Agnico Eagle's Q3 2025 Earnings Call: Contradictions on Capital Allocation, Hope Bay Timeline, Tax Deferrals, Resource Growth, and Dividend Strategy

Date of Call: October 30, 2025

Financials Results

• Revenue: $3.1B, record revenue
• EPS: $2.16 per share (adjusted), record adjusted earnings of $1.1B

Guidance:

• Full-year production expected at the midpoint of the 3.4M oz guidance range (77% of guidance achieved YTD).
• Full-year cash costs expected at or near the top end of guidance ~$965/oz; Q3 cash cost $994/oz (would be $933/oz excluding higher royalties).
• Full-year AISC expected close to top end of guidance ~$1,300/oz; Q3 AISC was $1,373/oz.
• Significant cash tax payment of ~ $1.2B expected in Q1 2026.
• Exploration budget ~ $525M for the year; Hope Bay PEA expected H1 2026 (>40% engineering).

Business Commentary:

* Record Financial Performance: - Agnico Eagle Mines reported record revenue of $3.1 billion for Q3 2025, record adjusted earnings of $1.1 billion, and record adjusted EBITDA of $2.1 billion. - This was driven by strong gold prices, solid production, and continued cost control.

• Shareholder Returns and Capital Allocation:
• The company returned $350 million to shareholders through dividends and share buybacks in Q3 2025, adding to a cumulative total of over $5 billion returned since 2022.

• This significant return was due to strong financial performance and a focus on increasing returns over the long term.

• Exploration and Reserve Growth:

• Agnico Eagle exceeds its drilling target by 9% year-to-date, completing over 370,000 meters in Q3, with reserve and resource growth expected by year-end.

• The company's strong exploration program is driven by exceptional results and a focus on securing long-term growth.

• Continued Focus on Operational Efficiency:

• The initiative at Kittila mine led to a 13% year-over-year increase in tonnes mined per day, despite no increase in equipment or personnel.
• This was achieved by leveraging technology and improving productivity, even at higher gold prices.

Sentiment Analysis:

Overall Tone: Positive

• Management repeatedly called these "record financial results" (revenue $3.1B, adjusted EBITDA $2.1B), raised net cash to $2.2B, repaid $400M of debt, returned $350M to shareholders this quarter and noted a Moody's upgrade to A3 — all signaling a positive tone.

Q&A:

• Question from Fahad Tariq (Jefferies LLC): Can you talk about the noncore investments in critical minerals, the new subsidiary, what investments will be vended/spun in and whether it will make equity investments or project development?
  Response: They created a small independent subsidiary for non-gold critical-mineral investments (e.g., Canada Nickel), seeded it with capital, will let the team source opportunities; Agnico is not obliged to fund further but retains first look.

• Question from Fahad Tariq (Jefferies LLC): How are government relations going with the new federal government in Canada and any opportunities for Nunavut infrastructure?
  Response: Management is pleased — the new government is more engaged and accessible, providing increased dialogue and attention to mining's role in Canada.

• Question from Anita Soni (CIBC Capital Markets): For Hope Bay, what will you deliver by year-end in terms of a resource update and what are you targeting for the 2027 study?
  Response: Expect a PEA in H1 2026 with >40% engineering; year-end will update indicated/inferred resources and management targets a PFS with updated reserves/resources by end-2026 supporting the development scenario.

• Question from Anita Soni (CIBC Capital Markets): What inflation expectations are you modeling into 2026 and how should we think about cost pressures and grade/moving parts?
  Response: They see overall cost inflation ~6–7% (labor 3–5%); guidance has historically risen ~3% and they expect similar 6–7% pressure next year while continuing to pursue optimizations to offset inflation and noting higher royalties from gold price.

• Question from John Tumazos (John Tumazos Very Independent Research, LLC): Could you review the rigs operating across the company and meter targets (reference 29 rigs at Malartic and increased meters to ~220k)?
  Response: About 120 rigs across the portfolio (no quarter-over-quarter change); productivity improvements (unattended drilling) let them target ~1.25–1.3M meters by year-end without materially higher spend and the global exploration budget is ~ $525M.

• Question from John Tumazos (John Tumazos Very Independent Research, LLC): Can you run through the sites with the most rigs (how many at each)?
  Response: Key counts provided: ~29 rigs at Malartic, ~9 at Detour, ~12 at Macassa, ~6 at Hope Bay; detailed breakdown to be provided offline.

• Question from Tanya Jakusconek (Scotiabank Global Banking and Markets): For reserve and resource replacement at year-end 2025 — is growth limited to East Gouldie, Detour and Hope Bay?
  Response: They expect net growth year-over-year (despite mining depletion) — roughly +0.25–0.5M oz — with full replacement at sites like Kittila and additions including Marban contributing to growth.

• Question from Tanya Jakusconek (Scotiabank Global Banking and Markets): On reserve/resource pricing — given reserves at $1,450 and resources at $1,750, should we assume ~5–6% inflation adjustments for year-end pricing?
  Response: They will assess on a mine-by-mine basis; intention is to keep cutoff grades stable and only flex price/cutoffs selectively where appropriate (e.g., excess milling capacity), not a blanket lowering of cutoffs.

• Question from Tanya Jakusconek (Scotiabank Global Banking and Markets): So should we view year-end changes as real replacement of ounces rather than price-driven changes?
  Response: Yes — primary focus is on actual ounce replacement rather than relying on higher gold prices to inflate reported ounces.

• Question from Tanya Jakusconek (Scotiabank Global Banking and Markets): On the equity portfolio (e.g., Perpetua), when you sell positions do proceeds get reinvested into other equities or treated as general cash/shareholder-return funding?
  Response: Proceeds are company cash that belong to owners and compete for allocation (returns, reinvestment, projects); they are not automatically earmarked for reinvestment into equities.

• Question from Tanya Jakusconek (Scotiabank Global Banking and Markets): Within the asset portfolio, any noncore/smaller assets in Mexico or elsewhere you’re likely to dispose of?
  Response: They continuously evaluate small/nonstrategic assets and will consider disposals when it maximizes shareholder value; decisions are asset-specific and have been reviewed case-by-case.

Contradiction Point 1

Capital Allocation and Project Acceleration

It involves changes in capital allocation strategies and project acceleration plans, which are crucial for understanding the company's growth and investment priorities.

What are the capital allocation plans for organic opportunities, and should additional capital be allocated to projects like Detour, Hope Bay, and Canadian Malartic? - Anita Soni(CIBC Capital Markets)

2025Q3: We plan to accelerate projects with good returns, including Detour and Hope Bay. The current gold price environment allows for faster progress on good projects. - James R. Porter(CFO), Ammar Al-Joundi(CEO)

Can capital spending be accelerated to bring production forward in 2026 and beyond? - Daniel Edward Major(UBS Investment Bank)

2025Q2: Yes, there is potential to accelerate capital spending on projects like Hope Bay. This could result in higher long-term returns and value creation for shareholders. - James R. Porter(CFO)

Contradiction Point 2

Inference of Hope Bay Start-up Timeline

It involves differing statements regarding the expected timeline for the start-up of Hope Bay, which could impact investor expectations and strategic planning.

What are your expectations for the Hope Bay resource update by year-end and the 2027 study targets? - Anita Soni(CIBC Capital Markets)

2025Q3: A PEA study with engineering at over 40% is expected by mid-year 2026. Reserve remains as last year; indicated and inferred resources will update, integrating new results. A new PFS-supported resource filing is expected by end-2026. - Dominique Girard(COO)

When will Hope Bay start up and how does it fit into your growth plan? - Anita Soni(CIBC World Markets)

2024Q4: The focus for Hope Bay in 2025 is to finalize the project scope, incorporating the Patch 7 resources, and to reach 40% engineering completion by year-end. The project is expected to be derisked by early 2026, with more details provided to the market in the first half of 2026. The start-up would be more early next decade, enhancing Nunavut's potential for significant gold production. - Dominique Girard(COO)

Contradiction Point 3

Free Cash Flow and Tax Deferrals

It involves the impact of tax deferrals on free cash flow, which is a critical aspect of the company's financial management and investor expectations.

What are 2026 cost expectations considering inflation and grade changes? - Anita Soni(CIBC Capital Markets)

2025Q3: Tax deferrals were a significant factor this quarter. We expect a large cash tax payment in Q1 2026 due to installment payments based on prior year profitability. - James R. Porter(CFO)

How will tax deferrals impact free cash flow going forward? - Joshua Mark Wolfson(RBC Capital Markets)

2025Q2: Tax deferrals were a significant factor this quarter. We expect a large cash tax payment in Q1 2026 due to installment payments based on prior year profitability. - James R. Porter(CFO)

Contradiction Point 4

Resource and Reserve Growth

It involves expectations regarding resource and reserve growth, which are crucial for understanding the company's long-term production capabilities and strategic planning.

What is your strategy for reserve and resource replacement this year, and how will you address inflation? - Tanya Jakusconek(Scotiabank)

2025Q3: Agnico Eagle aims for net reserve growth of 0.25 to 0.5 million ounces by year-end. - Guy Gosselin(EVP of Exploration)

What is your minimum cash balance you maintain, and what capital should be allocated to projects like Detour and Hope Bay? - Tanya M. Jakusconek(Scotiabank)

2025Q2: We are confident of achieving our target of net reserve growth of 1 million ounces by year-end. - Guy Gosselin(EVP of Exploration)

Contradiction Point 5

Dividend and Share Buyback Strategy

It involves differing statements on the company's approach to distributing cash to shareholders, which is a key consideration for investors.

Can you provide details on the company's operating rigs? - John Tumazos (John Tumazos Very Independent Research, LLC)

2025Q3: We aim for $1 billion in net cash and gold price stability before reviewing the dividend. - James Porter(Executive VP of Finance & CFO)

How will you manage your investment portfolio? - Anita Soni (CIBC World Markets)

2025Q1: We aim to return $1 billion to shareholders over the next 12 to 18 months. - James Porter(EVP, Finance and CFO)