Agnico Eagle Mines Ltd (AEM) 2008 Q1 法說會逐字稿

Ladies and gentlemen, welcome to the annual and special meeting of the shareholders of Agnico-Eagle Mines. My name is James Nasso and I'm Chairman of the Board of Agnico-Eagle Mines. (Spoken in foreign language). With that, folks, as is is our custom every year we like to greet our shareholders and employees in the respective languages in the various regions where we have a presence and we will begin with our Director from Finland, Pertti Voutilainen, who will greet folks in Finnish and Swedish.

(Spoken in foreign language).

Thank you. Now, for Mexico, we have Luis Philipe Medina, our General Manager, could you come forward please and address?

(Spoken in foreign language).

We have some special visitors here from Norway this morning and I'd like to introduce them. They have traveled a long way and we have a presence as you know in Norway. We have with us this morning David Esquani, Peter Tapatai and his wife Lena, David Samliak, Joe Apaluptuk, sorry, folks, Susan Apaluptuk, and also John Todd, the Foreign Minister of Mines and I should say -- and David will do the greeting in (inuktatuk) and he's a sitting member of the legislature and Former Minister of Finance, as is John Todd. Welcome to all of you and thanks for coming. Would you please welcome David wherever you are? Welcome in your language?

(Spoken in foreign language). Thank you very much for a very warm welcome this morning. If I may, sir, I'd like a few words now or later?

Yes, later on. We'll just proceed with the formalities of the meeting. That will be later.

Oh, sorry.

Thank you, thank you. We'll deal with the Board of Trade in accordance with the bylaws of the Corporation, I'll preside as Chairman of this meeting, Mr. Greg Laing, Counsel, Senior Vice President, Legal and Corporate Secretary of the meeting of the Corporation will act as a Secretary of the meeting and with the consent of the meeting, I'd like to introduce [Shirley Tom] and [Shirley Wan] of Computer Share Trust Company of Canada, the corporations registrar and transfer agents will act as Scrutineers and I believe they're at the back. Could you please stand? There they are, waving, okay. Since this meeting was called for 11:00 it is now that time and I ask that the meeting come to order. After the formal business of the meeting, Sean Boyd, the Vice Chairman and Chief Executive Officer of the Corporation will present a corporate update followed by a question and answer period. Before we begin the meeting I'd like to introduce the head table, my fellow Directors and members of the Board. Would they please stand as I call your name. Dr. Leann Baker, Douglas Beaumont, Bernard Craft, Mel Niederman, Howard Stockford, and Pertti Voutilainen. Also with me this morning in the front row are other members of Senior Management. Would you stand when your name is called? David Garofalo, Senior Vice President of Finance and Chief Financial Officer, Alain Blackburn, Senior Vice President of Exploration, Louise Graldan, Vice President of the Environment, Hamar Hagga, Vice President of Europe, Tim Holdane, Vice President of Latin America, Mark Lafwshtiono Vice President of Project Development, Daniel Racin, Vice President of Operations, Tom Robatai, Vice President of Metallurgy Marketing and David Smith, Vice President of Investor Relations.

And I should introduce, well I did introduce the head table, you'll find you know these gentlemen anyway. I confirm that I have received a sworn affidavit of the officer of Computer Share Trust Company of Canada stating that the notice of the meeting, the management proxy circular, the form of the proxy have been sent to each shareholder, each Director and the auditors of Agnico-Eagle. The affidavit has been signed by Computer Share Trust Company of Canada and I direct the Secretary of the meeting to keep a copy of the affidavit, with the minutes of the meeting for the consent of the meeting I will dispense for the reading and notice reading.

The report on attendance, the Secretary of the meeting has advised me we have received the Scrutineers report which indicates that the number of shares voted by proxy gets the election of each of the Directors standing for election. The appointment of the auditors, the amendment to the employees share purchase plan, and the amendment to the bylaws of the Corporation is less than 5% of all of the votes that might be cast at this meeting. Therefore, a vote by a show of hands in these matters would be in order with respect to the amendment to the stock option plan a ballot will be taken.

They Scrutineers have advised me that prior to the meeting the proxies were received from the holders of a sufficient number of shares to constitute a quorum. I therefore declare the meeting to be regularly called and properly constituted for the transaction of business. I direct that the formal report of the Scrutineers be annexed to the minutes of this meeting as is scheduled. Auditors, report financial statements.

First item of business is a presentation of the audit financial statements of Agnico-Eagle Mines Ltd. for the fiscal year-ended December 31, 2007, and the auditors report on these financial statements both of which have previously been sent to the shareholders of the Corporation. If anyone did not receive these financial statements, additional copies are available here. I now place before the meeting the audited financial statements of Agnico-Eagle Mines for the fiscal year ended December 31, 2007 and the auditors report on these financial statements. Questions regarding these statements will be entertained at the end of the meeting. Amendments of the stock option planning, because of the need for a ballot, we will alter the order of business items and from that set out the agenda to begin with the amendment to the stock option plan, therefore the next item of formal business to consider at this meeting is the a approval of the amendment of the Corporation's stock option plan as more fully described on page 10 of and in the appendix D to the management proxy circular. May I have an appropriate motion?

In approving the amendment to the Corporation stock option plan as set out in Appendix D to the Management proxy circular dated March 14, 2008.

Thank you, Dr. Baker. May I have a second motion?

Second the motion.

Thank you, Doug. It is necessary to vote by ballot on this resolution and I therefore direct that a ballot be taken. My ballot will reflect the wishes of those shareholders who have named me as their proxy. I would ask registered shareholders and proxy holders to identify themselves by raising their hands direct to Scrutineers to distribute ballots to those entitled to vote. Would the Scrutineers please distribute the ballot. All registered shareholders and proxy holders have been provided with a ballot for use in this motion. You should record your vote in respect of this motion by marking an X in the box entitled, "For the motion" or "Against the motion" as the case may be and by signing and printing your name in the spaces indicated on the ballot. Once you have completed your ballot, would you kindly hold it in the air for the Scrutineers to collect? While the ballots are being collected and tabulated, we will continue with the formal part of the meeting and we will announce the results of the ballot in a few minutes.

The next item of business is the election of the Directors of the Corporation and the Articles of the Corporation provide for a minimum of five and a maximum of 12 Directors. The Board of Directors has determined that the total number of Directors to be elected at this meeting is nine. I now declare the meeting open for nominations. May I have the nominations, please?

Mr. Chairman, I nominate as Directors of Agnico-Eagle Mines Limited, Dr. Leanne Baker, Douglas R. Beaumont, (inaudible), Bernard Kraft, Hal Niederman, James D. Nassau, Keith Sherckus, Howard Stockford, (inaudible). All those named in the management proxy circular move that they be elected Directors of the Corporation, hold office, next annual shareholders meeting following this meeting until the respective successors are elected.

Thank you, Dave. May I have a second of the motion, please?

Second the motion.

Thank you, Doug. Are there any further nominations? Since the number of nominees is the same as the number of vacant Board positions available to be filled I now declare that those persons nominated have been dually elected acclimation as Directors of Agnico-Eagle Mines Limited. The appointment of the auditors, the next item of business is the appointment of auditors of Agnico-Eagle Mines Limited for the current year. It is proposed at Ernst & Young, and their accountants be appointed as the auditors of the Corporation to hold office until the next Annual Meeting of shareholders of the Corporation or until the successors are appointed and that the auditors remuneration be fixed by the Board of Directors of the Corporation. May I have an appropriate motion?

Chairman, I so move.

Thank you, Mel. May I have a second motion?

I second that motion.

(Spoken in foreign language). You have heard the motion, which has been seconded. Is there any discussion? As there's no discussion I will now ask that the meeting, if it is ready to vote on the motion, all those in favor, please signify by raising your hand. Contrary if any? I declare the motion. Amendment to the share, the employees share purchase plan. The next item of formal business to consider in this meeting is the approval of the amendment of the Corporation's employee incentive and their purchase plan to increase the number of common shares reserved for issuance under Section 3.5 of the plan. From 2.5 million to 5 million common shares as more fully described on page 9 of an Appendix D to the Management proxy circular. May I have an appropriate motion, please?

Chairman, I move that the resolution approving the amendment to the Corporation employee purchase proxy dated March 14, 2008, be approved.

Thank you, Dr. Baker. May I have a second of the motion?

I second the motion.

Thank you, Howard. You've heard the motion which has been seconded. Is there any discussion? As there is no discussion I will now ask the meeting if it is ready to vote on the motion. All those in favor please signify by raising your hand. Contrary if any? I declare the motion carried. Amendment to the bylaws. The next item of formal business to consider at this meeting is the approval of an amendment of the corporations bylaws, as more fully described on page 11 of and appendix F to the Management proxy circular. May I have an appropriate motion, please?

(inaudible - audio difficulties)

May I have a second of the motion?

Chairman, I second the motion.

Thank you, Bernie. Thanks, Doug. You have heard the motion which has been seconded, is there any discussion? As there is no discussion I will now ask the meeting if it is ready to vote on the motion. All those in favor please signify by raising your hand. Contrary it if any? I declare the motion carried. With respect to the ballots conducted earlier, the Scrutineers report the that the resolution relating to the amendment to the stock option plan has been dually carried by a majority of the vote cast, accordingly, I declare the motion carried. If any shareholder is interested the exact number of votes cast in favor of or against the resolution, he or she may obtain particulars after the meeting by contacting the Secretary. That just about does it, folks. I'd like a motion now if there is no further business, I would like a motion to terminate the meeting. May I have a motion doing that, please?

I so move.

May I have a second of the motion?

Mr. Chairman, I second the motion.

Thank you, Leann, Howard. All those in favor of the resolution, please so signify by raising your hand. Contrary if any? I declare that the formal portion of this meeting is now terminated.

Before we move to the presentation of Management, I am pleased for the first time ever we have now the Paul Penna Award. This is the first year of the Paul Penna Award for community service. Mr. Penna was the Founder of Agnico-Eagle and is well noted for his philanthropy and concern for the well being of his employees and the betterment of the community in which we operate. The Paul Penna award is awarded to an Agnico-Eagle employee who best exemplifies the philosophy of the Founder, Paul Penna for community involvement, dedication and hard work. Paul Penna left an enormous impact on the communities he was part of and helped change the lives of many people, one person at a time. This award has been established to ensure that his values continue and play a major role in the identity of Agnico-Eagle as a Company. As well as allowed the legacy of Mr. Penna to live on through the positive initiatives laid forth by our employee s. The inaugural winner of the Paul Penna award from Mexico, [Faisel Rodriguez Valenzuela].

Faisel, his main responsibility is to foster relationship with the Ahitos, they are the communal land owners in Mexico, and keep them informed of the project -- of the Pinos Altos project. He is also responsibility for implementing the community development program which obtains municipal government and State permits for the construction operation of the Pinos Altos project. He is very involved with the local community and continues to enhance its positive relationship with Agnico-Eagle. He implemented the first oral health campaign, which was a coordinated effort between Agnico-Eagle Mexico and the University of Chihuahua. He also organized the first (spoken in foreign language), heritage day, basketball tournament of which 180 primary school children attended, helping to emphasize the value of teamwork. During Christmas, Faisel also coordinated with local parents to organize (spoken in foreign language) additional Christmas parties in which 800 children were involved. Aside from these events, he's also involved in improving the surrounding community through assistance programs that help repair the local roads, donate computers to the library and purchase construction materials needed to build a new school. (Spoken in foreign language).

Thank you very much. It's an honor for me and for my family, sir.

It's almost like the Stanley Cup. There it is. This is to put on your wall and remind you of the good work that you've done and thank you very much. David, if you'd like to take a minute or two, do you have something that you'd like to say, please?

Thank you. (Spoken in foreign language). It's indeed a pleasure to be here this morning, thank you for the invitation. Pleasure to be back with fellow especially over there. I guess what I wanted to say this morning is that as former finance minister, it was a real pleasure for me to as strongly as I could support the exploration and mining industry through work that we did we were able to put in the fuel tax rebate program and the new mining policy and new exploration and mining strategy for which I hope are making things easier for work in Inuit as the Premier and I've both said for many years it is now open for business. There's still a lot of work that we have to do in reducing the regulatory controls especially, but that work continues and we'll get done.

And I also wanted to say that your Company has been a real welcome addition to Baker Lake. It is now your home and I know that is now your home but I would hope that Baker Lake is also your home. The work that your Company has been doing in Baker Lake is already very much noticeable for the last year and maybe a little over a year that you've been in Baker Lake, the work that you've done for the people of Baker Lake is very much appreciated, in fact just a couple of days ago on Wednesday afternoon I was at the Community Hall where the celebrations are going on this week and Wednesday afternoon is for the elders only, the elders games and I was told that your Company sponsored those celebrations for Wednesday afternoon for the elders and I can tell you how much fun they had. Great to see elders out really enjoying themselves with no children bothering them, no grandchildren, no great grandchildren, just having a lot of fun to themselves. In fact there is one game where they were, a game where a number of them were playing, trying to imitate their children, babies, it was great to see them rolling around on the floor and crying and doing what babies do. 70, 80 year olds playing as babies is quite a sight! But that's the work that your Company has been doing in Baker Lake, and under very strong leadership of Ebe and his Management team it's great to see the work going on in Baker Lake.

The road is finally done all the way up to the mine site and just a number of people from Baker Lake and from the region that are already working, for your Company, the contractors that are being kept very busy, and it's expediting and others in Baker Lake and in the region, there's one Company alone, Arctic Fuel who has 50, 60 people are working for them now directly because of your Company. These are all people from the region that have been trained as heavy equipment Operators, and they're doing all of the work for you, and these are for the most part Inuit people from Baker Lake where unemployment has been very high and those 50, 60 jobs alone just getting the mine ready is a major welcoming factor for Baker Lake, so under Ebe's leadership we really do appreciate what your Company is doing. (Inaudible) probably one of the first major developments in all of (inaudible). And because of that, your project alone is increasing the GDP by 20% and that's major, major, when it comes to (inaudible).

So we really do appreciate what your Company is doing. It's setting the bar for the future, other mines will be developed eventually I would hope under the Agnico-Eagle brand, but thank you. We really do appreciate it, thank you.

Thank you very much. It's an honor and pleasure to have you here and the good work will continue. I have a few words to say about that later but as we continue here, I'd like to at this point read the Safe Harbor Statement and then we'll hear from Sean Boyd, our Chief Executive Officer.

We will now proceed with the presentation by Management of the Corporation but before I turn the meeting over to Mr. Boyd, I would like to caution you that Management's presentations may include certain forward-looking statements. These statements are based on Managements current expectations that are naturally subject to uncertainty and changes in circumstances. These factors may cause the corporations actual results to be materially different from the expectations expressed or implied by such forward-looking statements. The Corporation is not under any obligation to update the forward-looking statements in today's presentation. Detailed information about risks and uncertainties as set forth in our most recent securities filings with the Ontario Securities Commission and the SEC, so at this moment in time I'd like to have Sean come forward and if you would?

Thank you, Jim, and good morning, everyone. It's good to see everyone here. We promise next year we'll have a bigger room. It's a bit of an overflow crowd here but we're happy you could all come and we're happy to see a lot of our long time shareholders, some of our ex employees who have retired are here as well and have had a big hand in our success, it's good to see you here as well.

What we would like to do is run through our Operations, give you a sense of the projects and just give you a sense of our strategy, how we think about the business as we go forward. Thank you, David, for coming and thank you for the delegation from Nunavook for coming. I liked your comments at the end. You made reference to an Agnico-Eagle brand. I've never really thought about it in that, from that aspect but that actually makes logical sense. There's a way that we have consistently gone about our business for many many many years, and in a way it is a brand. It's a brand that's focused on its employees, creating additions for a great place to work. It's a brand that gets directly involved in its communities to make it a better place to live and as we branch out away from our home base in Quebec, we welcome the opportunity to make a difference in our employees lives in those new countries and the peoples lives that we interact with in those communities so it's good to see our reach expanding out into other parts of the world.

We've kept the story simple. It remains very simple. What we're doing is we're going to be able to give our shareholders a substantial increase in our gold output. We're going to be able to continue to grow our reserves with these projects. While doing that we will maintain a low political risk profile. We don't want to be everywhere as we say. We can't be everywhere and do our job well so we've been very selective. We'll continue to maintain a strong balance sheet which we've done for many years. That allows us to be aggressive as we develop projects but it also allows us to continue to pay a dividend and as you know we increased that dividend by 50%. That's one thing that Mr. Penna was always sort of pounding away at year after year after year. In years when we really didn't have the money to pay it. We found a way to pay it so we're very proud of that track record and we can see that dividend growing as we go forward.

So we like to keep the story simple. We've achieved some very very significant results in the Company over the last five years. We've seen record cash flows in 2007. We've seen record reserves in 2007, reserves that will continue to grow. We've seen fantastic cost control at the LaRonde operation and in an industry that's seeing large increases in costs, the job that they've done, people really don't realize how successful they have been. Our costs on a per ton basis has only gone up 25% in over four years, and some of our competitors are seeing 25% increases on an annual basis so it's a testament to that group that they've been able to maintain that and we'll talk about that in the quarter.

We've built one new mine, four more to go, 18 months from now we'll have four more new mines, so that's a tremendous achievement but it's really not where you get to, it's what you look like when you get there. What does your capital structure look like when you built your Company and you continue to build it and that's been one of the keys to our success. We've been able to grow in a very quality way without significant dilution to our existing shareholders. As a result, in the last five years, our shares have gone up five times. We pay attention to that, and that will not change as we go forward. We had a significant event this week. We poured the first bar at Goldex and Goldex is a property that we have been involved with since 1971. We have people here that were surveyors underground in the early 70's. In fact earnings share of Paul Penna's nephew, he's standing at the back there, I see you back there, Ernie, he was a surveyor back there in the early '70's so we've got people here that have worked on that project for many many years and that just is an example of how we think about this business. We're very patient. We can wait to get things right and that's what we've been able to do with this deposit and the nice thing about it and the team lead by Yvonne Sylvest has put this into production slightly ahead of schedule and on budget and the deposit is only going to get bigger so it's going to be a big money maker for us when many people thought you'd never see the day when we would extract an ounce of gold from that project so we're extremely proud of what the group has been able to do and we're extremely proud of the entire team so I want to just take this opportunity right now to thank all of our employees here in Canada and Finland and Mexico and the U.S. for making this a great Company. So thank you very much for that.

So in terms of our strategy, it hasn't changed. We're in an industry right now as many of our competitors have said at some of the annual meetings this week, it is not easy. Mine building as we say is not easy. It's very difficult to grow. Fortunately we're in the position where we can see significant output in production, but not just production and cash flow as we move forward and that's also a big part of our story.

But what we're doing is we're really building an entirely new production base. We didn't go out and buy tired old mines. We bought brand new things, brand new deposits so on top of we're building brand new infrastructure, on top of large, wide open deposits, those deposits are surrounded by large property positions. Those deposits have the ability to continue to grow. We haven't even seen the ultimate size of these deposits so we're actively drilling them. They will continue to grow. They will provide us additional opportunities to grow our output, but again, the focus will continue to be on growing production, growing reserves, growing cash flow on a per share basis, and that's been the focus here and that will continue to be the focus as we move the Company forward.

We're going to talk about the gold price. And we're currently in a spot where some people have concern about the gold price, we're in a bit of a soft period. The price has come down from an all-time high of a little over $1,000. Some people are saying maybe that was the top. It's normal for it to retrace. It's actually healthy for it to retrace. In fact if you look back two years ago, gold hit a 26 year high at the time of $730 and it retraced down to the mid 500 's, and then it rebounded and got up to over $1,000 so that's extremely healthy.

We had this quote up last year. At last years annual meeting so this wot is a year old. This quote, Merrill Lynch, the Chief Economist David Rosenberg calling for $1500 gold over a five year period so according to David, there's four more years to go and this quote was put together before we knew about a credit crisis. And that is really what we think is going to continue to drive it. It's not over. How could it be over? How could the Federal Reserve in a matter of 48 hours fix an underlying problem that big? So as our friend John Hathaway says, I should have had his quote on there, he said, "It's the unwinding of previous credit build ups and excesses that fuel investment demand for gold". So we think that's going to be one of the features of this market as we go forward. There's several factors in place that will drive the gold price higher. What we have is strong demand combined with limited supply with the backdrop of economic uncertainty. That's what's going to drive it forward.

Investment demand we will continue to see strong investment demand. There will be continued global economic uncertainty. There will be rising inflation. The reaction of the central banks around the world to this credit crisis has been to inject massive liquidity. They're selling the seeds for inflation down the road and that's a perfect environment for gold. We will continue to see reallocation out of central bank reserves, out of U.S. dollar into gold, and if one of the big central banks decides that's the type of diversification they look to then that would be extremely bullish for gold.

In terms of investment demand, we had gold go to over $ 1,000 and we did not have the vast vast majority of the world's investable dollars in the gold sector. We just have had a small fraction, so there is certainly potential for more investors as we go forward to get involved in this space, but the supply side is also a very important part of the equation and we started to hear from companies in the last little while of how difficult it is to find and build deposits, gold deposits. And in terms of the finding of the deposits, as an industry we're spending more than we've ever spent on exploration. We're still not finding a lot of quality new deposits.

So in an era where mining is under attack around the world, in an era where we're not finding big new quality deposits, in an era where Capital Expenditures and operating costs are rising exponentially, the fact is is mine supply is not going to go up and it's more likely going to decline and we actually think the problem is much more acute than a lot of investors realize about the industry. You can see, how many announcements have we seen where big projects just continue to get pushed out and pushed out and pushed out. It would be an interesting exercise to actually go through and see deposits over the last five years and see how they just keep getting pushed out. Those are deposits that may never get built, so I think all of those arguments are certainly pointing to a bullish market for the gold price.

Let's go through some of the quarter, some of our operating results and then we'll talk about the projects. In terms of the quarter and investment highlights, again we talked about record reserves, we're at 16.7 million ounces, they grew by a third. They will continue to grow. As we said these deposits are wide open. We'll talk about them in a minute. Q1 was another strong quarter in a string of strong quarters since the first quarter of 2004. We met our tonnage objectives, we're producing cost per tons below budget, we'll talk about them in a minute. Good earnings, again good cash flow, over 50 million again. That's what we come to anticipate on a quarterly basis. Cash costs per ounce are negative due to by-product credits. That will continue at LaRonde as we produce those by-product s. Our production has started to increase. We've put Goldex into production. We've poured our first bar as we will see in a minute, we'll see a little video of that pore, and the exploration upside continues.

Not only are we drilling more, but we're gaining more knowledge at the properties and it's one thing that our team, our exploration team lead by Elaine Blackburn has demonstrated over 20 plus years with the Company is they tend to have a real nose for discovering and outlining more ounces, and they get better as they gain knowledge about situations and that's the situation we're in right now. Their knowledge is improving and their access to drill the best targets is improving as we put ramps in at some of these projects so we'll talk about some of the exploration potential.

In terms of our quarter, in terms of the comparison to the budget rather than the quarter prior, the budget was around 2000 ounces higher in gold so we were a little slightly below budget on gold. We were above budget on zink. We're producing slightly more tons than we anticipated but the important thing for us on a cost per ton basis we were about $1 per ton below our expectations so again very good cost performance, so another very steady quarter. As we go forward we're looking for 350,000 plus ounces of production as we bring Goldex into full production, as we start the mine in Finland in September and we'll talk about that, producing gold at very low cost at $50 an ounce and hopefully lower than that given where base metal prices are as we go forward so again, very steady.

In terms of revenues we're up clearly. Our mining, our earnings were up 16%. Our mining profit was up 19% on a per share basis, we have additional shares issued for the Cumberland transaction so our per share earnings were down a bit. In a way, on the earnings side we've been a victim of our own success. We had a larger than anticipated stock option expense in the first quarter not because we gave ourselves a bunch of options. We gave ourselves the same amount of options and in fact just to describe our plan, our plan reaches down probably deeper than most companies, and we need to do that because we need to continue to attract good people and we need to retain the people that have brought us to this point in our success. So with a higher stock price, you get a higher Black Scholes valuation which means higher expense, and that was an impact of the quarter and that's why we're at $0.20 but other than that, good cash flow generation going forward. 300 million in cash, no debt, we have an undrawn bank facility of 300 million. That can be increased if we want, if we do need it, fully diluted under 150 million shares outstanding so we haven't issued a lot of paper over time and that's led to the growth in the per share price.

It comes down to when we look at a map like this and look at our projects it's basically operating and building in three countries with four major mining districts with properties that are wide open. Those properties will drive five new mines, five times growth in annual production in 2010, all good places to operate and the first of those as we said started in terms of pouring its first ounce with Goldex this week, so in order to extract value there we have to spend money on exploration and we continue to do that with a budget that's up from roughly 45 million last year to 65 million this year so all have potential to continue to grow.

Full reserves have grown steadily over many many years. We've done it not only on a gross basis but we've done it on a per share basis as well. We've done a very good job of growing our reserves per share. These deposits all have additional potential to grow in addition to the 16.7 million ounces in reserve, we have 7.5 million ounces of Resource and that Resource meets the economic test we're using the same pricing assumptions, it's a matter of drill density. So as we gain access to these deposits with additional infrastructure, we will tighten up that drill spacing and continue to grow those reserves as we move forward and the expectation is certainly to exceed the 20 million ounce mark given what we know about these project s as we continue to drill them.

The other unique aspect of this is the fact that we feel we own several 5 million ounce deposits, and there's an exploration geologist that works for Newmont, you see some of of his material on the Internet and he's been very up front about how difficult it is to find deposits and according to his research only 4% of the world's deposits exceed 5 million ounces so 1 in 25. We are in a position where two reserve and resource are almost 5 million ounces now, so LaRonde's 5 million we believe we own three 5 plus million ounce deposits out of six and we may in fact have a fourth in Pinos Altos so that's a pretty good solid asset base from a reserve size and potential. That will drive our valuation.

As a result of those deposits being scarce and unique, they're more valuable and it's that quality reserve base that makes this Company attractive. That reserve base drives our production growth. This production profile is only based on reserves. There's not an ounce of Resource in that, based on the 16 plus million ounces of reserve, as we prove up the additional Resource, as we expand the ultimate outline reserve resources in these deposits our reserves will grow and we anticipate the production profile will continue to increase as we move forward.

We're seeing opportunities in Finland. We'll talk about that in a minute, to potentially increase output and we're seeing opportunities currently in Mexico to potentially increase output and we feel we're just getting started at Meadowbank, and we think given the size of that property position, the fact it's only been drilled down to 200 meters combined with the knowledge and experience of our team we think that will continue to grow and we will have potential to add output at the Meadowbank project.

You have to spend money to build these projects. These are in U.S. dollars. We're fortunate as we go forward we've got declining CapEx as we move forward but what we will see, what hasn't gone in our favor is the foreign exchange rate, whether it's a stronger Canadian dollar relative to the U.S. dollar or a stronger euro relative to the U.S. dollar, our U.S. denominated CapEx will increase largely because of the strength of the Canadian dollar and the euro. And we are seeing some cost escalation which is normal in the industry at some of these projects but we have the financial resources to fund this without having to issue equity to build these projects.

Starting with LaRonde, that's the big engine, that's what's been driving this Company for many many years. It continues to put out steady output, generate steady cash. It has 5 million ounces in reserve left, about 1 million ounces in Resource. As you know we're currently building infrastructure to go after that deeper Resource which has a much higher gold grade. We've currently got the shaft down to about level 218 so we're shaft sinking there, the nice thing about the shaft sinking is it's being done by the same contractor and in fact the same crews that have completed successfully the shaft at Goldex and the shaft at Lapa, so we're looking for tonnage from the deeper levels of LaRonde starting in 2012 and that will result in an increase in gold output averaging 340,000 ounces because of the increased grade as we go deeper. There's exploration potential continuing in this belt. IM Gold announced successful results at Westwood. Doesn't surprise us that they're getting those types of results. We own the vast majority of property along that belt and we continue to explore it. We're going to be there for many many years.

At Goldex, as we said we started tonnage through there in the second half of April, poured our first bar this week. That deposit will continue to grow. In fact that outline, there's about 900,000 in Resource in addition to the 1.6 million ounces in reserves so we will mine out more than the 1.6 million ounces of reserves and for the first time in many many years, we're starting to do more exploration to see how big this overall envelope can get. Full production rate we anticipate by September of 2008, commercial production by the middle of this year. Maybe for those on the phone you won't be able to see this little video of the gold pour but we'll just stop for a minute and maybe we can put up a short video on the gold pore at Goldex. (video presentation)

This is something that many people thought would never happen. We had large fund managers tell us for many many years that we wouldn't be able to make this one work. A couple of people always told us it would work. Certainly Paul Penna was a big fan of this but [Wenzel Hubacheck] (inaudible) said you're going to make a lot of money here one day, just be patient and that's what the team did. So it was 762 ounces I think, Yvonne? 782. That's better. So that's the first of many. There we go.

There's also another mine we're building in Quebec and that's very close to LaRonde, it's 11 kilometers away and that one we're doing lateral development there now, developing the ore body for the start of production in the middle of next year. That one has been a bit of a challenge, as we've gotten underground and moved to the West, we've had the lens, there are two lenses, that's required more development. We've had about a six-month delay in the delivery of some of the equipment so as we announced early last year, that one is middle of 2009 but it has a potential to continue to get bigger and our team is doing an exceptional job developing that ore body and again given its proximity to LaRonde we'll be shipping directly to LaRonde and it's one of those deposits we'll make a lot of money from given its proximity to LaRonde and the synergies are available.

In Finland we continue to move forward for start of production concentrate in August and then running that through September through the autoclave. So that timeline is still in place, we've used up some of that cushion on our timeline as we move forward on that project but it continues to grow. The challenge with this one is that with a reserve of 3 million ounces and an additional 1.7 in Resource, our production rate does not match the size of the deposit at 150,000 ounces that mine life is too long and that doesn't include the material that we're outlining below 600 meters. We continue to drill that interval between 600 and 1,000 meters below surface. We continue to get very good intersections. That's suggesting that this deposit will grow to nicely beyond 5 million ounces so that's a good problem to have, that's likely going to involve new infrastructure, probably something like a shaft so we've got our team looking at in the early stages of studying the various options there.

So this was one that we acquired for $150 million and ultimately, it will be a 5 million ounce deposit, so we transacted at the right time and that was a credit to our team making the assessment they said this will continue to grow and it uses to grow and it will be a big money maker. Here is a sense of some of the drill holes below 600 meters, below the existing reserve Resource, the reserve is in orange, the blue is the Resource and the orange and blue on there are total 4.7 million ounces, so as we drill below, if we pick up lenses that are similar to what we're seeing in the upper part of that structure, then you could see a significant bump in the size of this deposit resulting in our ability to likely increase the throughput there.

In Mexico, another good transaction for us, we paid 80 million for this project. It again has continued to grow. It's 2.5 million ounces of reserve, another 900,000 in Resource, so about almost 3.5 million ounces reserve and Resource, there's over 70 million ounces of silver Resource and construction is ongoing. We anticipate production in the third quarter of 2009. We continue to drill it. It continues to remain open and we're seeing good drill hole as we move forward to the West of Santo Nino and the Cerro, Colorado area so the main structure which contains the main reserve Resource is tell wide open and we're putting down an exploration ramp, a production ramp. We started drilling in the Santo Nino pit a couple of weeks ago, we saw the drills down there when we were down there so everything is full steam ahead on that project.

Here is a new area which we've been drilling since November of '06. It's 400,000 ounce Resource, it's flat lying resources that follows the topography, we're doing a scoping study on that to see whether that lends itself to a separate standalone operation, we're doing metallurgical test work there as well. It appears to be open to the East, we're drilling in the Northeast sector there. Not sure if we have, no, we don't have the cross section here, but it is open, and it's open to the East and we've got two drills under the guidance of Roge Ducet who is here and our team is excited about the potential for that to continue to grow.

Our last project is Meadowbank. We've owned that for about a year, in the first year partial year of drilling the reserves grew 20%, the 3.5 million ounces of reserves there's another 1.4 million ounces of Resource. There's almost 50,000 Hectares of property there. There are a lot of targets that need to be followed up. We've doubled the drill footage, we've doubled the prospecting budget. We've got a full season of drilling. We certainly expect that deposit to continue to grow. In the first four years of production, we're looking for average output in the 430,000 ounce range at good cost and life of mine we're looking at about 360,000 ounces. We're looking for production January 2010.

Again, another big project, it will be our biggest from duster at least from what we can see right now and again, we feel that we can continue to grow that deposit as we drill it and here is a look at the reserve and Resource in orange as the reserve and blue is the Resource and we're drilling in those target areas outlined in the box. We'll move Northeast along that same trend. It's an iron formation. We've been adding property in that region. We've got other targets along the iron formation that we'll be drilling, we've got a bunch of geophysical targets that are suggesting that there's potential separate and distinct trends similar to this, one big trend we will be drilling this year as well so our exploration team is very excited about the possibilities here.

So just to summarize, we've got industry leading growth in terms of production. Our reserve base is strong, it continues to grow. We're looking for a fivefold increase in production between 2007 and 2010. We've got the potential for several 5 million ounce deposits, so when we started on this mine building program, it sort of seemed quite a bit far away, but within two years, we will have five new mines running. We will be producing in excess of 1.3 million ounces of low cost gold production. Our reserve base will be over 20 million ounces of gold. We will own several 5 million ounce deposits. We will be paying a bigger dividend. We will be contributing strongly to the communities that we operate in and we'll just be continuing to build a bigger version of a great mining Company. So on that I'd like to turn it back over to Jim and thank everybody for their support. Thank the Board for the support and certainly the shareholders for their long time support over many years. Thank you.

Thanks very much, Sean. I'd now open the floor to questions if you want to identify yourself as a shareholder or proxyholder, please stand and state your name clearly and we welcome your questions.

Okay, my name is [Paul Vernon]. Is it possible to look at Number 12? Back to Number 12?

That's the gold production growth. The numbers are in the lower right hand corner. The industry leading gold production growth. Yes, okay, I was told there are only two women who work in a stock brokerage firm, [Rosie Scenario] and [Paulie Anna].

I see that we've got a little bit of a hiccup there in 2012 in production and then 2014 through 2017 total production falls. Now, maybe you don't want to talk that far out about exploration because it's hard to quantify it, but those years will come. They're a little way off but they will be here. So are you going to walk across Bay Street and buy somebody out or what are you going to do?

In the presentation, this is strictly based on our and does not include an ounce of Resource. There are production profiles out there from some of our competitors that include not only Resource but projects they don't even have feasibility studies so we're conservative in terms of how we lay out our production profile. Added to that I don't think there's a Company out there that has put out a 10 year production forecast and we put it out so our expectation is that as we prove up and convert additional 7.5 million ounces, that will allow us to fill out those years and that does not include any of the material that we think that we're going to find in places like Finland, certainly in Mexico, and potentially at Meadowbank, so we feel there will be internal growth opportunities on top of what we have posted up there on the green, on the a acquisition side, our story is not dependent on making large acquisitions. We will continue to look at things, we're in that fortunate position where we don't have to rush and we don't have to take our time and wait for the right opportunity to come our way. So we would not trade our position with anybody else.

Thank you, any other questions?

Want me to repeat that?

Yes, please.

Okay, regarding energy supply in Finland, I hope in no way he can have any effect on that, but comments?

Oh, we have a long term contract and a supplier based out of Rovakai and we do not foresee any issues with electrical supply whatsoever and neither do we see any issues with the diesel fuel, et cetera. So we don't believe it is an issue.

Thank you, any other questions?

(inaudible - microphone inaccessible)

It's all liquid as we've said before there's no asset backed paper there at all so we have a small marketable security position from smaller companies but small relative to our overall balance sheet.

Thank you. Any other questions?

Yes. (inaudible - microphone inaccessible)

We've talked about it and haven't come to any definite conclusion on that. We've had people actually, one of our Advisors has done a study for us that came to the conclusion that it doesn't really add a lot of value to do it. Optically it it may look good, but no guarantee that it's going to add any value to it. If you look at the big number, but it's that way for a reason.

Any other questions?

Over here. (inaudible - microphone inaccessible)

(technical issues) Thank you. Other questions?

That's it. Okay, folk, Oh, go ahead. There's one there. Go ahead. Well give you the microphone so we can hear you.

(inaudible - technical issues)

Thank you. Anymore? Anymore questions? Okay that's it. I just have a few brief words. We had the delegation here from Nunavook and our experiences over the last short while actually last May million today when we arrived in Nunavook were we were almost devoid of staff, we let our own people in and as you heard we finished the road, we're well on the way, the project is well on the way, but more than project building and mine building we're interested our social responsibility of these communities and some nice little things have happened David, I'd like to add to that when we met with the Arctic College last year they had hope and now they have reality and they have jobs. We were up there recently in April, the first week of April we sat with the Department of Education and they were to train heavy equipment Operators. We have 160 men on the site presently. We need 60 heavy machine Operators, heavy equipment Operators for this month and we need another 120 to follow, 160 men on the site and when we're through with that project we'll need 500 men extracting the gold and running the operation. So there's a great future there. We've been in the Abatibe for 50 years and we'll be there for another 20 and maybe another 50 so I see us with the way things are going on a long term basis in Nunavook for at least 30 years or more and we're not there just to, we're there to make it a good place and leave it a better place but we won't be leaving for a long time.

We had a meeting with the Commissioner of Nunavook, and this is part of our social responsibility Anne Hanson for the folks that don't know and I didn't is that the commissioners are representative of the queen, she's akin to our governor general and she's very kind to give us the time and her thoughts were that we're going to offer scholarships to the URTS she graduated from, the Cadian Institute, it's an international institution connected to St. Frances Xavier University, They're in 164 countries and they offer leadership programs in various sundry other things right to a degree, so Ann has kindly agreed or Mrs. Hanson or the Commissioner has agreed to sit on a selection committee and we're going to choose people as Mike who is connected to the arctic college, we're going to select students and send them to the University and bring them back and hopefully make a lasting contribution to that community. Presently, the numbers come out of the Board meeting yesterday was very pleased. There's another workforce at Baker Lake presently. There's 37% of our workforce is Inuit and we're very grateful for that, very proud to do that and that will grow and their skills will grow and we want to become an integral part of that community.

And this is not to boast but I just have to mention this, we've been in Mexico a short time and we're acknowledged by the Mexican Government as a socially responsible Company. That's four out of 200 companies and this was granted to us by the Mexican Government and the (inaudible) award in Quebec as of this year, that's for sustainable development. The North Korea (inaudible) award as the best Company, to work for in Quebec and we asked, you mean in the mining business and they said no, the best Company to work for in Quebec. And I shouldn't -- I'd be remiss if I didn't mention this, Eagle is not their long suit but the Northern Miner awarded the two gentlemen, Mr. Boyd and Mr. Sherckus the mining men of the year and I think that deserves a little round of applause.

If you aren't blushing over that well, I would be very surprised because that's a modest air so anyway that's how we feel, and it's important to us and we talked about that John Todd when we sat down the first time the Minister of Finance wherever he is here, John, we had that conversation and we're not wavering. We're going to continue but it's not only there it will be in the Mexico and they will be offered the same academic opportunities assigning people in Rockland, wherever we are we have a responsibility and we're there to say and we're there to make it a better place while we're there and after we leave and I thank you all for coming. It's time for lunch, enjoy yourselves. Thank you.

(Applause)