Agnico Eagle Mines 2026 Q2 Earnings Call

Thank you, operator. Good morning, everyone, and thank you for joining our Agnico Eagle second quarter 2026 conference call. I'd like to remind everyone that we will be making a number of forward-looking statements. Please keep that in mind and refer to the disclaimers at the beginning of this presentation. Next slide, please. My colleagues and I are pleased to report another strong quarter with not only record free cash flow generated by our operations, but also record capital returns to our shareholders. Gold production of 856,000 ounces was, for the second consecutive quarter, above budget, with cash costs and all-in sustaining costs both within our guidance range. This is not a small accomplishment in a quarter where oil traded above $100 per barrel for much of the time.

As you'll hear on this call, the business is strong and we continue to move towards creating substantial additional value for our owners. This quarter, we're reporting solid operations, excellent progress on our growth pipeline, continued exceptional exploration results, all with yet another quarter of record financials. My team will go through all of this in more detail, but let me outline and summarize what I believe are the key messages that are important to take away from this call. The first key message is that we continue to work hard every day, not only to deliver what we promise, but also to continue to take every opportunity to improve our business, step by step, quarter by quarter. For example, this quarter, I'm pleased to highlight that at Macassa, we had record skipped tons, record mill throughput, and the first processing of our AK4 at LZ5.

At Detour, record total mine tons, and record daily mill throughput. At Meliadine, record mill throughput. At Kittilä, record mill throughput. Individually, these may seem like small accomplishments, but when we step back and when we look at the big picture collectively, this quarter, we've had record mill throughput at mines representing slightly more than half of our total production. In and of itself, record mill throughput at half our mines represents substantial continuous operational improvement. The real message we want to convey is that these improvements are an illustration of the culture and the dedication of our teams. A culture of commitment to always do the best they can and then to look to do even better, even when things are going well, even when gold prices are high, and even when we're delivering record financial returns to our owners.

I have to tell you sincerely, as a CEO, that makes me very proud. To be sure, mining is a challenging business and Agnico Eagle is not immune to these challenges. For example, on July 1st, we had a rock movement in the wall of our Barnat pit. Of course, this was a disappointment, but I am proud of our team and importantly, of our systems and our processes, including the systems and processes we had in place to track potential wall movement that allowed us to move quickly to protect both our people and our equipment. The safety of our people remains the most important thing always.

I'm proud that within 24 hours of the event, we had a good understanding of its impact. We were able to communicate to our owners and to the market that we are still able to forecast 2026 production within our original guidance range of 3.3 million-3.5 million ounces, albeit toward the lower end of that range. Agnico Eagle is not immune to the challenges common to our businesses. We have a long and demonstrated history of managing these challenges well. We have a long and demonstrated history of recovering from these challenges quickly. The second key message I want to convey this morning is that we continue to aggressively reinvest in our business into projects that deliver exceptional returns at relatively lower risk. In many cases, we're well ahead of schedule.

We've announced the go-ahead of our Hope Bay mine. This will be a world-class, low-cost mine producing between 400,000-450,000 ounces a year that we expect to happen for decades. We had the opportunity to tour this project with our board a few days ago. While we're all impressed with the very real and substantial progress, I think what really stood out was the excitement of the team regarding the potential on these two 80-kilometer greenstone belts. We really are just starting to scratch the surface of the potential at Hope Bay. Dom and Natasha will spend some time talking about continued progress in moving both Malartic and Detour to 1 million ounces of yearly production and moving forward on Upper Beaver, another high quality, low cost, brand new mine in our backyard.

Jani, who runs our Northern European business, will talk about our recent consolidation of what our team believes to be the most prospective exploration belt in the Nordic region. His team's plans to more than double that business to over 500,000 ounces of yearly production. We're making excellent and steady progress on our target of increasing production by up to 20%-30% over the next decade. That target was before the Finland land consolidation. We have the strongest pipeline in our history. We have the strongest pipeline in the business. There is more to come. We're only in the third or fourth inning here. We remain long-term bullish on gold. We remain heavily focused on steadily increasing gold production per share for years and for decades to come. The third key takeaway is, again, continued exceptional exploration results.

Exploration is the lifeblood of our business. Guy will spend some time going over some exciting holes that are both confirming and expanding our key mines and our organic growth projects. As Jamie, our CFO, likes to say, we're in a gold price environment where with strong operating performance and with good cost control, we're able to do it all. We're able to reinvest in our business to support the best organic growth in the industry. This quarter, we invested over $800 million in advancing key projects and in capitalized exploration. This quarter, we're able to opportunistically pursue strategic M&A opportunities that add value per share and that improve the quality of our business. This quarter, we consolidated the best land package in Northern Europe, including using almost $600 million in cash. We continue to strengthen the balance sheet.

In the second quarter, we added over $350 million of cash to reach a record $3.5 billion of cash on hand. All of this while delivering another record quarter of returns to our shareholders. In the second quarter, we delivered $625 million to our owners between our dividends and our $400 million of share repurchases. Second quarter of 2026 has been volatile. Volatile geopolitically, volatile economically, and certainly volatile gold prices. Even in this environment, our team was able to deliver the steady, reliable performance that Agnico Eagle is known for, delivering solid results across the business. Before I turn this call over to the rest of our team to talk about this in more detail, I need to spend a moment to talk about the very sad fatality we had since our last call.

Daniel Giroux, partner of Michelle and father of two teenage girls, tragically lost his life while on the job on May 1st. Every fatality is devastating, not only to the families involved but to all the people they've touched in their lives, including friends and colleagues here at Agnico Eagle. In the almost 70 years of operation from 1957 to today, we've had a total of 23 fatalities, and three of these have occurred in the last year. I will repeat what I said last quarter, fatalities, every single one is not acceptable. I want to assure all of you, and more importantly, I want to assure all of our people who come into work every day working hard for the company, that we are more focused on safety than ever before. Taking care of all of you remains our number one responsibility.

Again, with great emphasis, there is nothing more important than the safety of our people and of our communities. I'll now ask Jamie Porter, our CFO, to discuss our Q2 financial results.

Thank you, Ammar. This was another solid quarter for Agnico Eagle, reflecting our high-quality asset portfolio, solid operational execution, and continued leverage to the gold price. Strong operational performance and disciplined cost management, combined with a favorable gold price environment to drive record free cash flow of over $1.3 billion for the quarter. We also delivered excellent financial results, generating adjusted net income of approximately $1.5 billion or $3.07 per share, and adjusted EBITDA of approximately $2.7 billion. Gold production was ahead of plan at 856,000 ounces, reflecting a very strong finish to the second quarter. This outperformance was led by Detour Lake, Kittilä, and Fosterville, reflecting the benefits of continuous operational improvement at these sites. We are extremely proud of the work of our teams who remain focused on productivity initiatives, operational optimization, and disciplined cost control. These efforts translate into another quarter of solid cost performance.

Total cash costs were $1,054 per ounce, and all-in sustaining costs were $1,459 per ounce. Below our costs in the first quarter, below the midpoint of our guidance ranges, and hundreds of dollars below the industry average. This cost control is particularly impressive given the inflationary pressures we're seeing across the industry. Overall, our business continues to demonstrate the consistency and resilience that have long differentiated Agnico Eagle, allowing us to translate strong gold prices into record cash generation and record shareholder returns this quarter. If we turn to slide five, we remain in the strongest financial position in the company's history. Our strong balance sheet and record cash generation allows us to maintain a balanced and disciplined approach to capital allocation, creating value through shareholder returns, investment in future growth, and continued financial strength.