Agnico-Eagle announces refinancing transaction with Stornoway Diamond Corporation

    Stock Symbols: AEM (NYSE and TSX)

    TORONTO, July 31 /CNW/ - Agnico-Eagle Mines Limited ("Agnico-Eagle" or
the "Company") announced that it purchased 12,222,222 common shares of
Stornoway Diamond Corporation ("Stornoway") at a price of C$0.90 per common
share from treasury. Stornoway used the proceeds of the private placement to
redeem the C$10 million principal amount of convertible debentures held by
Agnico-Eagle and to pay to Agnico-Eagle a C$1 million amendment fee in
connection with the amendment of the debentures to permit early redemption.
Agnico-Eagle received an additional 527,947 common shares of Stornoway in
satisfaction of accrued but unpaid interest on the debentures prior to their
redemption. As a result of the transactions, Agnico-Eagle increased its
holdings in Stornoway from 27,520,809 common shares (approximately 13.6% of
the issued and outstanding common shares) to 40,270,978 common shares
(approximately 17.7% of the issued and outstanding common shares).
Agnico-Eagle acquired the Stornoway shares for investment purposes only and
has no present intention to acquire further Stornoway securities and may, from
time to time, increase or decrease its ownership of or control over securities
of Stornoway in response to market conditions, the business and prospects of
Stornoway or other factors.

    About Agnico-Eagle

    Agnico-Eagle is a long established Canadian gold producer with operations
located in Quebec and exploration and development activities in Canada,
Finland, Mexico and the United States. Agnico-Eagle's LaRonde Mine is Canada's
largest gold deposit 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 26 consecutive years. Agnico-Eagle's registered
office is located at 145 King Street East, Suite 400, Toronto, Ontario M5C

For further information:

For further information: David Smith; Vice-President, Investor
Relations, (416) 947-1212

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