Agnico-Eagle reports Q2 2010 results; record quarterly revenue, net income
and gold production

Stock Symbol: AEM (NYSE and TSX)

(All amounts expressed in U.S. dollars unless otherwise noted)

TORONTO, July 28 /CNW/ - Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") today reported a record quarterly net income of $100.4 million, or $0.64 per share, for the second quarter of 2010. This result includes a non-cash foreign currency translation gain of $17.4 million, or $0.11 per share, as well as a one-time tax recovery of $21.2 million, or $0.14 per share. The result also includes non-cash stock-based compensation expense of $8.1 million, or $0.05 per share. In the second quarter of 2009, the Company reported net income of $1.2 million, or $0.01 per share. A 116% increase in gold production and a 151% increase in gross mine profit over the second quarter of 2009 contributed to the record financial and operating quarter.

Second quarter 2010 cash provided by operating activities was $161.6 million (including an increase in working capital of $16.7 million), up from cash provided by operating activities of $26.4 million in the second quarter of 2009 (which included a decrease in working capital of $27.4 million). This significant increase was largely due to gold production that was more than double that in the comparable period in 2009 and substantially higher prices for gold, zinc, silver and copper.

"Our record quarterly financial results were driven by record gold production as all six of our mines operated throughout the quarter for the first time. Four of the mines are now operating at steady state with the other two in the late stages of optimization," said Sean Boyd, Vice-Chairman and Chief Executive Officer. "Further increases in gold production and lower cash operating costs are expected in the second half of 2010 as we continue to optimize all our mines and focus on driving down the unit costs at our Kittila and Meadowbank mines," added Mr. Boyd.

    
    Second quarter 2010 highlights include:

    -   Record Gold Production, Record Revenue and Record Net Earnings -
        quarterly gold production of 257,728 ounces resulted in revenue of
        $353.9 million and net earnings of $100.4 million
    -   Good Cost Control Continues at Steady State Mines - minesite costs
        per tonne continue to be on target at; LaRonde, Goldex, Lapa and
        Pinos Altos.
    -   Improved Available Liquidity - during the quarter the Company
        executed a new non-amortizing, unsecured $1.2 billion revolving
        credit facility through a syndicate of banks. The Company also issued
        $600 million of unsecured long-term notes which was used to reduce
        amounts outstanding under the credit facilities.
    

Payable gold production(1) in the second quarter of 2010 was a record 257,728 ounces at total cash costs per ounce(2) of $487. This compares with payable gold production of 119,053 ounces at total cash costs per ounce of $326 in the second quarter of 2009. The increase in total cash costs per ounce in the second quarter of 2010 is mainly due to the high costs at Meadowbank ($663/oz) as the mine moves through start-up and commissioning. Total cash costs are expected to decline as the mining and processing rate increases and gold output grows towards steady state levels.

For the first six months of 2010, payable gold production was a record 445,960 ounces at total cash costs per ounce of $469. This compares with payable gold production of 210,864 ounces at total cash costs per ounce of $320 in the first half of 2009. The increase in gold production is due to the impact of four new gold mines commencing operations in the past 14 months. The increase in total cash costs per ounce in the first half of 2010 is mainly due to the high costs at Meadowbank ($695/oz) as stated above.

For the full year 2010, gold production is still expected to be in line with previous guidance of between 1.0 and 1.1 million ounces.

Total cash cost per ounce guidance of $399 was provided on December 16, 2009. This was based on projected gold production of 1.057 million ounces and the following assumptions:

    
    Silver ($/oz) 14.00
    Zinc ($/lb) 0.82
    Copper ($/lb) 2.77
    C$/US$ 1.10
    US$/Euro 1.40
    

Applying current spot rates for these factors would result in total cash cost estimates of approximately $420 per ounce. Based on the higher operating costs experienced at Kittila and Meadowbank during the commissioning phase in 2010, the Company expects that its full year total cash cost per ounce is likely to be in the range of $425 to $450.

Second Quarter 2010 Results Conference Call Webcast

The Company's senior management will host a conference call on Thursday, July 29, 2010 at 11:00 AM (E.D.T.) to discuss financial results and provide an update of the Company's exploration and development activities.

Via Webcast:

A live audio webcast of the meeting will be available on the Company's website homepage at www.agnico-eagle.com.

Via Telephone:

For those preferring to listen by telephone, please dial 416-644-3415 or toll-free 877-974-0445. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.

Replay archive:

Please dial 416-640-1917 or toll-free 877-289-8525, passcode 4328627 followed by the number sign.

The conference call replay will expire on Thursday, August 5, 2010.

The webcast along with presentation slides will be archived for 180 days on the website.

New SVP Finance, Chief Financial Officer

The Company is pleased to announce that Mr. Ammar Al-Joundi will be joining Agnico-Eagle as of September 1, 2010 in the position of SVP Finance and Chief Financial Officer.

Mr. Al-Joundi has over 20 years of experience in finance on both the corporate and banking sides. Most recently Mr. Al-Joundi was with Barrick Gold Corporation where he had spent the previous 11 years in progressively more senior roles including: VP Treasurer then SVP Finance for Barrick Gold Corporation; Executive Director and CFO for Barrick South America; and finally SVP Capital Allocation and Business Strategy for Barrick Gold Corporation.

Mr. Al-Joundi is a graduate of the University of Toronto in Mechanical Engineering and has a MBA from the University of Western Ontario. Ammar is also a Professional Engineer.

Cash Position Remains Strong - Credit Facility Restructuring Provides Additional Liquidity

Cash and cash equivalents increased to $152.8 million at June 30, 2010 from the March 31, 2010 balance of $118.1 million. The large increase in gold production and its associated effect on revenues, net income and cash flows were mainly responsible for the increase.

Capital expenditures in the second quarter of 2010 were $117.0 million, including $33.9 million at Meadowbank, $28.2 million at Pinos Altos, $22.8 million at LaRonde, $16.6 million at Kittila, $10.6 million at Lapa and $4.7 million at Goldex.

For 2010, capital expenditures are estimated at $500 million, up from a previous estimate of $478 million. The additional capital is being spent at Meadowbank and Kittila to make improvements to the process plants and accelerate the purchase of mining equipment.

With its cash balances, anticipated cash flows, available bank lines and increased debt capacity, Agnico-Eagle remains fully funded for the development and exploration of its current pipeline of gold projects in Canada, Finland, Mexico and the USA.

During the second quarter of 2010, the Company executed an amended non-amortizing, unsecured $1.2 billion revolving credit facility, maturing June 2014. This facility replaces both pre-existing unsecured tranches of the Company's credit lines. The new facility is being provided by a syndicate of international banks.

Available credit lines under the amended facility as of June 30, 2010 were more than $1.0 billion.

LaRonde Mine - Steady State Mine Continues Strong Performance

The 100% owned LaRonde mine in northwestern Quebec, Canada, began operation in 1988. Proven and probable gold reserves at LaRonde total approximately 4.8 million ounces from 34.4 million tonnes grading 4.4 grams per tonne ("g/t").

The LaRonde mill processed an average of 7,254 tonnes per day ("tpd") of ore in the second quarter of 2010, compared with an average of 7,212 tpd in the corresponding period of 2009. LaRonde has been operating at a steady state of approximately 7,000 tpd for approximately seven years, since its most recent expansion in 2003.

Minesite costs per tonne(3) were C$79 in the second quarter of 2010, compared to C$74 in the second quarter of 2009. The rise in minesite costs was largely due to a higher proportion of expensed versus capitalized underground development during the second quarter of 2010. Typically stope development is expensed while permanent development is capitalized.

For the first half of 2010, minesite costs per tonne were on budget at C$75 as the higher proportion of expensed development in the second quarter of 2010 balanced out the lower proportion in the first quarter of 2010. For the first half of 2009, the minesite costs per tonne were C$73. The increase is largely due to general cost inflation.

Net of byproduct credits, LaRonde's total cash costs per ounce were $270 in the second quarter on production of 41,533 ounces of gold. During the second quarter of 2009, total cash costs per ounce were $109 on production of 58,034 ounces of gold. The increase in total cash costs is largely due to the lower gold production. This lower production was due to an expected decrease in gold grade for stopes mined in 2010. Additionally, an unfavourable swing in the CAD/USD exchange rate during the period had the effect of increasing total cash costs. Somewhat offsetting these factors were higher byproduct metals revenues.

For the first six months of 2010, LaRonde's total cash costs per ounce were $216 on gold production of 86,569 ounces, as compared to the first half of 2009, when the total cash costs per ounce were $196 on production of 109,372 ounces of gold. The higher total cash costs were largely due to the lower gold production and stronger Canadian dollar, partly offset by higher byproduct metals revenues, as above.

Commencing in late 2011, when the Company expects to begin mining ore from the LaRonde Extension, LaRonde is expected to begin producing more gold, averaging 324,000 ounces of gold per year through 2023, reflecting the higher gold grades at depth, where the deposit remains open. The development of the LaRonde Extension remains on time and on budget.

Goldex - Strong Production and Cost Control Continue

The 100% owned Goldex mine in northwestern Quebec began operation in 2008. Proven and probable gold reserves total 1.6 million ounces from 24.7 million tonnes grading 2.0 g/t.

The Goldex mill processed an average of 7,327 tpd in the second quarter of 2010, continuing to exceed the 2010 mine plan of approximately 6,900 tpd. During the second quarter of 2009, the plant processed 6,875 tpd. Minesite costs per tonne at Goldex were approximately C$24 in the second quarter of 2010, in line with the C$24 per tonne achieved in the second quarter of 2009.

Payable gold production in the second quarter of 2010 was 48,334 ounces at total cash costs per ounce of $324. This compares favourably to the second quarter of 2009 when gold production was 35,645 ounces at total cash costs per ounce of $365. The higher ounce output is largely due to the resumption of mining from the higher grade portions of the orebody.

For the six month period ended June 30, 2010, total cash costs at Goldex were $348 per ounce on gold production of 90,603 ounces. Total cash costs per ounce during the comparable six month period in 2009 were $352 on gold production of 71,604 ounces. The improvement in production and costs continues to reflect optimization of recoveries and throughput at the Goldex mine.

Life of mine average annual gold production is expected to be approximately 168,000 ounces per year through 2017.

The expansion of the mine from 6,900 tpd to 8,000 tpd was approved in 2009. An increase in the mining rate has been realized earlier than anticipated as development of the orebody is ahead of schedule. Goldex should be able to achieve the higher rate on a steady state basis in the fourth quarter of 2010 with only minor modifications to the mill to support the higher throughput.

With Goldex operating at steady-state, and the final production blast for the current orebody scheduled for late 2010 (to be followed by approximately seven years of extraction), the focus has shifted to exploration and potentially extending the mine life by adding nearby zones, such as the "M", "E" and "S" zones, into the mine plan.

Additionally, Agnico-Eagle recently entered a purchase and option agreement to explore Adventure Gold Inc.'s Dubuisson project located immediately west of Goldex. Up to $4 million is expected to be spent on this property over a period of five years from the effective date of the agreement. If Agnico-Eagle exercises its options, the Company may acquire up to 70% of Dubuisson.

Lapa - Strong Tonnage and Cost Performance Continue

The 100% owned Lapa mine in northwestern Quebec achieved commercial production in May 2009. Proven and probable gold reserves total approximately 0.8 million ounces from 3.2 million tonnes grading 8.2 g/t.

The Lapa circuit, located at the LaRonde mill, processed an average of 1,523 tpd, compared to 895 tpd in the partial second quarter of 2009. This throughput is slightly higher than the design rate for the mill of 1,500 tpd and reflects results of continued optimization efforts at the mill.

Minesite costs per tonne were C$118 in the second quarter of 2010, well below the C$149 incurred in the second quarter of 2009. This reduction in cost reflects the optimization and efficiencies which have been realized since the May 2009 start-up. Specifically, mine personnel have been successful in increasing the throughput to offset the higher dilution underground.

Payable production in the second quarter of 2010 was 28,927 ounces of gold at total cash costs per ounce of $545. This compares to 11,603 ounces of gold at total cash costs per ounce of $948 during the partial second quarter of 2009.

For the six month period ending June 30, 2010, total cash costs at Lapa were $516 per ounce on gold production of 60,480 ounces. This compares with gold production of 11,603 ounces at total cash costs of $948 in the partial first half of 2009. This production increase and unit cost decrease is largely due to improved throughput and its associated efficiencies.

Life of mine production is expected to be approximately 115,000 ounces of gold through 2015.

An underground exploration program to the east and to the west of the Contact zone has begun. The goal is to transfer additional resource into reserves and to further test the favourable Cadillac Break gold belt, especially to the east.

Kittila - Mill Optimization Beginning to Show Results

The 100% owned Kittila mine in northern Finland achieved commercial production in May 2009. Proven and probable gold reserves total approximately 4.0 million ounces from 26.0 million tonnes grading 4.8 g/t.

The Kittila mill processed an average of 2,412 tpd in the second quarter of 2010, compared to 1,980 tpd in the second quarter of 2009. While getting closer to the design rate of 3,000 tpd, the throughput in the second quarter of 2010 was negatively affected by a longer than expected scheduled maintenance shutdown in the processing plant in the first quarter (which lasted until April 10), as well as maintenance work on the oxidation scrubber for three days in June.

Gold recoveries in the second quarter of 2010 averaged approximately 68%, down from the 71% achieved in the first quarter of 2010. The lower recoveries were largely due to a series of process changes that were implemented in the second quarter of 2010. However, these changes are expected to lead to improving recoveries over the next several quarters as further optimization is undertaken in the plant.

Recoveries have improved significantly over the past several weeks largely due to the control and reduction of the chloride compound levels in the autoclave. Since the implementation of the chlorine reduction process, recoveries have averaged 74% in June and the average has exceeded 81% during the 40-day period ending July 27. The design rate of 83% mill recovery is expected to be achieved on a steady state basis by the end of 2010.

Minesite costs per tonne at Kittila were approximately (euro)64 in the second quarter, in line with the (euro)64 achieved in the first quarter of 2010. In the second quarter of 2009 (partial quarter as the mine was declared commercial in May), minesite costs per tonne averaged (euro)43.

The increase in minesite costs is largely due to the increased use of contractors and autoclave repairs. Due to limited equipment availability, additional contract labour was required in both operations and maintenance. The autoclave repairs, which carried over into the second quarter of 2010, reduced this quarter's mill availability to 78% (down 7% from the first quarter). In 2011, minesite costs per tonne are expected to fall as throughput increases in the plant and as optimization of the mine continues.

Second quarter 2010 gold production at Kittila was 31,593 ounces at total cash costs per ounce of $607, compared to 13,771 ounces at cash costs per ounce of $658 in the partial second quarter of 2009. Approximately half of the second quarter 2010 gold production was realized in June, reflecting the greatly improved milling performance.

For the six month period ending June 30, 2010, total cash costs at Kittila were $663 per ounce on gold production of 56,140 ounces. This compares with gold production of 18,285 ounces at total cash costs of $658 in the partial first half of 2009. This production increase is largely due to higher mill recoveries and improved throughput.

Total cash costs per ounce are expected to decline as gold output increases in the second half of 2010 due to the increased processing rate and improved recoveries.

During the second quarter, the first underground stopes were mined. Total underground production is expected to account for approximately 10% of Kittila's 2010 production. Dilution levels, to date, have been better than expected.

Life of mine average gold production is expected to be approximately 150,000 ounces per year through 2032.

A study is underway examining the possibility of increasing the production rate at Kittila reflecting the continued growth of the reserve base. Following the successful optimization of the mill recoveries, and further drilling at depth and to the north of the main Suuri deposit, it is anticipated that the expansion study will be completed by the middle of 2011.

Pinos Altos - Ramp-up Continues with Improved Results. Additional Filter Capacity Expected in Q3

The 100% owned Pinos Altos mine in northern Mexico achieved commercial production in November 2009. Proven and probable reserves, including the stand-alone Creston Mascota deposit, total 3.4 million ounces of gold and 94 million ounces of silver from 42.0 million tonnes of ore grading 2.5 g/t of gold and 69 g/t silver.

The Pinos Altos mill processed an average of 3,575 tpd in the second quarter of 2010, representing a significant improvement over the prior quarter (2,584 tpd) as the ramp up to the design rate of 4,000 tpd continues. Additional tailings filtration capacity is expected to be installed during the third quarter of 2010 which should enable a proposed increase in throughput.

Minesite costs per tonne were below budget at $31 in the second quarter of 2010, compared to $34 in the prior quarter. No comparable period exists in 2009 as the mine achieved commercial production in November.

The first underground mining blocks were extracted as expected in the second quarter of 2010. A 13,000 tonne underground stope was extracted which confirmed the block model in terms of grade and dilution. The paste backfill system has been commissioned and is fully operational.

Payable production in the second quarter of 2010 was 29,665 ounces of gold at total cash costs per ounce of $415. This compares favourably with the prior quarter which had payable gold production of 26,228 ounces at total cash costs per ounce of $436 (there is no comparable second quarter or six month period in 2009 as the mine achieved commercial production in November).

For the first six months of 2010, payable gold production was 55, 893 ounces at total cash costs of $425 per ounce.

Life of mine average gold production is expected to be approximately 170,000 ounces per year through 2028, including production from Creston Mascota. Over this period, annual silver production is expected to average 2.5 million ounces.

Civil works and mechanical construction activities have commenced at the nearby, stand-alone, Creston Mascota project which is expected to achieve commercial production in the second quarter of 2011.

Further exploration is underway and the Company is anticipating the eventual development of several other satellite deposits on the Pinos Altos concession package which could include the Sinter, Cubiro and San Eligio zones.

Meadowbank - Tonnage Ramp-Up Continues

The 100% owned Meadowbank mine project in Nunavut, Canada, achieved commercial production in March 2010. Proven and probable gold reserves total 3.7 million ounces from 32.2 million tonnes grading 3.5 g/t.

During the second quarter of 2010, the Meadowbank mill processed an average of 6,262 tpd, with several days in June exceeding 9,000 tpd.

However, since the February start-up, unit costs have been negatively impacted by harder ore, less than optimal fragmentation from the pit and a different particle size gradation from the crusher than expected. To solve these issues the Company is installing a permanent secondary crushing unit in the front end of the circuit, similar to the solution adopted at Goldex. However, this has negatively impacted both capital (as previously discussed) and operating cost estimates for the mine in 2010. This secondary crusher should be installed and be operational in the first half of 2011. In the meantime, a portable crushing unit is being used.

Minesite costs per tonne were higher than planned at C$94 in the second quarter of 2010, due to the increased costs associated with; the replacement of some major components, the installation and use of a portable crusher, logistics, and additional use of contractors. A portable crusher was installed in the second quarter which is expected to help facilitate higher throughput and lower minesite costs per tonne in the second half of 2010. Longer term it is anticipated that a permanent crusher will be added.

Payable production during the second quarter of 2010 was 77,676 ounces of gold, at total cash costs per ounce of $663. During March 2010, gold production was 18,599 ounces at total cash costs of $840 per ounce. The total cash costs are also expected to decline during the remainder of 2010 as the mine and mill operations are optimized and gold production increases.

Gold production in 2010 is expected to be approximately 300,000 ounces. Life of mine average annual gold production is expected to be approximately 350,000 ounces through 2019.

A study examining the possibility of increasing the production rate at Meadowbank is partially complete. The study was scheduled to be completed in 2010. However, due to ongoing optimization efforts, the study is being delayed until the mine reaches steady state and further underground drilling is completed.

Meliadine Acquisition Complete, Exploration Program Begins

Subsequent to quarter end, on July 7, 2010, Agnico-Eagle completed the acquisition of 100% of the Meliadine gold property (through the acquisition of Comaplex Minerals Corp.), located approximately 300 kilometres southeast of the Company's Meadowbank mine.

Meliadine currently hosts 3.3 million ounces of gold in measured and indicated resources (12.9 million tonnes grading 7.9 g/t) plus 1.7 million ounces of gold in inferred resources (8.4 tonnes grading 6.4 g/t). The deposit remains open for expansion and a large scale exploration program has been approved and is underway.

Through early 2013, it is anticipated that approximately $62 million will be spent on drilling approximately 200,000 metres with the main focus being on converting the resource at the high grade Tiriganiaq zone to reserves. An underground bulk sample will also be completed along with a feasibility study, permitting and road construction. The total expenditures over this period are expected to be approximately $130 million.

Initial results from this drilling program, and those for Agnico-Eagle's other exploration programs, will be presented in an exploration update planned for September 2010.

Corporate Social Responsibility Report Published

During the quarter, Agnico-Eagle published its first Corporate Social Responsibility (CSR) report. The CSR report details the Company's economic, health, safety, environment and social performance from January 1 to December 31, 2009. It is intended to give shareholders, employees, contractors, suppliers, business partners, government bodies and people in the communities in which the Company operates a better understanding of how Agnico-Eagle manages operational safety, environmental and social risks. The report is available on the Company's website at:

http://www.agnico-eagle.com/Theme/Agnico2/files/AEM_CSR_2010_Final.pdf

About Agnico-Eagle

Agnico-Eagle is a long established, Canadian headquartered, gold producer with operations located in Canada, Finland and Mexico, and exploration and development activities in Canada, Finland, Mexico and the United States. Agnico-Eagle's LaRonde mine is Canada's largest operating gold mine in terms of reserves. The Company has full exposure to higher gold prices consistent with its policy of no forward gold sales. It has paid a cash dividend for 28 consecutive years.

    
    -------------------
    (1) Payable production of a mineral means the quantity of mineral
    produced during a period contained in products that are sold by the
    Company, whether such products are shipped during the period or held as
    inventory at the end of the period.
    (2) Total cash costs per ounce is a non-GAAP measure. For reconciliation
    of this measure to production costs, as reported in the financial
    statements, see Note 1 to the financial statements at the end of this
    press release.
    (3) Minesite costs per tonne is a non-GAAP measure. For reconciliation of
    this measure to production costs, as reported in the financial
    statements, see Note 1 to the financial statements at the end of this
    news release.


                         AGNICO-EAGLE MINES LIMITED
               SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS
           (thousands of United States dollars, except where noted,
                          US GAAP basis, Unaudited)

                                Three months ended       Six months ended
                                ------------------       ----------------
                                     June 30,                June 30,
                                     --------                --------
                                 2010        2009        2010        2009
                                 ----        ----        ----        ----
    Gross mine profit
     (exclusive of amortization
     shown below) (Note 1)
    LaRonde..................    $43,614     $50,653     $89,001     $88,299
    Goldex...................     42,635      19,107      69,059      37,573
    Lapa.....................     20,204        (834)     41,477        (833)
    Kittila..................     16,625       3,145      28,095       3,145
    Pinos Altos..............     22,626           -      35,257           -
    Meadowbank (Note 2)......     35,179           -      37,350           -
                              ----------- ----------- ----------- -----------
    Total gross mine profit..    180,883      72,071     300,239     128,184
    Amortization.............     44,003      15,470      74,506      27,600
    Corporate................     28,332      38,016      75,910      52,663
                              ----------- ----------- ----------- -----------
    Income before tax........    108,548      18,585     149,823      47,921
    Tax provision............      8,189      17,358      27,131      (7,647)
                              ----------- ----------- ----------- -----------
    Net earnings.............   $100,359      $1,227    $122,692     $55,568
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
    Net earning per share....      $0.64       $0.01       $0.78       $0.36
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
    Operating cash flow......   $161,574     $26,369    $236,065     $75,192
    Realized price per
     sales volume (US$):
      Gold (per ounce).......     $1,222        $962      $1,168        $965
      Silver (per ounce).....     $19.29      $14.32      $18.94      $13.93
      Zinc (per tonne).......     $1,890      $1,698      $2,057      $1,421
      Copper (per tonne).....     $6,581      $5,832      $6,934      $5,058
    Payable production:
      Gold (ounces)
      LaRonde................     41,533      58,034      86,569     109,372
      Goldex.................     48,334      35,645      90,603      71,604
      Lapa...................     28,927      11,603      60,480      11,603
      Kittila................     31,593      13,771      56,140      18,285
      Pinos Altos............     29,665           -      55,893           -
      Meadowbank (Note 2)....     77,676           -      96,275           -
                              ----------- ----------- ----------- -----------
      Total gold (ounces)        257,728     119,053     445,960     210,864
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
      Silver (000s ounces)
      LaRonde................        860       1,034       1,735       2,063
      Pinos Altos............        248           -         470           -
      Meadowbank (Note 2)....         12           -          14           -
                              ----------- ----------- ----------- -----------
      Total silver
       (000s ounces)               1,120       1,034       2,219       2,063
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
      Zinc (tonnes)..........     18,465      14,928      32,689      28,219
      Copper (tonnes)........      1,056       2,066       2,108       3,748
    Payable metal sold:
      Gold (ounces -
       LaRonde)..............     41,665      59,608      86,906     110,561
      Gold (ounces - Goldex).     48,310      33,501      86,173      66,965
      Gold (ounces - Lapa)...     31,920       3,167      66,113       3,167
      Gold (ounces -
       Kittila)..............     28,588       6,780      59,262       6,780
      Gold (ounces -
       Pinos Altos)..........     30,633           -      51,599           -
      Gold (ounces -
       Meadowbank) (Note 2)..     70,182           -      77,285           -
                              ----------- ----------- ----------- -----------
      Total gold (ounces)        251,298     103,056     427,338     187,473
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
      Silver (000s ounces -
       LaRonde)..............        884       1,012       1,659       2,024
      Silver (000s ounces -
       Pinos Altos)..........        267           -         487           -
      Silver (000s ounces -
       Meadowbank)...........         14           -          14           -
                              ----------- ----------- ----------- -----------
      Total silver (ounces)        1,165       1,102       2,160       2,024
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
      Zinc (tonnes)..........     15,437      12,804      29,966      29,861
      Copper (tonnes)........      1,043       2,066       2,090       3,752
    Total cash costs per
     ounce of gold (Note 3):
    LaRonde..................       $270        $109        $216        $196
    Goldex...................       $324        $365        $348        $352
    Lapa.....................       $545        $948        $516        $948
    Kittila..................       $607        $658        $663        $658
    Pinos Altos..............       $415           -        $425           -
    Meadowbank (Note 2)......       $663           -        $695           -
                              ----------- ----------- ----------- -----------
      Weighted average total
       cash costs per ounce..       $487        $326        $469        $320
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------


    Note 1
    ------
    Gross mine profit is calculated as total revenues from all metals, by
    mine, minus total production costs, by mine.

    Note 2
    ------
    Meadowbank achieved commercial production as of March 1, 2010. Payable
    production includes commercial production of 95,191 ounces since March 1,
    2010 and non-commercial production of 1,084 ounces.

    Note 3
    ------
    Total cash costs per ounce of gold is calculated net of silver, copper,
    zinc and other byproduct credits. The weighted average total cash cost
    per ounce is based on commercial production ounces. Total cash costs per
    ounce is a non-GAAP measure. For a reconciliation to production costs,
    see Note 1 to the financial statements. See also "Note Regarding Certain
    Measures of Performance".


                         AGNICO-EAGLE MINES LIMITED
                         CONSOLIDATED BALANCE SHEETS
             (thousands of United States dollars, US GAAP basis)
                                 (Unaudited)

                                                        As at       As at
                                                       June 30,  December 31,
                                                       --------  ------------
                                                         2010        2009
                                                         ----        ----
    ASSETS
    Current
      Cash and cash equivalents.....................    $152,786    $163,593
      Trade receivables.............................      65,355      93,570
      Inventories:
        Ore stockpiles..............................      50,052      41,286
        Concentrates................................      49,491      31,579
        Supplies....................................      97,329     100,885
      Other current assets..........................     233,126     173,127
    Fair value of derivative assets.................       3,873           -
                                                      ----------- -----------
    Total current assets............................     652,012     604,040
    Other assets....................................      77,652      33,641
    Future income and mining tax assets.............      25,869      27,878
    Property, plant and mine development............   3,739,239   3,581,798
                                                      ----------- -----------
                                                      $4,494,772  $4,247,357
                                                      ----------- -----------
                                                      ----------- -----------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
      Accounts payable and accrued liabilities......    $162,103    $155,432
      Dividends payable.............................           -      28,198
      Interest payable..............................       9,889       1,666
      Income taxes payable..........................      19,196       4,501
                                                      ----------- -----------
    Total current liabilities.......................     191,188     189,797
                                                      ----------- -----------
    Long term debt..................................     735,000     715,000
    Fair value of derivative financial instruments..       1,622         663
    Reclamation provision and other liabilities.....     107,465      96,255
    Future income and mining tax liabilities........     509,958     493,881

    Shareholders' equity
    Common shares
    Authorized - unlimited Issued - 157,089,726
     (December 31, 2009 - 156,655,056)..............   2,397,106   2,378,759
    Stock options...................................      89,955      65,771
    Warrants........................................      24,858      24,858
    Contributed surplus.............................      15,166      15,166
    Retained earnings...............................     338,850     216,158
    Accumulated other comprehensive income..........      83,604      51,049
                                                      ----------- -----------

    Total shareholders' equity......................   2,949,539   2,751,761
                                                      ----------- -----------
                                                      $4,494,772  $4,247,357
                                                      ----------- -----------
                                                      ----------- -----------


                         AGNICO-EAGLE MINES LIMITED
                      CONSOLIDATED STATEMENTS OF INCOME
           (thousands of United States dollars except share and per
                        share amounts, US GAAP basis)
                                 (Unaudited)

                                Three months ended       Six months ended
                                ------------------       ----------------
                                     June 30,                June 30,
                                     --------                --------
                                 2010        2009        2010        2009
                                 ----        ----        ----        ----

    REVENUES
    Revenues from mining
     operations..............   $347,456    $133,084    $585,039    $238,915
    Interest and sundry
     income..................      6,488       5,103       7,315       9,796
    Gain on sale of
     available-for-sale
     securities..............          -         341         346         535
                              ----------- ----------- ----------- -----------
                                 353,944     138,528     592,700     249,246
    COSTS AND EXPENSES
    Production...............    166,573      61,013     284,800     110,731
    Exploration and
     corporate development...     12,955       9,735      20,459      15,984
    Amortization.............     44,003      15,470      74,506      27,600
    General and
     administrative..........     23,240      13,253      51,670      32,053
    Provincial capital tax...        742       1,473         155       2,582
    Interest.................     15,309       2,335      19,813       3,204
    Foreign currency
     loss (gain).............    (17,427)     16,664      (8,526)      9,171
                              ----------- ----------- ----------- -----------
    Income before income,
     mining and federal
     capital taxes...........    108,549      18,585     149,823      47,921
    Income and mining
     tax expense (recovery)..      8,189      17,358      27,131      (7,647)
                              ----------- ----------- ----------- -----------

    Net income for
     the period..............   $100,360      $1,227    $122,692     $55,568
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------

    Net income per
     share - basic...........      $0.64       $0.01       $0.78       $0.36
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
    Net income per
     share - diluted.........      $0.63       $0.01       $0.77       $0.35
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------

    Weighted average number
     of shares outstanding
     (in thousands)
      Basic..................    156,899     155,805     156,789     155,498
      Diluted................    159,920     157,763     159,585     157,432



                         AGNICO-EAGLE MINES LIMITED
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
             (thousands of United States dollars, US GAAP basis)
                                 (Unaudited)

                                Three months ended       Six months ended
                                ------------------       ----------------
                                     June 30,                June 30,
                                     --------                --------
                                 2010        2009        2010        2009
                                 ----        ----        ----        ----
    Operating activities
    Net income for
     the period..............   $100,360      $1,227    $122,692     $55,568
    Add (deduct) items not
     affecting cash:
      Amortization...........     44,003      15,470      74,506      27,600
      Future income and
       mining taxes..........        431      17,209      13,526      (7,929)
      Gain on sale of
       available-for-sale
       securities............     (3,716)       (341)     (4,175)       (535)
      Amortization of
       deferred costs
       and other.............     (2,179)     20,194      24,881      20,230
    Changes in non-cash
     working capital balances
      Trade receivables......      7,825     (17,314)     28,215     (32,511)
      Income taxes payable...     10,771       2,570      14,695       1,977
      Inventories............    (16,067)    (13,928)    (41,609)    (12,005)
      Other current assets...    (16,903)     (8,496)    (20,785)     21,424
      Interest payable.......      8,562         (62)      8,223         340
      Accounts payable and
       accrued liabilities...     28,487       9,840      15,896       1,033
                              ----------- ----------- ----------- -----------
    Cash provided by
     operating activities....    161,574      26,369     236,065      75,192
                              ----------- ----------- ----------- -----------

    Investing activities
    Additions to property,
     plant and mine
     development.............   (117,017)   (155,002)   (229,580)   (310,349)
    Acquisition,
     investments and other...        733       2,926      (4,909)      3,416
                              ----------- ----------- ----------- -----------
    Cash used in
     investing activities....   (116,284)   (152,076)   (234,489)   (306,933)
                              ----------- ----------- ----------- -----------

    Financing activities
    Dividends paid...........          -           -     (26,830)    (27,132)
    Repayment of capital
     lease and other.........     (8,573)     (6,520)    (10,112)     (6,882)
    Proceeds from notes......  1,101,000      70,000   1,201,000     285,000
    Repayment of
     long term debt.......... (1,101,000)          -  (1,181,000)          -
    Sales-leaseback
     financing...............          -      10,888       3,005      10,888
    Credit facility
     financing cost..........    (12,488)     (4,572)    (12,488)     (4,572)
    Proceeds from common
     shares issued...........     10,639      18,451      14,357      47,392
                              ----------- ----------- ----------- -----------
    Cash provided by (used
     in) financing
     activities..............    (10,422)     88,247     (12,068)    304,694
                              ----------- ----------- ----------- -----------

    Effect of exchange rate
     changes on cash and
     cash equivalents........       (134)      2,990        (315)      1,571
                              ----------- ----------- ----------- -----------

    Net increase (decrease)
     in cash and cash
     equivalents during
     the period..............     34,734     (34,470)    (10,807)     74,524
    Cash and cash
     equivalents, beginning
     of period...............    118,052     208,375     163,593      99,381
                              ----------- ----------- ----------- -----------

    Cash and cash
     equivalents,
     end of period...........   $152,786    $173,905    $152,786    $173,905
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
    Other operating cash
     flow information:
    Interest paid during
     the period.............      $4,708      $1,987     $13,430      $3,509
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
    Income, mining and
     capital taxes paid
     during the period.......         $-      $1,112      $1,497      $2,859
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------


    Note 1  The following tables provide a reconciliation, on an individual
    mine basis, of the total cash costs per ounce of gold produced and
    minesite costs per tonne to production costs as set out the interim
    consolidated financial statements:


    Total Cash Costs per
    Ounce of Gold By Mine
    ---------------------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    -----------------------------  --------- ---------- ---------- ----------
    Total Production costs per
     Consolidated Statements
     of Income...................  $166,573    $61,013   $284,800   $110,731

    Attributable to LaRonde          46,605     41,526     92,087     79,773
    Attributable to Goldex           16,469     12,479     30,269     23,950
    Attributable to Lapa             17,830      3,818     34,209      3,818
    Attributable to Kittila          18,100      3,190     41,118      3,190
    Attributable to Pinos Altos      18,537          -     32,386          -
    Attributable to Meadowbank       49,032          -     54,731          -
                                   ------------------------------------------
                                   ------------------------------------------
    Total........................  $166,573    $61,013   $284,800   $110,731
                                   ------------------------------------------
                                   ------------------------------------------

    LaRonde
    -------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $46,605    $41,526    $92,087    $79,773
    Adjustments:
      Byproduct revenues            (39,252)   (37,031)   (77,643)   (58,857)
      Inventory adjustment(i)         4,203      2,138      4,967      1,109
      Non-cash reclamation
       provision                       (337)      (293)      (672)      (567)
                                  ---------- ---------- ---------- ----------
    Cash operating costs.........   $11,219     $6,340    $18,739    $21,458
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Gold production (ounces).....    41,533     58,034     86,569    109,372
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Total cash costs
     (per ounce)(ii)                   $270       $109       $216       $196
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Goldex
    ------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $16,469    $12,479    $30,269    $23,950
    Adjustments:
      Byproduct revenues                 (8)         -        (14)         -
      Inventory adjustment(i)          (690)       586      1,411      1,329
      Non-cash reclamation
       provision                        (54)       (50)      (108)       (96)
                                  ---------- ---------- ---------- ----------
    Cash operating costs.........   $15,717    $13,015    $31,558    $25,183
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Gold production (ounces).....    48,334     35,645     90,603     71,604
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Total cash costs
     (per ounce)(ii)                   $324       $365       $348       $352
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------


    Lapa
    ----
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $17,830     $3,818    $34,209     $3,818
    Adjustments:
      Byproduct revenues                 (7)         -        (27)         -
      Inventory adjustment(i)        (2,038)     7,191     (2,964)     7,191
      Non-cash reclamation
       provision                        (14)        (7)       (28)        (7)
                                  ---------- ---------- ---------- ----------
    Cash operating costs.........   $15,771    $11,002    $31,190    $11,002
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Gold production (ounces).....    28,927     11,603     60,480     11,603
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Total cash costs (per ounce)(ii)   $545       $948       $516       $948
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------


    Kittila
    -------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $18,100     $3,190    $41,118     $3,190
    Adjustments:
      Byproduct revenues                 (5)         -        (30)         -
      Inventory adjustment(i)         1,146      4,784     (3,702)     4,784
      Non-cash reclamation
       provision                        (65)       (62)      (164)       (62)
                                  ---------- ---------- ---------- ----------
    Cash operating costs.........   $19,176     $7,912    $37,222     $7,912
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Gold production (ounces).....    31,593     12,018     56,140     12,018
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Total cash costs (per ounce)(ii)   $607       $658       $663       $658
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------


    Pinos Altos
    -----------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $18,537         $-    $32,386         $-
    Adjustments:
      Byproduct revenues             (4,885)         -     (8,572)         -
      Inventory adjustment(i)        (1,115)         -        378          -
      Non-cash reclamation
       provision                       (214)         -       (428)         -
                                  ---------- ---------- ---------- ----------
    Cash operating costs.........   $12,323         $-    $23,764         $-
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Gold production (ounces).....    29,665          -     55,893          -
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Total cash costs
     (per ounce)(ii)                   $415         $-       $425         $-
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------


    Meadowbank
    ----------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $49,032         $-    $54,731         $-
    Adjustments:
      Byproduct revenues               (232)         -       (258)         -
      Inventory adjustment(i)         3,031          -     12,192          -
      Non-cash reclamation
       provision                       (367)         -       (494)         -
    Cash operating costs.........   $51,464         $-    $66,171         $-
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Gold production (ounces).....    77,676          -     95,191          -
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Total cash costs
     (per ounce)(ii)                   $663         $-       $695         $-
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------


    Minesite Cost per Tonne
    -----------------------------
    LaRonde
    -------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $46,605    $41,526    $92,087    $79,773
    Adjustments:
    Inventory adjustments(iii)        4,203      2,137      4,967      1,109
    Non-cash reclamation
     provision...................      (337)      (293)      (672)      (567)
                                  ---------- ---------- ---------- ----------
    Minesite operating costs (US$)  $50,471    $43,370    $96,382    $80,315
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Minesite operating costs (C$)   $52,125    $48,602    $99,202    $95,096
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Tonnes of ore milled (000s)         660        656      1,324      1,305
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Minesite cost per tonne
     (C$)(iv)                           $79        $74        $75        $73
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Goldex
    ------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $16,469    $12,479    $30,269    $23,950
    Adjustments:
    Inventory adjustments(iii)         (690)       586      1,411      1,329
    Non-cash reclamation
     provision...................       (54)       (50)      (108)       (96)
                                  ---------- ---------- ---------- ----------
    Minesite operating costs (US$)  $15,725    $13,015    $31,572    $25,183
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Minesite operating costs (C$)   $16,197    $14,887    $32,510    $30,079
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Tonnes of ore milled (000s)         667        626      1,334      1,235
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Minesite cost per tonne
     (C$)(iv)                           $24        $24        $24        $24
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Lapa
    ----
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $17,830     $3,818    $34,209     $3,818
    Adjustments:
    Inventory adjustments(iii)       (2,038)     7,191     (2,964)     7,191
    Non-cash reclamation
     provision...................       (14)        (7)       (28)        (7)
                                  ---------- ---------- ---------- ----------
    Minesite operating costs (US$)  $15,778    $11,002    $31,217    $11,002
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Minesite operating costs (C$)   $16,347    $12,145    $32,179    $12,145
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Tonnes of ore milled (000s)         139         81        267         81
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Minesite cost per tonne
     (C$)(iv)                          $118       $149       $120       $149
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Kittila
    -------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $18,100     $3,190    $41,118     $3,190
    Adjustments:
    Inventory adjustments(iii)        1,146      4,784     (3,702)     4,784
    Non-cash reclamation
     provision...................       (65)       (62)      (164)       (62)
                                  ---------- ---------- ---------- ----------
    Minesite operating costs (US$)  $19,181     $7,912    $37,252     $7,912
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
                                      (euro)     (euro)     (euro)     (euro)
    Minesite operating costs (EUR)   14,111      5,717     28,026      5,717
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Tonnes of ore milled (000s)         220        132        437        132
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Minesite cost per tonne           (euro)     (euro)     (euro)     (euro)
     (EUR)(iv)                           64         43         64         43
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Pinos Altos
    -----------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $18,537         $-    $32,386         $-
    Adjustments:
    Inventory adjustments(iii)       (1,115)         -        378          -
    Non-cash reclamation
     provision...................      (214)         -       (428)         -
                                  ---------- ---------- ---------- ----------
    Minesite operating costs (US$)  $17,208         $-    $32,336         $-
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Tonnes of ore processed (000s)      553          -      1,004          -
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Minesite cost per tonne
     (US$)(iv)                          $31         $-        $32         $-
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Meadowbank
    ----------
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
    (thousands of dollars,          June 30,   June 30,   June 30,   June 30,
     except where noted)               2010       2009       2010       2009
    ----------------------------- ---------- ---------- ---------- ----------
    Production costs                $49,032         $-    $54,731         $-
    Adjustments:
    Inventory adjustments(iii)        3,031          -     12,192          -
    Non-cash reclamation
     provision...................      (367)         -       (494)         -
                                  ---------- ---------- ---------- ----------
    Minesite operating costs (US$)  $51,696         $-    $66,429         $-
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Minesite operating costs (C$)   $53,642         $-    $68,759         $-
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Tonnes of ore milled (000s)         570          -        733          -
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Minesite cost per tonne
     (C$)(iv)                           $94         $-        $94         $-
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    (i)   Under the Company's revenue recognition policy, revenue is
          recognized on concentrates when legal title passes. Since total
          cash costs are calculated on a production basis, this inventory
          adjustment reflects the sales margin on the portion of concentrate
          production for which revenue has not been recognized in the period.

    (ii)  Total cash costs per ounce is not a recognized measure under US
          GAAP and this data may not be comparable to data presented by other
          gold producers. The Company believes that this generally accepted
          industry measure is a realistic indication of operating performance
          and is useful in allowing year over year comparisons. As
          illustrated in the table above, this measure is calculated by
          adjusting production costs as shown in the Consolidated Statements
          of Income and Comprehensive Income for net byproduct revenues,
          royalties, inventory adjustments and asset retirement provisions.
          This measure is intended to provide investors with information
          about the cash generating capabilities of the Company's mining
          operations. Management uses this measure to monitor the performance
          of the Company's mining operations. Since market prices for gold
          are quoted on a per ounce basis, using this per ounce measure
          allows management to assess the mine's cash generating capabilities
          at various gold prices. Management is aware that this per ounce
          measure of performance can be impacted by fluctuations in byproduct
          metal prices and exchange rates. Management compensates for the
          limitation inherent with this measure by using it in conjunction
          with the minesite costs per tonne measure (discussed below) as well
          as other data prepared in accordance with US GAAP. Management also
          performs sensitivity analyses in order to quantify the effects of
          fluctuating metal prices and exchange rates.

    (iii) This inventory adjustment reflects production costs associated with
          unsold concentrates.

    (iv)  Minesite costs per tonne is not a recognized measure under US GAAP
          and this data may not be comparable to data presented by other gold
          producers. As illustrated in the table above, this measure is
          calculated by adjusting production costs as shown in the
          Consolidated Statements of Income and Comprehensive Income for
          inventory and asset retirement provisions and then dividing by
          tonnes processed through the mill. Since total cash costs data can
          be affected by fluctuations in byproduct metal prices and exchange
          rates, management believes minesite costs per tonne provides
          additional information regarding the performance of mining
          operations and allows management to monitor operating costs on a
          more consistent basis as the per tonne measure eliminates the cost
          variability associated with varying production levels. Management
          also uses this measure to determine the economic viability of
          mining blocks. As each mining block is evaluated based on the net
          realizable value of each tonne mined, in order to be economically
          viable the estimated revenue on a per tonne basis must be in excess
          of the minesite costs per tonne. Management is aware that this per
          tonne measure is impacted by fluctuations in production levels and
          thus uses this evaluation tool in conjunction with production costs
          prepared in accordance with US GAAP. This measure supplements
          production cost information prepared in accordance with US GAAP and
          allows investors to distinguish between changes in production costs
          resulting from changes in production versus changes in operating
          performance.


    Detailed Mineral Reserve and Resource Data
    (as at December 31, 2009, including Meliadine Resources as at
     January 2010)

    -------------------------------------------------------------------------
    Category                                                   Au
     and                  Au      Ag      Cu      Zn   Pb    (000s    Tonnes
     Operation          (g/t)   (g/t)     (%)     (%)  (%)     oz.)    (000s)
    -------------------------------------------------------------------------
    Proven Mineral
     Reserve
    -------------------------------------------------------------------------
    Goldex
     (underground)       2.02                                   339    5,217
    -------------------------------------------------------------------------
      Kittila
       (open pit)        3.71                                    30      255
    -------------------------------------------------------------------------
      Kittila
       (underground)     3.81                                     0        1
    -------------------------------------------------------------------------
    Kittila total
     proven              3.71                                    31      257
    -------------------------------------------------------------------------
    Lapa (underground)   8.33                                   240      897
    -------------------------------------------------------------------------
    LaRonde
     (underground)       2.34   61.95    0.26   3.31  0.39      358    4,755
    -------------------------------------------------------------------------
    Meadowbank
     (open pit)          4.57                                    88      600
    -------------------------------------------------------------------------
    Pinos Altos
     (open pit)          1.51   26.35                            43      880
    -------------------------------------------------------------------------
    Subtotal Proven
     Mineral Reserve     2.71                                 1,098   12,605
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Probable Mineral
     Reserve
    -------------------------------------------------------------------------
    Goldex
     (underground)       2.06                                 1,291   19,524
    -------------------------------------------------------------------------
      Kittila
       (open pit)        5.05                                   496    3,053
    -------------------------------------------------------------------------
      Kittila
       (underground)     4.80                                 3,499   22,651
    -------------------------------------------------------------------------
    Kittila total
     probable            4.83                                 3,994   25,704
    -------------------------------------------------------------------------
    Lapa (underground)   8.09                                   603    2,319
    -------------------------------------------------------------------------
    LaRonde
     (underground)       4.72   27.89    0.29   1.16  0.09    4,492   29,625
    -------------------------------------------------------------------------
    Meadowbank
     (open pit)          3.51                                 3,567   31,600
    -------------------------------------------------------------------------
      Pinos Altos
       (open pit)        2.05   49.30                         1,195   18,101
    -------------------------------------------------------------------------
      Pinos Altos
       (underground)     2.92   86.87                         2,158   22,979
    -------------------------------------------------------------------------
    Pinos Altos total
     probable            2.54   70.31                         3,353   41,080
    -------------------------------------------------------------------------
    Subtotal Probable
     Mineral Reserve     3.59                                17,300  149,852
    -------------------------------------------------------------------------
    Total Proven and
     Probable Mineral
     Reserves            3.52                                18,398  162,458
    -------------------------------------------------------------------------


    -----------------------------------------------------------------
    Category
     and                  Au      Ag      Cu      Zn   Pb     Tonnes
     Operation          (g/t)   (g/t)     (%)     (%)  (%)    (000s)
    -----------------------------------------------------------------
    Measured Mineral
     Resource
    -----------------------------------------------------------------
    Meliadine (open pit)  8.4                                    180
    -----------------------------------------------------------------
    Meliadine
     (underground)       14.0                                    115
    -----------------------------------------------------------------
    Total Measured
     Resource            10.6                                    295
    -----------------------------------------------------------------


    -----------------------------------------------------------------
    Category
     and                  Au      Ag      Cu      Zn   Pb     Tonnes
     Operation          (g/t)   (g/t)     (%)     (%)  (%)    (000s)
    -----------------------------------------------------------------
    Indicated Mineral
     Resource
    -----------------------------------------------------------------
    Bousquet
     (underground)       5.63                                  1,704
    -----------------------------------------------------------------
    Ellison
     (underground)       5.68                                    415
    -----------------------------------------------------------------
    Goldex
     (underground)       1.79                                    220
    -----------------------------------------------------------------
    Kittila
     (underground)       2.19                                 20,550
    -----------------------------------------------------------------
    Lapa (underground)   4.63                                  1,672
    -----------------------------------------------------------------
    LaRonde
     (underground)       1.85  24.94    0.13    1.52  0.15     6,482
    -----------------------------------------------------------------
      Meadowbank
       (open pit)        2.34                                 40,981
    -----------------------------------------------------------------
      Meadowbank
       (underground)     5.23                                  1,388
    -----------------------------------------------------------------
    Meadowbank total
     indicated           2.43                                 42,369
    -----------------------------------------------------------------
      Meliadine
       (open pit)         5.4                                  5,917
    -----------------------------------------------------------------
      Meliadine
       (underground)     10.0                                  6,735
    -----------------------------------------------------------------
    Meliadine total
     indicated            7.9                                 12,652
    -----------------------------------------------------------------
      Pinos Altos
       (open pit)        0.67   8.30                           6,990
    -----------------------------------------------------------------
      Pinos Altos
       (underground)     1.11  41.78                           8,679
    -----------------------------------------------------------------
    Pinos Altos total
     indicated           0.91  26.84                          15,668
    -----------------------------------------------------------------
    Swanson (open pit)   1.93                                    504
    -----------------------------------------------------------------
    Total Indicated
     Resource            2.88                                102,236
    -----------------------------------------------------------------


    -----------------------------------------------------------------
    Category
     and                  Au      Ag      Cu      Zn   Pb     Tonnes
     Operation          (g/t)   (g/t)     (%)     (%)  (%)    (000s)
    -----------------------------------------------------------------
    Inferred Mineral
     Resource
    -----------------------------------------------------------------
    Bousquet
     (underground)       7.45                                  1,667
    -----------------------------------------------------------------
    Ellison
     (underground)       5.81                                    786
    -----------------------------------------------------------------
    Goldex
     (underground)       2.37                                 10,540
    -----------------------------------------------------------------
    Kittila
     (underground)       3.42                                  5,350
    -----------------------------------------------------------------
    Kylmakangas,
     Finland
     (underground)       4.07                                  1,924
    -----------------------------------------------------------------
    Lapa (underground)   7.90                                    393
    -----------------------------------------------------------------
    LaRonde
     (underground)       3.93  11.34    0.27    0.43  0.04    10,942
    -----------------------------------------------------------------
      Meadowbank
       (open pit)        2.54                                  9,166
    -----------------------------------------------------------------
      Meadowbank
       (underground)     6.12                                     16
    -----------------------------------------------------------------
    Meadowbank total
     inferred            2.54                                  9,182
    -----------------------------------------------------------------
      Meliadine
       (open pit)         4.0                                  3,397
    -----------------------------------------------------------------
      Meliadine
       (underground)      8.1                                  4,991
    -----------------------------------------------------------------
    Meliadine total
     inferred             6.4                                  8,388
    -----------------------------------------------------------------
      Pinos Altos
       (open pit)        1.02  15.33                          11,655
    -----------------------------------------------------------------
      Pinos Altos
       (underground)     2.42  43.41                           4,018
    -----------------------------------------------------------------
    Pinos Altos total
     inferred            1.38  22.53                          15,673
    -----------------------------------------------------------------
    Total Inferred
     Resource            3.29                                 64,845
    -----------------------------------------------------------------
    Tonnage amounts and contained metal amounts presented in this table have
    been rounded to the nearest thousand. Reserves are not a sub-set of
    resources.
    

Forward-Looking Statements

The information in this news release has been prepared as at July 28, 2010. Certain statements contained in this press release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward looking information" under the provisions of Canadian provincial securities laws and are referred to herein as "forward-looking statements". When used in this document, words such as "anticipate", "expect", "estimate," "forecast," "planned", "will", "likely" and similar expressions are intended to identify forward-looking statements.

Such statements include without limitation: the Company's forward-looking production guidance, including estimated ore grades, metal production, life of mine horizons, commencement of production estimates, the estimated timing of scoping studies, recovery rates, mill throughput, optimization efforts, and projected exploration and capital expenditures, including costs and other estimates upon which such projections are based; the Company's goal to increase its mineral reserves and resources; and other statements and information regarding anticipated trends with respect to the Company's operations, exploration and the funding thereof. Such statements reflect the Company's views as at the date of this press release and are subject to certain risks, uncertainties and assumptions. Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by Agnico-Eagle as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions of Agnico-Eagle contained in this news release, which may prove to be incorrect, include, but are not limited to, the assumptions set forth herein and in management's discussion and analysis and the Company's Annual Report on Form 20-F for the year ended December 31, 2009 ("Form 20-F") as well as: that there are no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, damage to equipment, natural occurrences, political changes, title issues or otherwise; that permitting, production and expansion at each of Agnico-Eagle's mines and growth projects proceeds on a basis consistent with current expectations, and that Agnico-Eagle does not change its plans relating to such projects; that the exchange rate between the Canadian dollar, European Union euro, Mexican peso and the United States dollar will be approximately consistent with current levels or as set out in this news release; that prices for gold, silver, zinc, copper and lead will be consistent with Agnico-Eagle's expectations; that prices for key mining and construction supplies, including labour costs, remain consistent with Agnico-Eagle's current expectations; that Agnico-Eagle's current estimates of mineral reserves, mineral resources, mineral grades and metal recovery are accurate; that there are no material delays in the timing for completion of ongoing growth projects; that the Company's current plans to optimize production are successful; and that there are no material variations in the current tax and regulatory environment. Many factors, known and unknown, could cause the actual results to be materially different from those expressed or implied by such forward-looking statements. Such risks include, but are not limited to: the volatility of prices of gold and other metals; uncertainty of mineral reserves, mineral resources, mineral grades and metal recovery estimates; uncertainty of future production, capital expenditures, and other costs; currency fluctuations; financing of additional capital requirements; cost of exploration and development programs; mining risks; risks associated with foreign operations; governmental and environmental regulation; the volatility of the Company's stock price; and risks associated with the Company's byproduct metal derivative strategies. For a more detailed discussion of such risks and other factors, see the Form 20-F, as well as the Company's other filings with the Canadian Securities Administrators and the U.S. Securities and Exchange Commission (the "SEC"). The Company does not intend, and does not assume any obligation, to update these forward-looking statements and information, except as required by law. Accordingly, readers are advised not to place undue reliance on forward-looking statements. Certain of the foregoing statements, primarily related to projects, are based on preliminary views of the Company with respect to, among other things, grade, tonnage, processing, recoveries, mining methods, capital costs, total cash costs, minesite costs, and location of surface infrastructure. Actual results and final decisions may be materially different from those currently anticipated.

Notes to Investors Regarding the Use of Resources

Cautionary Note to Investors Concerning Estimates of Measured and Indicated Resources

This news release uses the terms "measured resources" and "indicated resources". We advise investors that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.

Cautionary Note to Investors Concerning Estimates of Inferred Resources

This press release also uses the term "inferred resources". We advise investors that while this term is recognized and required by Canadian regulations, the SEC does not recognize it. "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

Scientific and Technical Data

Agnico-Eagle Mines Limited is reporting mineral resource and reserve estimates in accordance with the CIM guidelines for the estimation, classification and reporting of resources and reserves.

Cautionary Note To U.S. Investors - The SEC permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. Agnico-Eagle uses certain terms in this press release, such as "measured", "indicated", and "inferred", and "resources" that the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 20-F, which may be obtained from us, or from the SEC's website at: http://sec.gov/edgar.shtml. A "final" or "bankable" feasibility study is required to meet the requirements to designate reserves under Industry Guide 7. Estimates for all properties other than Meliadine were calculated using historic three-year average metals prices and foreign exchange rates in accordance with the SEC Industry Guide 7. Industry Guide 7 requires the use of prices that reflect current economic conditions at the time of reserve determination which the Staff of the SEC has interpreted to mean historic three-year average prices. The assumptions used for the mineral reserves and resources estimates reported by the Company on February 17, 2010 were based on three-year average prices for the period ending December 31, 2009 of $848 per ounce gold, $14.35 per ounce silver, $1.03 per pound zinc, $2.91 per pound copper, $0.97 per pound lead and C$/US$, US$/Euro and MXP/US$ exchange rates of 1.09, 1.41 and 11.85, respectively.

The Meliadine mineral resource estimates used various cutoff gold grades. The cutoff grade for most of Meliadine's open pit resources is 2.5 g/t gold, and 5.5 g/t gold for the underground resources. Higher cutoff gold grades were chosen for the Discovery deposit (3.0 g/t for open pit and 6.0 g/t for underground) to compensate for greater transportation costs to the proposed mill site near the Tiriganiaq deposit. Please consult the February 2010 technical report, which is available on SEDAR.com under Comaplex Minerals Corp., for further details about the Meliadine mineral resources.

The Canadian Securities Administrators' National Instrument 43-101 ("NI 43-101") requires mining companies to disclose reserves and resources using the subcategories of "proven" reserves, "probable" reserves, "measured" resources, "indicated" resources and "inferred" resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

A mineral reserve is the economically mineable part of a measured or indicated resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allows for losses that may occur when the material is mined. A proven mineral reserve is the economically mineable part of a measured resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. A probable mineral reserve is the economically mineable part of an indicated mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit.

A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

A feasibility study is a comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production.

The mineral reserves presented in this disclosure are separate from and not a portion of the mineral resources.

    
    -------------------------------------------------------------------------
    Property/Project      Qualified Person responsible     Date of most
    name and location     for the current Mineral          recent Technical
                          Resource and Reserve             Report (NI 43-101)
                          Estimate and relationship        filed on SEDAR
                          to Agnico-Eagle
    -------------------------------------------------------------------------
    LaRonde, Bousquet     François Blanchet Ing.,          March 23, 2005
    & Ellison,            LaRonde Division
    Quebec, Canada        Superintendent of geology
    -------------------------------------------------------------------------
    Kittila and           Daniel Doucet, Ing.,             March 4, 2010
    Kylmakangas, Finland  Corporate Director of Geology
    -------------------------------------------------------------------------
    Pinos Altos,          Dyane Duquette, P.Geo.,          March 25, 2009
    Chihuahua, Mexico.    Principal geologist, Abitibi
    Swanson, Quebec,      Technical Services Group
    Canada
    -------------------------------------------------------------------------
    Meadowbank,           Open Pit: Bruno Perron Ing.,     December 15, 2008
    Nunavut, Canada       Meadowbank Superintendent
                          of geology
                          Underground: Dyane Duquette,
                          P.Geo., Principal geologist,
                          Abitibi Technical Services
                          Group
    -------------------------------------------------------------------------
    Goldex, Quebec,       Richard Genest, Ing., Goldex     October 27, 2005
    Canada                Division Superintendent
                          of geology
    -------------------------------------------------------------------------
    Lapa, Quebec,         Normand Bédard, P.Geo., Lapa     June 8, 2006
    Canada                Division Superintendent
                          of geology
    -------------------------------------------------------------------------
    Meliadine, Nunavut,   Pamela De Mark, P.Geo., Senior   February 26, 2010
    Canada                Consultant; George Gilchrist,
                          Consultant; both with Snowden
                          Mining Industry Consultants,
                          Vancouver, BC.
    -------------------------------------------------------------------------
    

The effective date for all of the Company's mineral resource and reserve estimates in this press release is December 31, 2009, except for Meliadine, for which the effective date is January, 2010. No independent verification of the data has been published. Additional information about each of the mineral projects that is required by NI 43-101, sections 3.2 and 3.3 and paragraphs 3.4 (a), (c) and (d) can be found in the Technical Reports referred to above, which may be found at www.sedar.com. Other important operating information can be found in the Company's Form 20-F and its news release dated December 16, 2009.

The contents of this press release have been prepared under the supervision of, and reviewed by, Marc Legault P.Eng., Vice-President Project Development and a "Qualified Person" for the purposes of NI 43-101.

Note Regarding Certain Measures of Performance

This press release presents measures including "total cash costs per ounce" and "minesite costs per tonne" that are not recognized measures under US GAAP. This data may not be comparable to data presented by other gold producers. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and useful for year-over-year comparisons. However, both of these non-GAAP measures should be considered together with other data prepared in accordance with US GAAP, these measures, taken by themselves, are not necessarily indicative of operating costs or cash flow measures prepared in accordance with US GAAP. A reconciliation of the Company's total cash cost per ounce and minesite cost per tonne to the most comparable financial measures calculated and presented in accordance with US GAAP for the Company's historical results of operations is set out in Note 1 to the financial statements of the Company for the period ended June 30, 2010 contained herein.

SOURCE Agnico Eagle Mines Limited

For further information: For further information: Investor Relations, (416) 947-1212


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