Agnico-Eagle expands gold zones at Pinos Altos; Signs option to acquire El Realito Property in Mexico

    Stock Symbols: AEM (NYSE and TSX)

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

    TORONTO, June 27 /CNW/ - Agnico-Eagle Mines Limited is pleased to provide
an update on its spring exploration and acquisition activities in Mexico.
Significant drilling results have been returned at Pinos Altos including
potentially ore-grade gold intercepts near surface and also at depth.
    More than half of the Company's exploration expenditures in 2007 (more
than $40 million) are expected to be in Mexico, with $26 million earmarked for
the Pinos Altos property. Additionally, Agnico-Eagle is investigating other
attractive land acquisitions and option agreements similar to the 2006 Pinos
Altos acquisition. The Company has made several strategic investments in
junior exploration companies in Mexico as well.

    Highlights of the recent exploration activity in Mexico include:

    -   Significant gold mineralization continues to be intersected near-
        surface and at shallow depths on the Creston Colorado and Mascota
        zones located in the northwest quadrant of the Pinos Altos property,
        approximately seven kilometres from the main Santo Nino zone. These
        new zones have not yet been included in the gold resource and are
        open in all directions

    -   Also at Pinos Altos, several drill holes continue to intersect
        potentially ore-grade mineralization over significant thicknesses
        between the Santo Nino and Cerro Colorado zones, suggesting that they
        are in fact one zone. This new mineralization, and the entire Cerro
        Colorado mineral resource, has not been included in the base case
        feasibility study currently undergoing third party review

    -   Agnico-Eagle has signed an option agreement under which it may
        purchase 100% of the El Realito property in Sinaloa, Mexico from a
        privately held company. A recent trenching program identified a gold-
        bearing structure with a strike length of over two kilometres

    "The most recent Pinos Altos exploration results give us further
confidence that we will be able to meet our previously stated gold reserve
target of 18 million to 20 million ounces by the end of 2008. Agnico-Eagle's
gold reserves already exceed the average of the rest of the mid-tier gold
producers by more than double" said Sean Boyd, Vice-Chairman and Chief
Executive Officer. "Further reserve growth beyond our stated targets is
possible as we continue to encounter potentially ore-grade mineralization
outside of our currently defined reserve and resource envelope" added Mr.
    Since acquiring the Pinos Altos property through an option agreement in
2006, Agnico-Eagle has been focusing on in-fill drilling around the main Santo
Nino and Oberon de Weber zones, for the purpose of producing a feasibility
study. The study is now completed and is undergoing third party engineering
    All the necessary land agreements with the four local ejidos have been
established. Negotiations for additional surface rights with the underlying
royalty holder are ongoing. If these negotiations are not successful,
modifications to the proposed mine plan contained in the base case feasibility
study will be implemented.

    Pinos Altos Resource Likely to Increase as Santo Nino and Cerro Colorado
    Zones Appear to Converge

    Four drill rigs are operational on the Pinos Altos property. Total
drilling in 2007 to date exceeds 21,000 metres.
    The Company has also been drilling outside of the current resource
envelope primarily focusing at depth and along strike of the Santo Nino and
Cerro Colorado structures.
    Some of the most significant results in 2007 at Pinos Altos were from the
deep resource expansion program at Santo Nino. This program was planned to
investigate whether the main Santo Nino zone and the higher grade Cerro
Colorado zone might join at depth.
    To this end, hole PA-07-170 returned 5.47 grams per tonne gold and
179.3 grams per tonne silver over a true thickness of 14.4 metres. Hole
PA-07-175 returned 5.47 grams per tonne gold and 68.9 grams per tonne silver
over a true thickness of 7.1 metres. These holes are located between the Santo
Nino and Cerro Colorado zones and have increased confidence that the two zones
may be the same zone.

    Drill                           Width    From      To      Gold   Silver
    Hole               Zone       (metres) (metres) (metres)   (g/t)   (g/t)
    PA-07-170(*)  Cerro Colorado    14.4    491.0    507.5     5.47    179.3
    PA-07-174     Cerro Colorado    13.5    545.5    562.0     1.58     41.1
    PA-07-175     Cerro Colorado    48.2    531.3    598.0     1.73     40.9
    including                        7.1    534.0    544.0     2.11     49.8
    and                              7.1    570.0    580.0     5.47     68.9
    PA-07-178     Cerro Colorado     8.1    630.0    639.5     3.66     64.2
    PA-07-180(xx) Cerro Colorado     6.0    488.5    495.0     5.51    126.3
    (*) Additional results received from previously disclosed hole;
    (xx)Some results pending in hole PA-07-180.

    As the gold resource at Cerro Colorado has not yet been included in the
base case feasibility study, these results are potentially significant to
future production. Further definition of the Cerro Colorado resource and its
inclusion in the mine plan would likely enhance the economics of the Pinos
Altos project as it is higher grade than the current reserves (Cerro Colorado
has an inferred resource of 1.5 million tonnes grading 3.7 grams per tonne
gold, or 180,000 ounces of gold, and 76.6 ounces per tonne silver, or
3.8 million ounces of silver as at February 2007).

    Recent New Discoveries Continue to Grow in Northwest Quadrant of Property

    In the northwest quadrant of the Pinos Altos property, approximately
seven kilometres from the main deposit at Santo Nino, the Mascota and Creston
Colorado zones continue to provide more evidence of the potential to expand
overall gold and silver resources on the property.
    In the fall of 2006, surface mapping, sampling and trenching identified
gold associated with at least two apparently flat lying zones of quartz vein
and stockwork mineralization near surface, each covering an area several
thousand square metres in size. The mineralization is similar to Santo Nino
(except in its orientation), with brecciated quartz veins and an associated
quartz stockwork system and some green-coloured quartz and traces of visible

    A drilling program has been underway at Creston Colorado and the adjacent
Mascota zone since December 2006 using a portable drill. Over 4,000 metres
have been completed so far with several significant results.

    Significant Thicknesses Intersected at Creston Colorado

    At Creston Colorado, diamond drilling has systematically traced a near
surface zone of almost continuous gold mineralization that trends roughly
north/south and dips very shallowly to the west. This zone of quartz stockwork
and quartz vein breccia mineralization generally reaches a thickness of up to
65 metres and has been traced for over 800 metres along strike (open to the
north) and for up to 200 metres down plunge (open down plunge).

    Drill                         Width(*)   From      To      Gold   Silver
    Hole               Zone       (metres) (metres) (metres)   (g/t)   (g/t)
    CM-07-29     Creston Colorado    3.0     88.4     91.4     1.73      2.5
    and                             28.5    105.1    133.8     1.35     27.6
    including                        5.5    105.1    110.6     2.02     29.6
    CM-07-30     Creston Colorado   17.1    108.8    126.0     0.51     14.9
    including                        5.6    108.8    114.4     1.16     16.5
    CM-07-31     Creston Colorado   66.7     61.5    128.5     1.92     25.4
    CM-07-32     Creston Colorado   18.7     44.0     62.8     1.35     12.0
    CM-07-32A    Creston Colorado    6.4     43.3     49.7     6.07     43.4
    CM-07-33     Creston Colorado   48.6     70.0    119.0     3.48     17.6
    including                       19.2     86.7    106.0     6.86     25.0
    CM-07-34     Creston Colorado   13.1     93.8    107.0     1.59      7.5
    and                             28.5    162.7    191.3     1.67     12.0
    (*) True thickness estimates are preliminary

    Recent drilling on Creston Colorado has identified what appears to be two
significant zones of stockwork mineralization in hole CM-07-034. In two
separate intercepts, assays returned gold grades of 1.59 grams per tonne gold
and 7.5 grams per tonne silver over a true thickness of 13.1 metres, and
1.67 grams per tonne gold and 12.0 grams per tonne silver over an apparent
true thickness of 28.5 metres.
    Additionally, hole CM-07-031 returned an impressive true thickness of
66.7 metres grading 1.92 grams per tonne gold and 25.4 grams per tonne silver.
One of the best results returned so far at Creston Colorado was in hole
CM-07-32A which returned 6.1 grams per tonne gold and 43.4 grams per tonne
silver over 6.4 metres true thickness. The hole was stopped short of its
targeted depth, in mineralized rock, due to drilling and recovery problems.
    These three holes are significant as they suggest potential ore-grade
mineralization at relatively shallow depths accessible by open-pit mining.

    Mascota Mineralization May Be Associated With Creston Colorado

    At Mascota, drilling has identified similar, but thinner, near surface
gold mineralization. So far the zone has ranged between four and six metres
true thickness. The drilling program is now concentrating on extending the
zone towards the adjacent Creston Colorado zone.
    Most significantly, the results of the current exploration program
suggest that the Creston Colorado and Mascota zones may form part of a larger
more widespread zone, occurring at a similar geologic interval, but separated
by sub-vertical fault zones that displace the same mineralized horizon. These
zones are not included in the current reserve and resource estimate at Pinos
    A new five kilometre road has been completed to provide better access to
this sector. A second drill rig will be added shortly and an initial resource
calculation for this region is expected by the end of 2007.

    Detail of 2007 Exploration Focus

    Development on the underground ramp began in March. Contract development
of the underground exploration ramp at Pinos Altos is currently progressing at
a rate of approximately 150 metres per month. Over 250 metres of ramp has been
completed to date and over 1,350 metres of ramp are expected to be completed
by year end 2008. Diamond drilling from the first underground drilling station
is planned to commence in October 2007. This drilling will target deep zones
in Santo Nino and Cerro Colorado. Over 12,000 metres of diamond drilling is
planned to be completed by the end of the year. The main focus of the
underground exploration program will be resource to reserve conversion of the
Cerro Colorado/Santo Nino zones and the area between them.
    In anticipation of a positive Board decision, Agnico-Eagle has signed a
letter of intent for delivery of the long-lead time ball and SAG mills for the
Pinos Altos project.

    Gold and Silver Reserves at Pinos Altos

    Pinos Altos currently has probable gold and silver reserves of
1.8 million ounces and 55.5 million ounces, respectively (18.6 million tonnes
containing 3.07 grams per tonne gold and 92.77 grams per tonne silver). In the
indicated resource category there are a further 1.6 million tonnes grading
1.48 grams per tonne gold and 61.84 grams per tonne silver, or 78,000 ounces
of gold and 3.3 million ounces of silver. There are also inferred resources of
5.2 million tonnes grading 3.03 grams per tonne gold and 80.54 grams per tonne
silver (0.5 million ounces of gold and 13.5 million ounces of silver).
    Company-wide drilling programs continue to confirm that extensive
mineralization exists outside of the current gold reserve and resource
envelopes at the various properties. The budgeted exploration expenditure in
2007 exceeds $40 million, the highest level in the Company's history,
including $26 million in Mexico. Currently, 23 drill rigs are operating
targeting 156,000 metres on exploration and 85,000 metres on definition
    It is anticipated that drilling at the current projects will enable
Agnico-Eagle to meet its year-end 2008 target of 18 million to 20 million
ounces of gold reserves (current gold reserves are 15.4 million ounces, the
highest level in the intermediate gold sector). Agnico-Eagle's gold reserves
are all located in mining-friendly regions with low political risk.

    Pinos Altos Analyst Tour

    Agnico-Eagle is planning to host a tour of its Pinos Altos property on
August 20 and August 21, 2007. The trip is open to equity analysts. A charter
will be departing from Toronto early in the morning on August 20, returning
late on August 21. Interested parties should contact Hazel Winchester at (416)
847-3717 or as soon as possible as spaces are

    Agnico-Eagle Options El Realito Project

    Agnico-Eagle has recently entered into an exploration and purchase option
agreement with a private Mexican company regarding the El Realito Property in
Sinaloa, Mexico. This property is on the southern extension of the same trend
of the Sierra Madre Occidental Range that hosts Agnico-Eagle's Pinos Altos
    The El Realito Property comprises approximately 1,800 hectares of mining
concessions located approximately 40 kilometres northeast of the town of
Culiacan. The agreement contemplates making a series of payments to the vendor
of up to $3.5 million over the 24 month exploration work period. Agnico-Eagle
may exercise an option to purchase the property for a fixed price at any time
during the term of the agreement. The exploration program which includes
prospecting, mapping, trenching and drilling has commenced and is anticipated
to total up to $2.9 million for 2007.
    This property has numerous gold showings and a history of small scale
mining. The gold structure can be followed over a strike length of
approximately two kilometres and represents an epithermal system similar to
Pinos Altos.
    To date, Agnico-Eagle has completed surface trenching, sampling and
geological mapping. Minor visible gold was observed in several locations.
Historically, the deposit was worked by a limited number of artesianal miners,
but remains largely untested. A drilling program of 20,000 metres has been
outlined and the geologists are on the site to prepare the summer program.

    Scientific and Technical Data

    Roger Doucet, P.Geo., the Company's Exploration Manager for Mexico, who
is a Qualified Person, has prepared and reviewed the exploration results for
Pinos Altos that are disclosed in this press release. At Pinos Altos, the
diamond drilling equipment recovers either NQ (48 mm diameter) or HQ (64 mm
diameter) core samples. The drill core selected for analysis was sawed in half
with one half sent to a commercial analytical laboratory and the other half
retained for future reference or use.
    Agnico-Eagle has established an Analytical Quality Assurance Program for
sampling at Pinos Altos. This program includes the systematic addition of
blank samples, duplicate samples and certified standards to each batch of
samples sent for analysis to commercial accredited laboratories. Blank samples
are used to check for possible contamination in the laboratories; duplicate
samples quantify overall precision while certified standards determine the
analytical accuracy. In addition approximately 10% of the assayed samples are
sent to a second certified laboratory for check analysis.
    ALS Chemex, an accredited exploration sample analysis laboratory either
collects the split samples directly from the project site or they are
delivered by the Company using a secure chain of custody procedure. The
samples are prepared by ALS Chemex either in Chihuahua, Chihuahua or
Hermosillo, Sonora and the analysis is done in Vancouver, British Columbia.
BSI Inspectorate an accredited laboratory in Reno, Nevada, re-analyses all of
the samples selected for check assaying.
    The gold assaying method, using a 30 gram charge, is by Fire Assay with
either an atomic adsorption finish or, if the result is greater than 3 parts
per million of gold, a gravimetric finish as requested by the project
geologist. Silver analysis, from a 30 gram charge, is either by three acid
digestion followed by atomic absorption or, if the atomic absorption results
is greater than 200 parts per million of silver by Fire Assay with a
gravimetric finish as requested.

    Creston Colorado/Mascota Drill Hole Locations and Orientations

    HOLE-ID         NORTH      EAST       ELEV.    AZIMUTH     DIP    LENGTH
    CM-07-29        760736   3135879      1994       090       -45     219.0
    CM-07-30        760700   3135881      1985       090       -45     235.0
    CM-07-31        760781   3135929      2003       090       -45     170.0
    CM-07-32A       760812   3135985      2002       090       -55      50.7
    CM-07-33        760765   3135988      1995       090       -45     174.0
    CM-07-34        760715   3135934      1998       090       -45     253.0

    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
changes in gold prices consistent with its policy of no forward gold sales. It
has paid a cash dividend for 25 consecutive years.

For further information:

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

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