 2004 CD 2003 CD Assets NNS Liabilities NNS Assets NNS Liabilities NNS Non JJ current NN . SENT Income NN taxes NNS . SENT Plant NN and CC equipment NN 19 CD , , 925 CD 14 CD , , 655 CD Mine NP development NN costs NNS 20 CD , , 934 CD 19 CD , , 746 CD Net JJ operating NN and CC capital NN loss NN carryforwards RB 15 CD , , 733 CD 26 CD , , 022 CD Mining NP duties NNS 10 CD , , 502 CD 6 CD , , 992 CD Other JJ 1 CD , , 997 CD 3 CD , , 542 CD Valuation NN allowance NN 17 CD , , 684 CD 29 CD , , 378 CD Total JJ non JJ current JJ 51 CD , , 407 CD 41 CD , , 579 CD Mining NP duties NNS . SENT Plant NN and CC equipment NN 472 CD 30 CD , , 110 CD 440 CD 18 CD , , 192 CD Mine NP development NN costs VVZ 370 CD 27 CD , , 806 CD 344 CD 23 CD , , 548 CD Other JJ 780 CD 892 CD Valuation NN allowance NN 842 CD 784 CD Total JJ non JJ current JJ 57 CD , , 136 CD 40 CD , , 848 CD Non JJ current JJ future JJ income NN and CC mining NN tax NN assets NNS and CC liabilities NNS 51 CD , , 407 CD 57 CD , , 136 CD 41 CD , , 579 CD 40 CD , , 848 CD 96 CD All DT of IN Agnico NP Eagle's NP future JJ income NN tax NN assets NNS and CC liabilities NNS are VBP denominated VVN in IN local JJ currency NN based VVN on IN the DT jurisdiction NN in IN which WDT the DT Company NN pays VVZ taxes NNS and CC are VBP translated VVN into IN US NP dollars NNS using VVG the DT exchange NN rate NN in IN effect NN at IN the DT consolidated JJ balance NN sheet NN date NN . SENT The DT increase NN in IN the DT gross JJ amounts NNS of IN the DT future JJ tax NN assets NNS and CC liabilities NNS was VBD impacted VVN by IN the DT weaker JJR US NP dollar NN in IN relation NN to TO the DT Canadian JJ dollar NN throughout IN 2004 CD . SENT At IN December NP 31 CD , , 2004 CD , , asset NN and CC liability NN amounts NNS were VBD translated VVN into IN US NP dollars NNS at IN an DT exchange NN rate NN of IN 1 CD . SENT 20 CD whereas IN at IN December NP 31 CD , , 2003 CD , , asset NN and CC liability NN amounts NNS were VBD translated VVN at IN an DT exchange NN rate NN of IN 1 CD . SENT 29 CD . SENT The DT additional JJ increase NN in IN future JJ tax NN assets NNS and CC liabilities NNS was VBD due JJ to TO increases NNS in IN capital NN pools NNS resulting VVG from IN the DT LaRonde NP Mine NP capital NN expenditures NNS and CC increased JJ future JJ tax NN assets NNS relating VVG to TO increased JJ future JJ mining NN duty NN liabilities NNS . SENT At IN January NP 1 CD , , 2004 CD , , the DT valuation NN allowance NN , , a DT reserve NN against IN future JJ income NN tax NN assets NNS recorded VVN in IN the DT accounts NNS , , was VBD 29 CD . SENT 4 CD million CD . SENT In IN 2004 CD , , the DT valuation NN allowance NN decreased VVD by IN 11 CD . SENT 7 CD million CD due JJ to TO the DT impact NN of IN a DT weaker JJR US NP dollar NN and CC the DT utilization NN of IN capital NN and CC net JJ operating VVG loss NN carryforwards RB which WDT were VBD previously RB unrecognized JJ . SENT In IN 2003 CD , , tax NN legislation NN changes NNS gave VVD rise NN to TO additional JJ future JJ income NN tax NN assets NNS . SENT As IN provincial JJ mining NN duties NNS are VBP now RB deductible JJ in IN computing VVG Canadian JJ federal JJ income NN taxes NNS payable JJ , , the DT Company NN has VHZ recorded VVN an DT asset NN representing VVG the DT future JJ deductions NNS that WDT will MD be VB available JJ at IN the DT federal JJ level NN arising VVG from IN the DT payment NN of IN provincial JJ mining NN duties NNS . SENT As IN this DT mining NN duty NN tax NN asset NN is VBZ long JJ term NN in IN nature NN and CC does VVZ not RB have VH a DT set VVN expiry NN date NN , , the DT Company NN has VHZ not RB provided VVN a DT valuation NN allowance NN against IN this DT future JJ tax NN asset NN . SENT The DT Company NN paid VVD no DT cash NN income NN or CC mining NN taxes NNS in IN the DT year NN ended VVN December NP 31 CD , , 2004 CD . SENT 9 CD . SENT FINANCIAL JJ INSTRUMENTS NNS Agnico NP Eagle NP enters VVZ into IN financial JJ instruments NNS with IN a DT number NN of IN financial JJ institutions NNS in IN order NN to TO hedge VV underlying JJ revenue NN , , cost NN and CC fair JJ value NN exposures NNS arising VVG from IN commodity NN prices NNS , , interest NN rates NNS and CC foreign JJ currency NN exchange NN rates NNS . SENT Financial JJ instruments NNS which WDT subject JJ Agnico NP Eagle NP to TO market VV risk NN and CC concentration NN of IN credit NN risk NN consist VVP primarily RB of IN cash NN and CC short JJ term NN investments NNS and CC derivative JJ contracts NNS for IN currencies NNS , , interest NN rates NNS and CC precious JJ and CC base JJ metals NNS . SENT Agnico NP Eagle NP places VVZ its PP$ cash NN and CC cash NN equivalents NNS and CC short JJ term NN investments NNS in IN high JJ quality NN securities NNS issued VVN by IN government NN agencies NNS , , financial JJ institutions NNS and CC major JJ corporations NNS and CC limits VVZ the DT amount NN of IN credit NN exposure NN by IN diversifying VVG its PP$ holdings NNS . SENT Agnico NP Eagle's NP risk NN management NN policy NN attempts VVZ to TO mitigate VV the DT risks NNS associated VVN with IN fluctuating VVG metal NN prices NNS and CC foreign JJ exchange NN rates NNS . SENT Agnico NP Eagle NP uses VVZ over IN the DT counter JJ put NN and CC call VV option NN metals NNS and CC foreign JJ exchange NN contracts NNS to TO hedge VV its PP$ net JJ revenues NNS from IN mining NN operations NNS and CC costs NNS of IN production NN , , respectively RB . SENT These DT instruments NNS are VBP straightforward JJ contracts NNS and CC involve VV little JJ complexity NN . SENT Agnico NP Eagle NP is VBZ exposed VVN to TO credit NN risk NN in IN the DT event NN of IN non JJ performance NN by IN counterparties NNS in IN connection NN with IN its PP$ currency NN and CC metal NN option NN contracts NNS . SENT Agnico NP Eagle NP does VVZ not RB obtain VV any DT security NN to TO support VV financial JJ instruments NNS subject JJ to TO credit NN risk NN , , but CC mitigates VVZ the DT risk NN by IN dealing VVG with IN a DT diverse JJ group NN of IN creditworthy JJ counterparties NNS and CC , , accordingly RB , , does VVZ not RB anticipate VV loss NN for IN non JJ performance NN . SENT The DT Company NN continually RB monitors VVZ the DT market NN risk NN of IN its PP$ hedging NN activities NNS . SENT Gold NN put VVD option NN contracts NNS Agnico NP Eagle's NP portfolio NN of IN gold JJ put VVN option NN contracts NNS was VBD entered VVN into IN to TO establish VV a DT minimum JJ price NN which WDT the DT Company NN will MD receive VV from IN the DT sale NN of IN its PP$ gold JJ production NN . SENT The DT contracts NNS expire VVP monthly RB based VVN on IN planned JJ production NN volumes NNS . SENT These DT instruments NNS have VHP been VBN designated VVN as IN hedges NNS under IN the DT criteria NNS established VVN by IN FAS NP 133 CD and CC FAS NP 138 CD on IN accounting NN for IN derivative JJ financial JJ instruments NNS and CC hedging NN . SENT At IN December NP 31 CD , , 2001 CD , , these DT option NN contracts NNS did VVD not RB qualify VV as IN a DT designated VVN hedge NN under IN FAS NP 133 CD . SENT Accordingly RB , , changes NNS in IN fair JJ value NN were VBD recognized VVN as IN part NN of IN the DT Company's NP net JJ loss NN . SENT On IN January NP 1 CD , , 2002 CD , , the DT Company NN implemented VVD a DT new JJ 97 CD treasury NN management NN system NN that WDT complies VVZ with IN the DT new JJ documentation NN requirements NNS of IN FAS NP 133 CD . SENT As IN a DT result NN , , these DT option NN contracts NNS now RB qualify VVP for IN hedge JJ accounting NN . SENT In IN 2004 CD , , 2003 CD and CC 2002 CD , , changes NNS in IN the DT fair JJ value NN of IN these DT option NN contracts NNS were VBD recognized VVN as IN part NN of IN other JJ comprehensive JJ income NN loss NN . SENT Gains NNS and CC losses NNS on IN gold JJ put VVN option NN contracts NNS are VBP reclassified VVD from IN accumulated VVN other JJ comprehensive JJ loss NN to TO income NN in IN the DT same JJ period NN the DT forecasted VVN transaction NN affects VVZ income NN . SENT In IN 2005 CD , , the DT Company NN expects VVZ to TO reclassify VV an DT unrealized JJ loss NN of IN 2 CD . SENT 3 CD million CD relating VVG to TO its PP$ gold NN put VVD option NN contracts NNS to TO income NN . SENT Due JJ to TO the DT nature NN and CC structure NN of IN the DT Company's NP gold NN put VVD option NN contracts NNS , , the DT Company NN does VVZ not RB record VV amounts NNS for IN ineffectiveness NN in IN income NN . SENT Silver NN and CC base NN metal NN option NN contracts NNS Agnico NP Eagle's NP silver NN and CC base NN metal NN derivatives NNS portfolio NN was VBD unwound VVN during IN 2003 CD at IN a DT net JJ cost NN of IN nil NN . SENT As RB at IN December NP 31 CD , , 2004 CD , , Agnico NP Eagle's NP derivative JJ financial JJ instruments NNS relating VVG to TO metals NNS consisted VVN of IN the DT following NN . SENT Expected VVN Maturity NN 2005 CD 2006 CD 2007 CD Gold NP Put NN options NNS purchased VVD Amount NN hedged VVD ounces NNS 190 CD , , 020 CD 152 CD , , 340 CD 131 CD , , 280 CD Average JJ price NN ounce NN 260 CD 260 CD 260 CD Subsequent JJ to TO year NN end NN , , the DT Company NN purchased VVD silver NN put VVD options NNS with IN a DT strike NN price NN of IN 7 CD . SENT 00 CD and CC also RB sold VVN copper NN calls NNS with IN a DT strike NN price NN of IN 1 CD . SENT 50 CD . SENT The DT Company NN sold VVD forward RB zinc NN production NN at IN a DT weighted JJ average JJ price NN of IN 0 CD . SENT 565 CD and CC entered VVD into IN a DT zero CD cost NN collar NN to TO set VV a DT minimum JJ zinc NN price NN of IN 0 CD . SENT 55 CD . SENT While IN setting VVG a DT minimum JJ price NN , , the DT zero CD cost NN collar NN strategy NN also RB limits VVZ participation NN to TO zinc NN prices NNS above IN 0 CD . SENT 67 CD . SENT The DT Company NN also RB liquidated VVN its PP$ entire JJ portfolio NN of IN gold JJ put NN options NNS . SENT 98 CD As IN at IN March NP 16 CD , , 2005 CD , , Agnico NP Eagle NP had VHD the DT following VVG byproduct NN metal NN contracts NNS . SENT Expected VVN Maturity NN 2005 CD 2006 CD Silver NN Put NN options NNS purchased VVD Ounces NNS 835 CD , , 000 CD 167 CD , , 000 CD Average JJ price NN ounce NN 7 CD . SENT 00 CD 7 CD . SENT 00 CD Copper NN Call NN options NNS sold VVN Pounds NP 000 CD s NN 8 CD , , 267 CD 1 CD , , 653 CD Average JJ price NN pound NN 1 CD . SENT 50 CD 1 CD . SENT 50 CD Zinc NN Forwards RB Pounds NP 000 CD s NN 24 CD , , 251 CD 26 CD , , 455 CD Average JJ price NN pound NN 0 CD . SENT 57 CD 0 CD . SENT 56 CD Put NN options NNS purchased VVN Pounds NP 000 CD s NN 22 CD , , 046 CD 26 CD , , 455 CD Average JJ price NN pound NN 0 CD . SENT 55 CD 0 CD . SENT 55 CD Call NN options NNS sold VVN Pounds NP 000 CD s NN 22 CD , , 046 CD 26 CD , , 455 CD Average JJ price NN pound NN 0 CD . SENT 67 CD 0 CD . SENT 67 CD Foreign JJ currency NN hedging NN program NN Agnico NP Eagle NP generates VVZ almost RB all RB of IN its PP$ revenues NNS in IN US NP dollars NNS . SENT The DT Company's NP LaRonde NP Mine NP and CC Exploration NP Division NP both CC have VH Canadian JJ dollar NN requirements NNS for IN capital NN and CC operating NN expenditures NNS . SENT Agnico NP Eagle NP entered VVD into IN a DT series NN of IN put NN and CC call VV option NN contracts NNS to TO hedge VV a DT monthly JJ sum NN of IN Canadian JJ dollar NN expenditures NNS based VVN on IN forecasted VVN Canadian JJ dollar NN requirements NNS . SENT In IN 2005 CD , , the DT Company NN expects VVZ to TO reclassify VV an DT unrealized JJ gain NN of IN 2 CD . SENT 9 CD million CD relating VVG to TO its PP$ foreign JJ exchange NN derivative JJ contracts NNS to TO income NN . SENT Due JJ to TO the DT nature NN and CC structure NN of IN the DT Company's NP foreign JJ currency NN hedge NN contracts NNS , , the DT Company NN does VVZ not RB record VV amounts NNS for IN ineffectiveness NN in IN income NN . SENT The DT Company's NP written JJ put NN options NNS do VVP not RB qualify VV for IN hedge JJ accounting NN and CC thus RB have VHP not RB been VBN designated VVN as IN hedging VVG instruments NNS . SENT As IN such JJ , , changes NNS in IN fair JJ value NN for IN these DT instruments NNS are VBP recorded VVN in IN net JJ income NN loss NN . SENT These DT instruments NNS were VBD entered VVN into IN to TO set VV a DT range NN for IN the DT US NP dollar NN , , along RB with IN the DT zero CD cost NN collar NN of IN purchased VVN puts NNS and CC written JJ calls NNS . SENT 99 CD At IN December NP 31 CD , , 2004 CD , , Agnico NP Eagle's NP foreign JJ currency NN hedging NN program NN consisted VVD of IN the DT following NN . SENT Expected VVN Maturity NN 2005 CD 2006 CD US NP call NN options NNS sold VVD Amount NN thousands NNS 12 CD , , 000 CD 12 CD , , 000 CD C NP US NP weighted JJ average NN exchange NN rate NN 1 CD . SENT 6050 CD 1 CD . SENT 6475 CD US NP put NN options NNS purchased VVD Amount NN thousands NNS 12 CD , , 000 CD 12 CD , , 000 CD C NP US NP weighted JJ average NN exchange NN rate NN 1 CD . SENT 5000 CD 1 CD . SENT 5600 CD US NP put NN options NNS sold VVD Amount NN thousands NNS 12 CD , , 000 CD C NP US NP weighted JJ average NN exchange NN rate NN 1 CD . SENT 3700 CD At IN December NP 31 CD , , 2004 CD , , the DT aggregate JJ unrealized JJ loss NN of IN the DT net JJ market NN value NN of IN Agnico NP Eagle's NP metals NNS derivative JJ position NN amounted VVD to TO 5 CD . SENT 9 CD million CD 2003 CD 6 CD . SENT 8 CD million CD . SENT The DT Company's NP unrealized JJ gain NN on IN its PP$ foreign JJ exchange NN hedge NN position NN at IN December NP 31 CD , , 2004 CD was VBD 8 CD . SENT 7 CD million CD 2003 CD 10 CD . SENT 0 CD million CD . SENT Since IN the DT Company NN uses VVZ only RB over IN the DT counter JJ instruments NNS , , the DT fair JJ value NN of IN individual JJ hedging NN instruments NNS is VBZ based VVN on IN readily RB available JJ market NN values NNS . SENT The DT following VVG table NN shows VVZ the DT changes NNS in IN the DT fair JJ values NNS of IN derivative JJ instruments NNS recorded VVN in IN the DT consolidated JJ financial JJ statements NNS . SENT The DT fair JJ values NNS of IN recorded JJ derivative JJ related JJ assets NNS and CC liabilities NNS reflect VVP the DT netting VVG of IN the DT fair JJ values NNS of IN individual JJ derivative JJ financial JJ instruments NNS . SENT Other JJ required JJ derivative JJ disclosures NNS can MD be VB found VVN in IN note NN 6 CD d SYM , , Accumulated VVN other JJ comprehensive JJ loss NN and CC information NN regarding VVG our PP$ interest NN rate NN derivatives NNS can MD be VB found VVN in IN note NN 4 CD a DT , , Convertible JJ subordinated JJ debentures NNS . SENT Interest NP Rate NP Metals NP Foreign NP Exchange NP 2004 CD 2003 CD 2004 JJ 2003 CD 2004 CD 2003 CD Fair NP value NN , , beginning VVG of IN year NN 669 CD 26 CD 6 CD , , 904 CD 3 CD , , 477 CD Instruments NNS entered VVN into IN or CC settled VVD 1 CD , , 876 CD 1 CD , , 861 CD 4 CD , , 508 CD 2 CD , , 807 CD Changes NP in IN fair JJ value NN 639 CD 1 CD , , 166 CD 2 CD , , 139 CD 7 CD , , 574 CD Fair NP value NN , , end NN of IN year NN 1 CD , , 876 CD 30 CD 669 CD 4 CD , , 535 CD 6 CD , , 904 CD Agnico NP Eagle's NP exposure NN to TO interest NN rate NN risk NN at IN December NP 31 CD , , 2004 CD relates VVZ to TO its PP$ short JJ term NN investments NNS and CC cash NN equivalents NNS of IN 104 CD . SENT 9 CD million CD 2003 CD 106 CD . SENT 6 CD million CD and CC its PP$ interest NN rate NN swap NN . SENT Interest NN rate NN swap NN exposure NN is VBZ limited VVN through IN the DT use NN of IN an DT interest NN rate NN cap NN . SENT The DT Company's NP short JJ term NN investments NNS and CC cash NN equivalents NNS have VHP a DT fixed JJ weighted JJ average JJ interest NN rate NN of IN 1 CD . SENT 81 CD 2003 CD 0 CD . SENT 90 CD for IN a DT period NN of IN 19 CD days NNS 2003 CD 17 CD days NNS . SENT Agnico NP Eagle NP is VBZ also RB exposed VVN to TO interest NN rate NN risk NN through IN its PP$ interest NN rate NN swap NN whereby WRB the DT Company NN swapped VVN its PP$ fixed JJ rate NN payments NNS on IN the DT convertible JJ subordinated JJ debentures NNS for IN variable JJ rate NN payments NNS . SENT The DT exposure NN to TO interest NN rate NN risk NN under IN the DT terms NNS of IN the DT Company's NP interest NN rate NN swap NN is VBZ limited VVN as IN the DT Company NN has VHZ also RB entered VVN into IN an DT interest NN rate NN cap NN such JJ that IN the DT three CD month NN LIBOR NP rate NN will MD not RB exceed VV 5 CD . SENT 75 CD . SENT In IN addition NN , , Agnico NP Eagle NP has VHZ outstanding JJ letters NNS of IN credit NN amounting VVG to TO C NP 13 CD . SENT 4 CD million CD relating VVG to TO the DT Executives NNS Plan NN and CC reclamation NN obligations NNS 2003 CD C NP 11 CD . SENT 8 CD million CD for IN which WDT fees NNS were VBD 2 CD . SENT 25 CD per IN annum NN . SENT 100 CD The NP fair JJ values NNS of IN Agnico NP Eagle's NP current JJ financial JJ assets NNS and CC liabilities NNS approximate JJ their PP$ carrying VVG values NNS as IN at IN December NP 31 CD , , 2004 CD . SENT The DT fair JJ value NN of IN Agnico NP Eagle's NP Convertible JJ Debentures NNS as IN at IN December NP 31 CD , , 2004 CD is VBZ 163 CD . SENT 2 CD million CD 2003 CD 152 CD . SENT 4 CD million CD . SENT 10 CD . SENT ACQUISITIONS NNS In IN the DT third JJ quarter NN of IN 2003 CD , , the DT Company NN purchased VVN from IN Barrick NP Gold NP Corporation NP Barrick NP a DT 100 CD interest NN in IN Barrick's NP Bousquet NP property NN , , immediately RB to TO the DT west NN and CC south NN of IN Agnico NP Eagle's NP 100 CD owned VVD LaRonde NP Mine NP in IN northwestern JJ Quebec NP . SENT Agnico NP Eagle NP also RB acquired VVD used VVN machinery NN and CC equipment NN from IN the DT now RB closed VVN Bousquet NP Mines NP including VVG underground JJ rolling JJ stock NN and CC the DT headframe NN at IN Bousquet NP 2 CD . SENT In IN addition NN to TO the DT Bousquet NP Mine NP assets NNS , , Agnico NP Eagle NP purchased VVD certain JJ of IN Barrick's NP regional JJ exploration NN properties NNS . SENT The DT primary JJ reason NN for IN the DT acquisition NN was VBD to TO enhance VV the DT Company's NP regional JJ development NN . SENT With IN this DT acquisition NN , , the DT Company NN now RB controls VVZ 100 CD of IN over IN 14 CD miles NNS of IN contiguous JJ favorable JJ geology NN along IN the DT prolific JJ Cadillac NP Bousquet NP Gold NP Belt NP which WDT hosts VVZ the DT Company's NP 100 CD owned VVD LaRonde NP Mine NP . SENT With IN this DT transaction NN , , the DT Company NN also RB has VHZ the DT dominant JJ land NN position NN on IN the DT Cadillac NP Larder NN Lake NP Break NN immediately RB to TO the DT south NN which WDT hosts VVZ the DT Company's NP 100 CD owned VVD Lapa NP property NN . SENT The DT Company's NP consolidated JJ financial JJ statements NNS do VVP not RB include VVP pro FW forma FW results NNS of IN operations NNS from IN this DT acquisition NN as IN there EX are VBP currently RB no DT mining NN activities NNS on IN any DT of IN the DT acquired VVN properties NNS . SENT The DT following NN represents VVZ the DT purchase NN price NN allocation NN for IN the DT acquisition NN . SENT Cash NN 3 CD , , 665 CD 125 CD , , 612 CD Agnico NP Eagle NP shares NNS valued VVN at IN 11 CD . SENT 67 CD per IN share NN 1 CD , , 466 CD Transaction NN costs NNS 225 CD 5 CD , , 356 CD Allocation NN of IN purchase NN price NN . SENT Buildings NNS and CC property NN 843 CD Production NN equipment NN 1 CD , , 499 CD Head NP frame NN and CC related JJ infrastructure NN 3 CD , , 463 CD Mining NP properties NNS 5 CD , , 280 CD Liabilities NNS assumed VVD 5 CD , , 729 CD 5 CD , , 356 CD Also RB in IN 2003 CD , , the DT Company NN purchased VVD a DT 100 CD interest NN in IN the DT Lapa NP property NN from IN Breakwater NN Resources NP Inc NP . SENT for IN 9 CD . SENT 1 CD million CD including VVG 0 CD . SENT 2 CD million CD of IN transaction NN costs NNS . SENT The DT entire JJ purchase NN price NN has VHZ been VBN classified VVN as IN mining NN properties NNS . SENT Under IN the DT terms NNS of IN the DT agreement NN , , the DT Company NN will MD have VH to TO pay VV contingent JJ consideration NN of IN 1 CD million CD if IN the DT published VVN Inferred VVN Mineral NP Resource NP on IN the DT property NN reaches VVZ 2 CD , , 000 CD , , 000 CD ounces NNS of IN gold NN . SENT This DT payment NN would MD reduce VV any DT future JJ royalties NNS payable JJ should MD the DT property NN reach VV commercial JJ production NN . SENT 101 CD 11 CD . SENT OTHER JJ FINANCIAL NP INFORMATION NN 2004 CD 2003 CD Trade NP payables NNS 22 CD , , 611 CD 24 CD , , 630 CD Wages NP payable JJ 2 CD , , 948 CD 1 CD , , 467 CD Accrued JJ liabilities NNS 3 CD , , 108 CD 3 CD , , 818 CD 28 CD , , 667 CD 29 CD , , 915 CD 12 CD . SENT RELATED JJ PARTY NN TRANSACTIONS NNS As IN at IN December NP 31 CD , , 2004 CD , , the DT total JJ indebtedness NN of IN Contact NP Diamond NP to TO the DT Company NN was VBD 3 CD . SENT 024 CD million CD 2003 CD 2 CD . SENT 739 CD million CD including VVG accrued JJ interest NN to TO December NP 31 CD , , 2004 CD of IN nil NN 2003 CD nil NN . SENT Contact NP Diamond NP was VBD a DT consolidated JJ entity NN of IN the DT Company NN for IN the DT year NN ended VVN December NP 31 CD , , 2002 CD . SENT As IN of IN August NP 2003 CD , , the DT Company NN ceased VVD consolidating VVG Contact NP Diamond NP as IN the DT Company's NP investment NN no RB longer RB represented VVD a DT controlling JJ financial JJ interest NN . SENT The DT loan NN was VBD originally RB advanced JJ for IN the DT purpose NN of IN funding VVG ongoing JJ exploration NN and CC operating NN activities NNS . SENT The DT loan NN is VBZ repayable JJ on IN demand NN with IN a DT rate NN of IN interest NN on IN the DT loan NN of IN 8 CD per IN annum NN . SENT The DT Company NN , , however RB , , waived VVD the DT interest NN on IN this DT loan NN commencing VVG May NP 13 CD , , 2002 CD and CC has VHZ no DT intention NN of IN charging VVG any DT interest NN or CC demanding VVG repayment NN in IN the DT next JJ year NN . SENT On IN May NP 13 CD , , 2002 CD , , the DT Company NN completed VVD a DT transaction NN with IN Contact NP Diamond NP which WDT resulted VVD in IN the DT elimination NN of IN 26 CD million CD of IN the DT outstanding JJ amount NN owed VVN by IN Contact NP Diamond NP to TO the DT Company NN . SENT In IN addition NN , , the DT Company NN provides VVZ Contact NP Diamond NP with IN some DT executives NNS , , employees NNS and CC administrative JJ support NN at IN no DT cost NN to TO Contact NP Diamond NP . SENT Four CD of IN the DT nine CD current JJ directors NNS of IN Contact NP Diamond NP are VBP also RB directors NNS of IN the DT Company NN . SENT 13 CD . SENT DIFFERENCES NNS FROM IN CANADIAN NP GENERALLY RB ACCEPTED VVD ACCOUNTING NN PRINCIPLES NNS These DT consolidated JJ financial JJ statements NNS have VHP been VBN prepared VVN in IN accordance NN with IN US NP GAAP NP . SENT A DT reconciliation NN between IN US NP GAAP NP and CC Canadian NP GAAP NP is VBZ presented VVN below RB together RB with IN a DT description NN of IN the DT significant JJ measurement NN differences NNS affecting VVG these DT consolidated JJ financial JJ statements NNS . SENT a DT Financial NP instruments NNS Agnico NP Eagle NP enters VVZ into IN financial JJ instruments NNS with IN a DT number NN of IN financial JJ institutions NNS in IN order NN to TO hedge VV underlying JJ revenue NN and CC cost NN exposures NNS arising VVG from IN commodity NN prices NNS , , interest NN rates NNS and CC foreign JJ currency NN exchange NN rates NNS . SENT In IN particular JJ , , the DT Company NN uses VVZ over IN the DT counter JJ put NN and CC call VV option NN metals NNS and CC foreign JJ exchange NN contracts NNS to TO hedge VV against IN its PP$ net JJ revenues NNS from IN mining NN operations NNS and CC its PP$ costs NNS of IN production NN , , respectively RB . SENT Under IN US NP GAAP NP , , the DT Company NN follows VVZ the DT accounting NN recommendations NNS made VVN under IN FASB NP Statements NNS No RB . SENT 133 CD and CC No RB . SENT 137 CD on IN accounting NN for IN derivative JJ financial JJ instruments NNS and CC hedging NN . SENT The DT recommendations NNS require VVP that IN all DT derivative JJ instruments NNS be VB recognized VVN as IN assets NNS or CC liabilities NNS and CC be VB measured VVN at IN fair JJ value NN . SENT The DT accounting NN for IN changes NNS in IN the DT fair JJ value NN of IN a DT derivative JJ instrument NN depends VVZ on IN whether IN it PP has VHZ been VBN designated VVN and CC qualifies VVZ as IN part NN of IN a DT hedging NN relationship NN . SENT FAS NP 133 CD establish VV certain JJ criteria NNS to TO be VB met VVN in IN order NN to TO designate VV a DT derivative JJ instrument NN as IN a DT hedge NN and CC to TO deem VV a DT hedge NN as IN effective JJ . SENT Under IN Canadian NP GAAP NP , , gains NNS and CC losses NNS on IN these DT contracts NNS are VBP accounted VVN for IN as IN a DT component NN of IN the DT related JJ hedged VVN transaction NN . SENT 102 CD b SYM Minimum NP pension NN liability NN Under IN US NP GAAP NP , , if IN the DT accumulated VVN pension NN plan NN benefit NN obligation NN exceeds VVZ the DT market NN value NN of IN plan NN assets NNS , , a DT minimum JJ pension NN liability NN for IN the DT excess NN is VBZ recognized VVN to TO the DT extent NN that IN the DT liability NN recorded VVN in IN the DT balance NN sheet NN is VBZ less JJR than IN the DT minimum JJ liability NN . SENT Any DT portion NN of IN this DT additional JJ liability NN that WDT relates VVZ to TO unrecognized JJ prior JJ service NN cost NN is VBZ recognized VVN as IN an DT intangible JJ asset NN while IN the DT remainder NN is VBZ charged VVN to TO comprehensive JJ income NN . SENT Canadian NP GAAP NP does VVZ not RB require VV the DT Company NN to TO record VV a DT minimum JJ liability NN and CC does VVZ not RB have VH the DT concept NN of IN comprehensive JJ income NN . SENT c SYM Asset NP retirement NN obligations NNS Under IN US NP GAAP NP , , new JJ policies NNS were VBD adopted VVN effective JJ January NP 1 CD , , 2003 CD based VVN on IN new JJ standards NNS published VVN by IN the DT FASB NP . SENT These DT standards NNS are VBP established VVN for IN the DT recognition NN and CC measurement NN of IN liabilities NNS for IN legal JJ obligations NNS associated VVN with IN the DT retirement NN of IN a DT long RB lived VVN asset NN that IN result NN from IN its PP$ acquisition NN , , construction NN , , development NN or CC normal JJ operation NN . SENT A DT liability NN is VBZ recorded VVN for IN such PDT an DT obligation NN at IN its PP$ fair JJ value NN when WRB incurred VVN and CC a DT corresponding JJ asset NN retirement NN cost NN is VBZ added VVN to TO the DT carrying VVG amount NN of IN the DT related JJ asset NN . SENT In IN subsequent JJ periods NNS , , the DT carrying VVG amount NN of IN the DT liability NN is VBZ adjusted VVN to TO reflect VV the DT passage NN of IN time NN and CC any DT changes NNS in IN the DT timing NN or CC amount NN of IN the DT underlying JJ future JJ cash NN flows NNS . SENT The DT asset NN retirement NN cost NN is VBZ amortized VVN to TO expense NN over IN the DT asset's JJ useful JJ life NN . SENT Under IN Canadian NP GAAP NP , , a DT similar JJ standard NN became VVD effective JJ for IN the DT Company's NP fiscal JJ year NN beginning NN on IN January NP 1 CD , , 2004 CD with IN retroactive JJ restatement NN of IN prior JJ periods NNS . SENT Under IN US NP standards NNS prior RB to TO 2003 CD , , total JJ expected VVN reclamation NN and CC closure NN costs NNS including VVG legal JJ and CC non JJ legal JJ obligations NNS are VBP recorded VVN and CC charged VVN to TO earnings NNS over IN the DT life NN of IN a DT mine NN using VVG the DT units NNS of IN production NN method NN based VVN on IN proven JJ and CC probable JJ reserves NNS . SENT As IN a DT result NN , , the DT Company's NP 2003 CD US NP GAAP NP income NN statement NN includes VVZ charges NNS for IN the DT cumulative JJ effect NN of IN the DT adoption NN of IN the DT new JJ policy NN . SENT d SYM Dilution NN gain NN The DT dilution NN gain NN that WDT resulted VVD from IN the DT issuance NN of IN common JJ stock NN by IN Contact NP Diamond NP is VBZ reported VVN in IN other JJ comprehensive JJ income NN on IN the DT consolidated JJ statement NN of IN income NN loss NN . SENT Under IN Canadian NP GAAP NP , , the DT dilution NN gain NN is VBZ reported VVN above IN the DT line NN Income NN loss NN before IN income NN and CC mining NN taxes NNS on IN the DT consolidated JJ statement NN of IN income NN loss NN . SENT e SYM Other JJ comprehensive JJ loss NN Under IN US NP GAAP NP , , certain JJ assets NNS and CC liabilities NNS are VBP remeasured VVN at IN fair JJ value NN , , with IN changes NNS in IN fair JJ value NN recorded VVN in IN other JJ comprehensive JJ income NN . SENT Under IN Canadian NP GAAP NP , , these DT assets NNS and CC liabilities NNS are VBP recorded VVN at IN cost NN and CC they PP are VBP not RB remeasured JJ to TO fair JJ value NN prior RB to TO the DT date NN they PP are VBP realized VVN or CC settled VVN . SENT The DT assets NNS and CC liabilities NNS affected VVN are VBP . SENT investments NNS , , and CC derivative JJ assets NNS and CC liabilities NNS that WDT qualify VVP for IN cash NN flow NN hedge NN accounting NN treatment NN . SENT f SYM Convertible JJ subordinated JJ debentures NNS Under IN US NP GAAP NP , , the DT Company NN is VBZ not RB permitted VVN to TO bifurcate VV the DT conversion NN option NN of IN the DT Convertible JJ Debentures NNS from IN the DT liability NN component NN and CC the DT entire JJ amount NN of IN the DT Convertible JJ Debentures NNS is VBZ presented VVN as IN a DT liability NN . SENT Under IN Canadian NP GAAP NP , , the DT fair JJ value NN of IN the DT conversion NN option NN associated VVN with IN the DT Convertible JJ Debentures NNS is VBZ reflected VVN as IN other JJ paid VVN in IN capital NN while IN the DT fair JJ value NN of IN the DT obligation NN to TO the DT debenture NN holders NNS for IN interest NN and CC principal JJ payments NNS is VBZ presented VVN as IN a DT component NN of IN shareholders NNS equity NN . SENT As IN a DT result NN , , 1 CD . SENT 6 CD million CD of IN financing NN costs NNS associated VVN with IN the DT equity NN component NN of IN the DT Convertible JJ Debentures NNS , , which WDT has VHZ been VBN classified VVN as IN deferred JJ financing NN costs NNS under IN US NP GAAP NP has VHZ been VBN charged VVN against IN deficit NN under IN Canadian NP GAAP NP . SENT Furthermore RB , , under IN US NP GAAP NP , , interest NN costs NNS associated VVN with IN the DT Convertible JJ Debentures NNS are VBP charged VVN to TO income NN loss NN whereas IN under IN Canadian NP GAAP NP , , interest NN costs NNS are VBP charged VVN to TO deficit NN , , but CC are VBP used VVN to TO reduce VV net JJ income NN loss NN for IN the DT purposes NNS of IN computing VVG net JJ income NN loss NN per IN share NN . SENT 103 CD In IN 2003 CD , , the DT Company NN entered VVN into IN a DT swap NN whereby WRB the DT Company NN swapped VVN its PP$ fixed JJ rate NN payments NNS on IN the DT convertible JJ subordinated JJ debentures NNS for IN variable JJ rate NN payments NNS see VVP note NN 4 CD a DT . SENT Under IN US NP GAAP NP , , the DT fair JJ value NN of IN the DT swap NN is VBZ recorded VVN as IN either CC an DT asset NN or CC liability NN with IN a DT corresponding JJ charge NN to TO income NN . SENT The DT carrying VVG value NN of IN the DT Convertible JJ Debentures NNS is VBZ also RB adjusted VVN for IN changes NNS in IN the DT fair JJ value NN of IN the DT swap NN with IN a DT corresponding JJ charge NN to TO income NN . SENT Under IN Canadian NP GAAP NP , , fair JJ value NN attributable JJ to TO the DT risk NN being VBG hedged VVN is VBZ recorded VVN as IN an DT asset NN or CC liability NN with IN a DT corresponding JJ charge NN to TO income NN loss NN . SENT g NN Income NN taxes NNS Both CC Canadian JJ GAAP NP and CC US NP GAAP NP follow VV the DT liability NN method NN of IN accounting NN for IN income NN taxes NNS . SENT Under IN US NP GAAP NP , , future JJ income NN and CC mining NN taxes NNS are VBP calculated VVN based VVN on IN enacted VVN rates NNS whereas IN under IN Canadian NP GAAP NP , , substantively RB enacted VVN rates NNS are VBP used VVN . SENT Where WRB assets NNS and CC liabilities NNS are VBP recorded VVN at IN different JJ carrying VVG amounts NNS for IN US NP GAAP NP and CC Canadian NP GAAP NP , , due JJ to TO differences NNS in IN the DT accounting NN policies NNS that WDT affect VVP these DT assets NNS and CC liabilities NNS , , a DT difference NN also RB arises VVZ in IN the DT amount NN of IN temporary JJ timing NN differences NNS that WDT give VVP rise NN to TO future JJ tax NN assets NNS and CC liabilities NNS . SENT Consequently RB , , the DT amounts NNS of IN future JJ tax NN assets NNS and CC liabilities NNS recorded VVN under IN US NP GAAP NP differ VVP from IN the DT amounts NNS of IN future JJ tax NN assets NNS and CC liabilities NNS recorded VVN under IN Canadian NP GAAP NP . SENT h NN Amortization NN of IN mining NN properties NNS Prior RB to TO 2002 CD , , the DT amortization NN of IN mining NN properties NNS under IN Canadian NP GAAP NP was VBD calculated VVN using VVG the DT unit NN of IN production NN method NN using VVG proven JJ and CC probable JJ reserves NNS and CC non JJ reserve NN material NN of IN the DT mine NN when WRB sufficient JJ objective NN evidence NN existed VVD to TO support VV a DT conclusion NN that IN the DT non JJ reserve NN material NN will MD be VB produced VVN . SENT Under IN US NP GAAP NP , , amortization NN was VBD calculated VVN using VVG the DT unit NN of IN production NN method NN using VVG only RB the DT proven JJ and CC probable JJ reserves NNS of IN the DT mine NN . SENT This DT resulted VVD in IN less JJR amortization NN being VBG recorded VVN in IN the DT Canadian JJ GAAP NP consolidated JJ financial JJ statements NNS resulting VVG in IN a DT higher JJR asset NN carrying VVG value NN . SENT After IN 2002 CD , , the DT Canadian JJ GAAP NP accounting NN policy NN was VBD to TO use VV only RB the DT proven JJ and CC probable JJ reserves NNS . SENT i NP Share NP issue NN costs VVZ US NP GAAP NP requires VVZ that DT share NN issue NN costs NNS of IN 0 CD . SENT 3 CD million CD 2003 CD 0 CD . SENT 3 CD million CD , , net JJ of IN related JJ income NN taxes NNS , , be VB recorded VVN as IN a DT reduction NN of IN proceeds NNS of IN issue NN while NN under IN Canadian NP GAAP NP , , the DT Company NN charges VVZ share NN issue NN costs NNS to TO the DT deficit NN account NN . SENT j NN Flow NP through IN shares NNS As IN described VVN in IN note NN 6 CD to TO the DT consolidated JJ financial JJ statements NNS , , the DT Company NN issued VVD common JJ shares NNS by IN way NN of IN a DT flow NN through IN common JJ share NN private JJ placement NN . SENT The DT Company NN received VVD a DT net JJ premium NN to TO the DT prevailing JJ market NN price NN on IN this DT issuance NN . SENT Under IN US NP GAAP NP , , the DT difference NN between IN the DT flow NN through IN share NN issuance NN price NN and CC the DT prevailing JJ market NN price NN of IN Agnico NP Eagle NP stock NN at IN the DT time NN of IN issuance NN is VBZ recorded VVN as IN a DT liability NN at IN the DT time NN the DT flow NN through IN shares NNS are VBP issued VVN . SENT This DT liability NN is VBZ extinguished VVN at IN the DT time NN the DT exploration NN expenditures NNS are VBP renounced VVN to TO investors NNS . SENT The DT difference NN between IN the DT flow NN through IN share NN issuance NN price NN and CC market NN price NN reduces VVZ the DT future JJ tax NN expense NN charged VVN to TO income NN loss NN as IN this DT difference NN represents VVZ proceeds NNS received VVN by IN the DT Company NN for IN the DT sale NN of IN future JJ tax NN deductions NNS to TO investors NNS in IN the DT flow NN through IN shares NNS . SENT Under IN Canadian NP GAAP NP , , Agnico NP Eagle NP records VVZ such JJ common JJ share NN issuances NNS by IN crediting VVG share NN capital NN for IN the DT full JJ value NN of IN cash NN consideration NN received VVD . SENT The DT cost NN of IN the DT future JJ income NN and CC mining NN tax NN benefits NNS arising VVG at IN the DT time NN Agnico NP Eagle NP renounces VVZ the DT income NN and CC mining NN tax NN deductibility NN of IN the DT eligible JJ expenditures NNS to TO the DT investors NNS is VBZ accounted VVN for IN as IN a DT share NN issue NN cost NN . SENT k NN Capital NN stock NN and CC deficit NN Canadian NP GAAP NP allows VVZ for IN the DT reduction NN of IN stated JJ capital NN of IN outstanding JJ common JJ shares NNS with IN a DT corresponding JJ offset VVN to TO deficit NN . SENT This DT reclassification NN , , which WDT Agnico NP Eagle NP made VVD 104 CD in IN 1998 CD and CC prior RB to TO 1995 CD , , is VBZ not RB permitted VVN by IN US NP GAAP NP . SENT As IN a DT result NN , , under IN Canadian NP GAAP NP , , capital NN stock NN and CC deficit NN is VBZ decreased VVN by IN 126 CD . SENT 1 CD million CD in IN 2004 CD and CC 2003 CD . SENT l NN Reconciliation NN of IN Consolidated NP Balance NN Sheets NP As IN at IN December NP 31 CD 2004 CD 2003 CD Notes NP US NP GAAP NP Adjustments NNS Canadian JJ GAAP NP US NP GAAP NP Adjustments NNS Canadian JJ GAAP NP ASSETS NPS Current NP Cash NN and CC cash NN equivalents NNS 33 CD , , 005 CD 33 CD , , 005 CD 56 CD , , 934 CD 56 CD , , 934 CD Restricted JJ cash NN 8 CD , , 173 CD 8 CD , , 173 CD 2 CD , , 549 CD 2 CD , , 549 CD Short JJ term NN investments NNS 64 CD , , 836 CD 64 CD , , 836 CD 50 CD , , 882 CD 50 CD , , 882 CD Metals NNS awaiting VVG settlement NN 43 CD , , 442 CD 43 CD , , 442 CD 34 CD , , 570 CD 34 CD , , 570 CD Income NP taxes NNS recoverable JJ 16 CD , , 105 CD 16 CD , , 105 CD 7 CD , , 539 CD 7 CD , , 539 CD Inventories NNS . SENT Ore NP stockpiles NNS 9 CD , , 036 CD 9 CD , , 036 CD 6 CD , , 557 CD 6 CD , , 557 CD Concentrates VVZ 9 CD , , 065 CD 9 CD , , 065 CD 1 CD , , 346 CD 1 CD , , 346 CD Supplies NNS 8 CD , , 292 CD 8 CD , , 292 CD 6 CD , , 276 CD 6 CD , , 276 CD Other JJ current JJ assets NNS e SYM 19 CD , , 843 CD 2 CD , , 147 CD 17 CD , , 696 CD 10 CD , , 363 CD 2 CD , , 176 CD 8 CD , , 187 CD Total JJ current JJ assets NNS 211 CD , , 797 CD 2 CD , , 147 CD 209 CD , , 650 CD 177 CD , , 016 CD 2 CD , , 176 CD 174 CD , , 840 CD Fair NP value NN of IN derivative JJ financial JJ instruments NNS a DT 2 CD , , 689 CD 2 CD , , 689 CD 7 CD , , 573 CD 7 CD , , 573 CD Other JJ assets NNS f SYM 25 CD , , 234 CD 505 CD 25 CD , , 739 CD 11 CD , , 214 CD 1 CD , , 095 CD 12 CD , , 309 CD Future JJ income NN and CC mining NN tax NN assets NNS g NN 51 CD , , 407 CD 1 CD , , 239 CD 52 CD , , 646 CD 41 CD , , 579 CD 1 CD , , 284 CD 42 CD , , 863 CD Mining NP properties NNS h NN 427 CD , , 037 CD 3 CD , , 349 CD 430 CD , , 386 CD 399 CD , , 719 CD 3 CD , , 525 CD 403 CD , , 244 CD 718 CD , , 164 CD 257 CD 718 CD , , 421 CD 637 CD , , 101 CD 3 CD , , 845 CD 633 CD , , 256 CD LIABILITIES NNS AND CC SHAREHOLDERS NNS EQUITY NN Current JJ Accounts NNS payable JJ and CC accrued JJ liabilities NNS 28 CD , , 667 CD 28 CD , , 667 CD 29 CD , , 915 CD 29 CD , , 915 CD Dividends NNS payable JJ 3 CD , , 399 CD 3 CD , , 399 CD 3 CD , , 327 CD 3 CD , , 327 CD Interest NN payable JJ 2 CD , , 426 CD 2 CD , , 426 CD 3 CD , , 161 CD 3 CD , , 161 CD Total JJ current JJ liabilities NNS 34 CD , , 492 CD 34 CD , , 492 CD 36 CD , , 403 CD 36 CD , , 403 CD Long JJ term NN debt NN f SYM 141 CD , , 495 CD 141 CD , , 495 CD 143 CD , , 750 CD 143 CD , , 750 CD Reclamation NN provision NN and CC other JJ liabilities NNS b SYM 14 CD , , 815 CD 14 CD , , 815 CD 15 CD , , 377 CD 729 CD 14 CD , , 648 CD Future JJ income NN and CC mining NN tax NN liabilities NNS g NN 57 CD , , 136 CD 422 CD 57 CD , , 558 CD 40 CD , , 848 CD 454 CD 41 CD , , 302 CD Fair NP value NN of IN derivative JJ financial JJ instruments NNS a DT 2 CD , , 964 CD 2 CD , , 964 CD Shareholders NNS Equity NP Common NP shares NNS i NP , , j NN , , k NN 620 CD , , 704 CD 145 CD , , 732 CD 474 CD , , 972 CD 601 CD , , 305 CD 150 CD , , 360 CD 450 CD , , 945 CD Stock NP options NNS outstanding JJ 465 CD 465 CD Convertible JJ subordinated JJ debentures NNS f SYM 99 CD , , 045 CD 99 CD , , 045 CD 95 CD , , 057 CD 95 CD , , 057 CD Other JJ paid VVN in IN capital NN f NN 55 CD , , 028 CD 55 CD , , 028 CD 55 CD , , 028 CD 55 CD , , 028 CD Warrants NNS 15 CD , , 732 CD 15 CD , , 732 CD 15 CD , , 732 CD 15 CD , , 732 CD Contributed VVD surplus NN i NP 7 CD , , 181 CD 1 CD , , 621 CD 5 CD , , 560 CD 7 CD , , 181 CD 1 CD , , 621 CD 5 CD , , 560 CD Deficit NN i NP , , k NN 172 CD , , 756 CD 128 CD , , 609 CD 44 CD , , 147 CD 218 CD , , 055 CD 136 CD , , 636 CD 81 CD , , 419 CD Accumulated VVN other JJ comprehensive JJ loss NN e SYM 1 CD , , 100 CD 1 CD , , 100 CD 5 CD , , 440 CD 5 CD , , 440 CD Cumulative JJ translation NN adjustment NN e SYM 1 CD , , 937 CD 1 CD , , 937 CD Total JJ shareholders NNS equity NN 470 CD , , 226 CD 138 CD , , 366 CD 608 CD , , 592 CD 400 CD , , 723 CD 140 CD , , 180 CD 540 CD , , 903 CD 718 CD , , 164 CD 257 CD 718 CD , , 421 CD 637 CD , , 101 CD 3 CD , , 845 CD 633 CD , , 256 CD 105 CD k NN Reconciliation NN of IN Consolidated NP Net JJ Income NN For IN the DT years NNS ended VVN December NP 31 CD Notes NNS 2004 CD 2003 CD Net JJ income NN US NP GAAP NP 47 CD , , 879 CD 19 CD , , 498 CD Revenues NNS from IN mining NN operations NNS Interest NN and CC sundry JJ income NN a DT , , f NN 2 CD , , 020 CD 346 CD Interest NN expense NN f SYM 7 CD , , 001 CD 7 CD , , 001 CD Other JJ 127 CD Dilution NN gain NN on IN issuance NN of IN shares NNS by IN subsidiary NN d NN 1 CD , , 837 CD 4 CD , , 500 CD Income NN and CC mining NN tax NN expense NN recovery NN g NN 2 CD , , 046 CD 325 CD Cumulative JJ catch NN up IN adjustment NN relating VVG to TO FAS NP 143 CD c SYM 1 CD , , 743 CD Net JJ income NN Canadian JJ GAAP NP 56 CD , , 743 CD 6 CD , , 798 CD Net JJ income NN per IN share NN basic JJ and CC diluted JJ 0 CD . SENT 54 CD 0 CD . SENT 20 CD 106 CD l NN Reconciliation NN of IN Consolidated NP Cash NP Flows VVZ For IN the DT year NN ended VVN December NP 31 CD Notes NNS 2004 CD 2003 CD Operating NN activities NNS Cash NN provided VVN by IN operating VVG activities NNS per IN US NP GAAP NP 49 CD , , 525 CD 4 CD , , 253 CD Difference NN in IN net JJ income NN between IN US NP GAAP NP and CC Canadian NP GAAP NP 8 CD , , 864 CD 12 CD , , 700 CD Amortization NN f SYM 533 CD 533 CD Future JJ income NN and CC mining NN taxes NNS g NN 2 CD , , 046 CD 325 CD Unrealized JJ gain NN on IN derivative JJ contracts NNS a DT 2 CD , , 020 CD 346 CD Cumulative JJ catch NN up IN adjustment NN relating VVG to TO FAS NP 143 CD c SYM 1 CD , , 743 CD Dilution NN gain NN on IN issuance NN of IN shares NNS by IN subsidiary NN d NN 1 CD , , 837 CD 4 CD , , 500 CD Other JJ 127 CD Cash NN flows NNS provided VVN by IN operating VVG activities NNS per IN Canadian JJ GAAP NP 55 CD , , 993 CD 10 CD , , 721 CD Investing NN activities NNS Cash NN used VVN in IN investing VVG activities NNS per IN US NP GAAP NP 94 CD , , 832 CD 105 CD , , 907 CD Cash NN flows NNS used VVN in IN investing VVG activities NNS per IN Canadian JJ GAAP NP 94 CD , , 832 CD 105 CD , , 907 CD Financing NP activities NNS Cash NN provided VVN by IN financing NN activities NNS per IN US NP GAAP NP 21 CD , , 173 CD 5 CD , , 439 CD Interest NN on IN convertible JJ debentures NNS charged VVN to TO deficit NN f NN 6 CD , , 468 CD 6 CD , , 468 CD Cash NN flows NNS provided VVN by IN used VVN in IN financing NN activities NNS per IN Canadian JJ GAAP NP 14 CD , , 705 CD 1 CD , , 029 CD Effect NN of IN exchange NN rate NN changes NNS on IN cash NN and CC cash NN equivalents NNS US NP and CC Canadian NP GAAP NP 205 CD 215 CD Net JJ decrease NN in IN cash NN and CC cash NN equivalents NNS during IN the DT year NN 23 CD , , 929 CD 96 CD , , 000 CD Cash NN and CC cash NN equivalents NNS , , beginning VVG of IN year NN 56 CD , , 934 CD 152 CD , , 934 CD Cash NN and CC cash NN equivalents NNS , , end NN of IN year NN per IN Canadian JJ GAAP NP 33 CD , , 005 CD 56 CD , , 934 CD Other JJ operating NN cash NN flow NN information NN . SENT Interest NN paid VVD during IN the DT year NN 6 CD , , 999 CD 7 CD , , 750 CD Income NP , , mining NN and CC capital NN taxes NNS paid VVN during IN the DT year NN 222 CD 2 CD , , 887 CD 107 CD ITEM NN 19 CD . SENT EXHIBITS NNS Exhibits NNS and CC Exhibit NN Index NN . SENT The DT following VVG Exhibits NNS are VBP filed VVN as IN part NN of IN this DT Annual NP Report NP and CC incorporated VVN herein RB by IN reference NN to TO the DT extent NN applicable JJ . SENT Exhibit VV Index NP Exhibit VV No UH . SENT Description NN Page NP Number NP 1 CD . SENT 01 CD Bylaws NNS of IN the DT Company NN and CC Articles NNS of IN Amalgamation NN of IN the DT Company NN , , incorporated VVN by IN reference NN to TO the DT incorporated VVN by IN reference NN to TO Exhibit VV 99 CD F NN to TO the DT Registrant's NP Annual NP Report NP on IN Form NP 20 CD F NN for IN the DT fiscal JJ year NN ended VVN December NP 31 CD , , 2003 CD . SENT 4 LS . SENT 01 CD Credit NP Agreement NN incorporated VVN by IN reference NN to TO Exhibit VV 4 CD to TO the DT Registrant's NP Annual NP Report NP on IN Form NP 20 CD F NN for IN the DT fiscal JJ year NN ended VVN December NP 31 CD , , 2003 CD . SENT 4 LS . SENT 02 CD Form NN of IN Trust NP Indenture NN incorporated VVN by IN reference NN to TO exhibit VV 7 CD . SENT 1 CD to TO the DT Registrant's NP Registration NN Statement NN on IN Form NP F NP 10 CD A NP File NP No NP . SENT 333 CD 100902 CD filed VVN with IN the DT SEC NP on IN November NP 8 CD , , 2002 CD . SENT 4 LS . SENT 03 CD Form NN of IN Warrant NN Indenture NN incorporated VVN by IN reference NN to TO exhibit VV 7 CD . SENT 1 CD to TO the DT Registrant's NP Registration NN Statement NN on IN Form NP F NP 10 CD A NP File NP No NP . SENT 333 CD 100850 CD filed VVN with IN the DT SEC NP on IN November NP 6 CD , , 2002 CD . SENT 11 CD . SENT 01 CD Code NP of IN Ethics NP incorporated VVN by IN reference NN to TO Exhibit VV 99 CD E NN to TO the DT Registrant's NP Annual NP Report NP on IN Form NP 20 CD F NN for IN the DT fiscal JJ year NN ended VVN December NP 31 CD , , 2003 CD . SENT 12 CD . SENT 01 CD Certification NN Pursuant JJ to TO Section NP 906 CD Of IN The DT Sarbanes NP Oxley NP Act NP Of IN 2002 CD Subsections NNS A NP And CC B NP Of IN Section NP 1350 CD , , Chapter NP 63 CD Of IN Title NP 18 CD , , United NP States NPS Code NP Sean NP Boyd NP . SENT 110 CD 12 CD . SENT 02 CD Certification NN Pursuant JJ to TO Section NP 906 CD Of IN The DT Sarbanes NP Oxley NP Act NP Of IN 2002 CD Subsections NNS A NP And CC B NP Of IN Section NP 1350 CD , , Chapter NP 63 CD Of IN Title NP 18 CD , , United NP States NPS Code NP David NP Garofalo NP . SENT 111 CD 13 CD . SENT 01 CD Certification NN pursuant JJ to TO Title NP 18 CD , , United NP States NPS Code NP , , Section NP 1350 CD as IN adopted VVN pursuant JJ to TO Section NP 906 CD of IN the DT Sarbanes NP Oxley NP Act NP of IN 2002 CD Sean NP Boyd NP . SENT 112 CD 13 CD . SENT 02 CD Certification NN pursuant JJ to TO Title NP 18 CD , , United NP States NPS Code NP , , Section NP 1350 CD as IN adopted VVN pursuant JJ to TO Section NP 906 CD of IN the DT Sarbanes NP Oxley NP Act NP of IN 2002 CD David NP Garofalo NP . SENT 113 CD 15 CD . SENT 01 CD Notice NN of IN Annual JJ and CC Special JJ Meeting VVG of IN Common JJ Shareholders NNS and CC Management NN Proxy NN Circular JJ dated VVN March NP 21 CD , , 2005 CD . SENT 114 CD 15 CD . SENT 03 CD Consent NP of IN Independent NP Registered VVD Public NP Accounting NP Firm NN 146 CD Such JJ exhibits NNS and CC other JJ information NN filed VVN by IN the DT Company NN with IN the DT SEC NP are VBP available JJ to TO shareholders NNS upon IN request NN at IN the DT SEC's NP public JJ reference NN section NN or CC may MD be VB inspected VVN and CC copied VVN at IN prescribed JJ rates NNS at IN the DT public JJ reference NN facilities NNS maintained VVN by IN the DT SEC NP at IN Room NP 1024 CD , , 450 CD Fifth NP Street NP , , N NP . SENT W NN . SENT , , Washington NP , , D NP . SENT C SYM . SENT 20549 CD , , U NP . SENT S NP . SENT A DT . SENT 108 CD SIGNATURES NNS The DT registrant NN hereby RB certifies VVZ that IN it PP meets VVZ all DT of IN the DT requirements NNS for IN filing NN on IN Form NP 20 CD F NN and CC that IN it PP has VHZ duly RB caused VVN and CC authorized VVN the DT undersigned VVN to TO sign VV this DT Annual JJ Report NN on IN its PP$ behalf NN . SENT AGNICO NP EAGLE NN MINES NNS LIMITED JJ Toronto NP , , Canada NP March NP 22 CD , , 2005 CD By RB . SENT s PP DAVID NP GAROFALO NP David NP Garofalo NP Vice NP President NP , , Finance NP and CC Chief NP Financial NP Officer NP 109 CD QuickLinks NP TABLE NN OF IN CONTENTS NNS PRELIMINARY JJ NOTE NN NOTE NN TO TO INVESTORS NNS CONCERNING VVG ESTIMATES NNS OF IN MINERAL NN RESOURCES NNS NOTE VV TO TO INVESTORS NNS CONCERNING VVG CERTAIN JJ MEASURES NNS OF IN PERFORMANCE NN Gold NP PM NP Fix NP US NP Oz NP Silver NP PM NP Fix NP US NP Oz NP REPORT NN OF IN INDEPENDENT JJ REGISTERED JJ PUBLIC JJ ACCOUNTING NN FIRM NN Summary NN Of IN Significant JJ Accounting NP Policies NNS AGNICO NP EAGLE NN MINES NNS LIMITED JJ CONSOLIDATED JJ BALANCE NN SHEETS NNS thousands NNS of IN United NP States NPS dollars NNS , , US NP GAAP NP basis NN AGNICO NP EAGLE NN MINES NNS LIMITED JJ CONSOLIDATED JJ STATEMENTS NNS OF IN INCOME NN LOSS NN AND CC COMPREHENSIVE JJ INCOME NN LOSS NN thousands NNS of IN United NP States NPS dollars NNS except IN per IN share NN amounts NNS , , US NP GAAP NP basis NN AGNICO NP EAGLE NN MINES NNS LIMITED JJ CONSOLIDATED JJ STATEMENTS NNS OF IN SHAREHOLDERS NNS EQUITY NN thousands NNS of IN United NP States NPS dollars NNS , , US NP GAAP NP basis NN AGNICO NP EAGLE NN MINES NNS LIMITED JJ CONSOLIDATED JJ STATEMENTS NNS OF IN CASH NN FLOWS VVZ thousands NNS of IN United NP States NPS dollars NNS , , US NP GAAP NP basis NN AGNICO NP EAGLE NN MINES NNS LIMITED JJ NOTES NNS TO TO CONSOLIDATED JJ FINANCIAL NP STATEMENTS NNS thousands NNS of IN United NP States NPS dollars NNS except IN per IN share NN amounts NNS , , unless IN otherwise RB indicated VVN December NP 31 CD , , 2004 CD SIGNATURES NNS