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<SEC-DOCUMENT>0000912057-02-041138.txt : 20021106
<SEC-HEADER>0000912057-02-041138.hdr.sgml : 20021106
<ACCEPTANCE-DATETIME>20021106145601
ACCESSION NUMBER:		0000912057-02-041138
CONFORMED SUBMISSION TYPE:	F-10/A
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20021106

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AGNICO EAGLE MINES LTD
		CENTRAL INDEX KEY:			0000002809
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		F-10/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-100850
		FILM NUMBER:		02811038

	BUSINESS ADDRESS:	
		STREET 1:		401 BAY ST STE 2302
		STREET 2:		C/O BARRY LANDEN
		CITY:			TORONTO ONTARIO CANA
		STATE:			A6
		BUSINESS PHONE:		4169471212

	MAIL ADDRESS:	
		STREET 1:		TROUTMAN SANDERS LLP
		STREET 2:		1660 INTERNATIONAL DRIVE, STE. 600
		CITY:			MCLEAN
		STATE:			VA
		ZIP:			22102
</SEC-HEADER>
<DOCUMENT>
<TYPE>F-10/A
<SEQUENCE>1
<FILENAME>a2092806zf-10a.txt
<DESCRIPTION>FORM F-10A
<TEXT>
<Page>

    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 6, 2002


                                                     REGISTRATION NO. 333-100850
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------

                                AMENDMENT NO. 1
                                       TO
                                   FORM F-10
                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933
                             ----------------------

                           AGNICO-EAGLE MINES LIMITED
             (Exact name of Registrant as specified in its charter)

<Table>
<Caption>

<S>                                    <C>                                           <C>
           ONTARIO, CANADA                                 1041                                     NOT APPLICABLE
 (Province or other jurisdiction of            (Primary Standard Industrial              (I.R.S. Employer Identification No.,
    incorporation or organization)             Classification Code Number)                          if applicable)
</Table>

       145 KING STREET EAST, SUITE 500, TORONTO, ONTARIO, CANADA M5C 2Y7,
                                 (416) 947-1212
   (Address and telephone number of Registrant's principal executive offices)

                               DAVID J. LEVENSON
                              TROUTMAN SANDERS LLP
                      1660 INTERNATIONAL DRIVE, SUITE 600
                             MCLEAN, VIRGINIA 22102
                                 (703) 734-4328
                              (703) 734-4340 (FAX)
 (Name, address and telephone number of agent for service in the United States)
                           -------------------------

                                   COPIES TO:

<Table>
<S>                          <C>                          <C>                          <C>
         SEAN BOYD                 BRICE T. VORAN               PHILIPPE TARDIF             PATRICIA OLASKER
Agnico-Eagle Mines Limited       Shearman & Sterling             Lang Michener           Davies Ward Phillips &
   145 King Street East          Commerce Court West        BCE Place, Suite 2500             Vineberg LLP
        Suite 500            199 Bay Street, Suite 4405         181 Bay Street           1 First Canadian Place
 Toronto, Ontario M5C 2Y7     Toronto, Ontario M5L 1E8     Toronto, Ontario M5J 2T7            Suite 4400
      (416) 947-1212               (416) 360-8484               (416) 360-8600          Toronto, Ontario M5X 1B1
   (416) 367-4681 (fax)         (416) 360-2958 (fax)         (416) 304-3761 (fax)            (416) 863-0900
                                                                                          (416) 863-0871 (fax)
</Table>

                               ------------------

        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
  AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
                          PROVINCE OF ONTARIO, CANADA
               (Principal jurisdiction regulating this offering)

It is proposed that this filing shall become effective (check appropriate box):

<Table>
<C>  <C>  <C>  <S>
A.   /X/  Upon filing with the Commission, pursuant to Rule 467(a) (if in
          connection with an offering being made contemporaneously in the
          United States and Canada).

B.   / /  At some future date (check appropriate box below).
     1.   / /  Pursuant to Rule 467(b) on (      ) at (  ) (designate a
               time not sooner than seven calendar days after filing).
     2.   / /  Pursuant to Rule 467(b) on (      ) at (  ) (designate a
               time seven calendar days or sooner after filing) because the
               securities regulatory authority in the review jurisdiction
               has issued a receipt or notification of clearance on (  ).
     3.   / /  Pursuant to Rule 467(b) as soon as practicable after
               notification of the Commission by the Registrant or the
               Canadian securities regulatory authority of the review
               jurisdiction that a receipt or notification of clearance has
               been issued with respect hereto.
     4.   / /  After the filing of the next amendment to this form (if
               preliminary material is being filed).
</Table>

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to the home jurisdiction's shelf prospectus
offering procedures, check the following box.   / /
                             ----------------------

                        CALCULATION OF REGISTRATION FEE


<Table>
<Caption>
                                                               PROPOSED MAXIMUM     PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE     AMOUNT TO BE      OFFERING PRICE PER   AGGREGATE OFFERING        AMOUNT OF
              REGISTERED                     REGISTERED            SECURITY               PRICE         REGISTRATION FEE(3)
<S>                                      <C>                  <C>                  <C>                  <C>
Units(1)(2).......................           13,800,000            US$13.90          US$191,820,000        US$17,647.44
Common Shares(2)..................           13,800,000               --                   --                   --
Warrants to Purchase Common
 Shares(2)........................            6,900,000               --                   --                   --
Common Shares Underlying
 Warrants(2)......................            6,900,000            US$19.00          US$131,100,000        US$12,061.20
</Table>



(1) Each Unit consists of one common share and one-half of a common share
    purchase warrant. Each whole warrant entitles the holder to purchase one
    common share.



(2) Includes shares which the underwriters have the option to purchase from the
    company to cover over-allotments, if any.



(3) $28,513.10 of such fee was previously paid upon the initial filing of this
    registration statement. The additional registration fee is $1,195.54.


- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Page>
                                     PART I
         INFORMATION REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS

                                      I-1
<Page>
PROSPECTUS

                          12,000,000 COMMON SHARES AND
                       6,000,000 SHARE PURCHASE WARRANTS


                                     [LOGO]


                           AGNICO-EAGLE MINES LIMITED


                                     UNITS
                               ------------------


    Agnico-Eagle Mines Limited (the "Company") is offering in Canada and the
United States a total of 12,000,000 units of the Company (the "Units"), each
Unit consisting of one common share of the Company (a "Common Share") and
one-half of one share purchase warrant of the Company (a "Warrant"), at a price
of $13.90 per Unit.



    Each whole Warrant will entitle the holder to purchase one Common Share for
a price of $19.00 at any time on or prior to five years from the date of the
closing of this offering. The Warrants will be issued in registered form. The
Common Shares and the Warrants comprising the Units will separate immediately
upon the closing of this offering. See "Details of the Offering".



    The outstanding Common Shares of the Company are listed on The Toronto Stock
Exchange (the "TSX") under the symbol "AGE" and the New York Stock Exchange (the
"NYSE") under the symbol "AEM". The TSX has conditionally approved the listing
of the Common Shares and Warrants comprising the Units and the Common Shares
issuable on exercise of the Warrants. Listing is subject to the Company
fulfilling all of the requirements of the TSX on or before January 28, 2003,
including, in the case of the Warrants, distribution of the Warrants to a
minimum number of public security holders. The NYSE has conditionally approved
the listing of the Common Shares comprising part of the Units and the Common
Shares issuable on exercise of the Warrants, subject to official notice of
issuance. The Company's application to include the Warrants for quotation on the
Nasdaq National Market ("Nasdaq") has been conditionally approved. Quotation is
subject to fulfilling all of the requirements of Nasdaq, including distribution
of Warrants to a minimum number of public security holders. It is anticipated
that Warrants will be listed on the TSX under the symbol "AGE.WT.U" and quoted
on Nasdaq under the symbol "AEMLW". The closing price of the Common Shares on
November 5, 2002 on the TSX was C$19.12 per share and on the NYSE was
$12.28 per share.


    INVESTING IN THE COMMON SHARES AND WARRANTS COMPRISING THE UNITS INVOLVES
RISKS THAT ARE DESCRIBED IN THE "RISK FACTORS" SECTION BEGINNING ON PAGE 4 OF
THIS PROSPECTUS.

    WE ARE PERMITTED TO PREPARE THIS PROSPECTUS IN ACCORDANCE WITH CANADIAN
DISCLOSURE REQUIREMENTS, WHICH ARE DIFFERENT FROM THOSE OF THE UNITED STATES.
ALTHOUGH WE CURRENTLY PREPARE OUR FINANCIAL STATEMENTS IN ACCORDANCE WITH UNITED
STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, SOME FINANCIAL STATEMENTS
INCORPORATED BY REFERENCE HEREIN HAVE, AS INDICATED, BEEN PREPARED IN ACCORDANCE
WITH CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND ARE SUBJECT TO
CANADIAN AUDITING AND AUDITOR INDEPENDENCE STANDARDS. AS A RESULT, THESE
FINANCIAL STATEMENTS MAY NOT BE COMPARABLE TO FINANCIAL STATEMENTS OF UNITED
STATES COMPANIES.

    OWNING THE COMMON SHARES AND THE WARRANTS MAY SUBJECT YOU TO TAX
CONSEQUENCES BOTH IN THE UNITED STATES AND CANADA. THIS PROSPECTUS MAY NOT
DESCRIBE THESE TAX CONSEQUENCES FULLY. YOU SHOULD READ THE TAX DISCUSSION UNDER
"CANADIAN FEDERAL INCOME TAX CONSIDERATIONS" AND "UNITED STATES FEDERAL INCOME
TAX CONSIDERATIONS".

    YOUR ABILITY TO ENFORCE CIVIL LIABILITIES UNDER THE UNITED STATES FEDERAL
SECURITIES LAWS MAY BE AFFECTED ADVERSELY BECAUSE WE ARE INCORPORATED IN
ONTARIO, SOME OF OUR OFFICERS AND DIRECTORS AND SOME OF THE EXPERTS NAMED IN
THIS PROSPECTUS ARE CANADIAN RESIDENTS, AND SUBSTANTIALLY ALL OF OUR ASSETS AND
THE ASSETS OF THOSE OFFICERS, DIRECTORS AND EXPERTS ARE LOCATED OUTSIDE OF THE
UNITED STATES.
                              --------------------


<Table>
<Caption>
                                                              PER UNIT            TOTAL
                                                              --------            -----
<S>                                                           <C>              <C>
Public offering price.......................................   $13.90          $166,800,000
Underwriting commission.....................................    $.556            $6,672,000
Proceeds, before expenses, to Agnico-Eagle Mines Limited....  $13.344          $160,128,000
</Table>


    The public offering price for Units offered in the United States is payable
in US dollars and the public offering price for Units offered in Canada is
payable in Canadian dollars. The US dollar amount is the equivalent of the
Canadian price of the Units being offered hereby.


    The Underwriters may also purchase up to 1,800,000 Units from the Company at
the public offering price, less the underwriting commission, within 30 days
after the date of this prospectus solely to cover over-allotments, if any.


    Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.


    The Units will be ready for delivery on or about November 14, 2002.

                              --------------------

MERRILL LYNCH & CO.                                                TD SECURITIES


SCOTIA CAPITAL (USA) INC.



             YORKTON CAPITAL INC.



                            CIBC WORLD MARKETS



                                         SALOMON SMITH BARNEY



                                                     DUNDEE SECURITIES



                                                              SPROTT SECURITIES

                               ------------------


                The date of this prospectus is November 6, 2002.

<Page>
                               TABLE OF CONTENTS


<Table>
<Caption>
                                            PAGE
                                          --------
<S>                                       <C>
THE OFFERING............................         3
RISK FACTORS............................         4
FORWARD-LOOKING STATEMENTS..............         9
THE COMPANY.............................         9
RECENT DEVELOPMENTS.....................        11
USE OF PROCEEDS.........................        13
CAPITALIZATION..........................        14
DESCRIPTION OF SHARE CAPITAL............        15
DIVIDEND POLICY.........................        15
CANADIAN FEDERAL INCOME TAX
  CONSIDERATIONS........................        16
UNITED STATES FEDERAL INCOME TAX
  CONSIDERATIONS........................        19
DETAILS OF THE OFFERING.................        22
</Table>



<Table>
<Caption>
                                            PAGE
                                          --------
<S>                                       <C>
PLAN OF DISTRIBUTION....................        25
RELATIONSHIP BETWEEN ISSUER AND CERTAIN
  UNDERWRITERS..........................        27
LEGAL MATTERS...........................        27
AUDITORS, TRANSFER AGENT AND
  REGISTRAR.............................        27
DOCUMENTS INCORPORATED BY REFERENCE.....        27
AVAILABLE INFORMATION...................        28
ENFORCEABILITY OF CERTAIN CIVIL
  LIABILITIES...........................        29
DOCUMENTS FILED AS PART OF THE
  REGISTRATION STATEMENT................        29
</Table>


    Only the information contained or incorporated by reference in this
prospectus should be relied upon. The Company has not authorized any other
person to provide different information. If anyone provides different or
inconsistent information, it should not be relied upon. The Units offered
hereunder may not be offered or sold in any jurisdiction where the offer or sale
is not permitted. Unless otherwise indicated, the statistical, operating and
financial information contained in this prospectus is presented as at
December 31, 2001. It should be assumed that the information appearing in this
prospectus and the documents incorporated by reference is accurate only as of
their respective dates. The Company's business, financial condition, results of
operations and prospects may have changed since those dates.

    IN THIS PROSPECTUS, UNLESS STATED OTHERWISE, "AGNICO-EAGLE", THE "COMPANY",
"WE", "US", AND "OUR" REFER TO AGNICO-EAGLE MINES LIMITED AND ITS CONSOLIDATED
SUBSIDIARY.


    The Company publishes its consolidated financial statements in United States
dollars ("US dollars"). Unless otherwise indicated, all references to "$", "US$"
or "dollar" in this prospectus refer to US dollars and "C$" refers to Canadian
dollars. For information purposes, the noon buying rate in The City of New York
for cable transfers in Canadian dollars as certified for customs purposes by the
Federal Reserve Bank of New York (the "Noon Buying Rate") on October 30, 2002
was US$1.00 = C$1.5677 and on November 5, 2002 was US$1.00 = C$1.5563.


    To reflect the Company's substantial U.S. shareholder base and to maintain
comparability with other companies in the gold sector, the Company changed its
primary basis of reporting to United States generally accepted accounting
principles ("US GAAP") effective January 1, 2002. For statutory reporting
purposes in Canada, the Company continues to prepare and file consolidated
financial statements and related management discussion and analysis under
Canadian generally accepted accounting principles ("Canadian GAAP"). UNLESS
OTHERWISE STATED HEREIN ALL NUMBERS USED HEREIN WERE PREPARED IN ACCORDANCE WITH
CANADIAN GAAP.

    The 2001 Ore Reserve Report dated February 25, 2001 relating to the
Company's LaRonde Division prepared by Marc Legault, the LaRonde Division's
Chief Geologist, contains information concerning drilling methods, sampling
methods and approach, sample preparation, analysis and security, quality control
procedures, data verification and laboratories used for analysis, which
procedures, techniques and laboratories were used by the Company in connection
with the scientific and technical information provided in this prospectus. Marc
Legault is a qualified person as defined under the Canadian Securities
Administrators' National Instrument 43-101 and has supervised the preparation of
and verified the information that forms the basis for the scientific and
technical data contained in this prospectus.

                                       2
<Page>
                                  THE OFFERING

    THE FOLLOWING IS A BRIEF SUMMARY OF SOME OF THE TERMS OF THIS OFFERING. FOR
A MORE COMPLETE DESCRIPTION OF THE TERMS OF THE UNITS, SEE "DETAILS OF THE
OFFERING".


<Table>
<S>                                     <C>
ISSUER:                                 The Company is an established Canadian gold producer with
                                        mining operations located in northwestern Quebec and
                                        exploration and development activities in Canada and the
                                        southwestern United States (principally Nevada). The
                                        Company's operating history includes almost three decades of
                                        continuous gold production, primarily from underground
                                        operations. Since its formation in 1972, the Company has
                                        produced approximately three million ounces of gold. In
                                        2001, the Company produced 234,860 ounces of gold at an
                                        average cash cost of $155 per ounce, net of revenues
                                        received from the sale of zinc, silver and copper
                                        by-products. The Company's principal operating divisions are
                                        the LaRonde Division and the Exploration Division. The
                                        LaRonde Division consists of the LaRonde Mine, including the
                                        El Coco Property, which is 100% owned and operated by the
                                        Company. The LaRonde Mine, with its single operating
                                        production shaft, currently accounts for all of the
                                        Company's gold production. The Company, through its
                                        Exploration Division and its 67.4% owned subsidiary, Sudbury
                                        Contact Mines Limited ("Sudbury Contact"), focuses its
                                        exploration activities primarily on the identification of
                                        new gold reserves and development opportunities in proven
                                        producing regions in Canada and the southwestern United
                                        States. In addition, Sudbury Contact engages in exploration
                                        for deposits of diamonds in northern Ontario.

DETAILS OF THE OFFERING:                12,000,000 Units (13,800,000 Units if the Underwriters'
                                        over-allotment option is exercised in full), each consisting
                                        of one Common Share and one-half of one Warrant.

                                        COMMON SHARES

                                        For a description of the attributes of the Common Shares,
                                        see "Description of Share Capital -- Common Shares".

                                        WARRANTS

                                        Each whole Warrant will entitle the holder to purchase one
                                        Common Share at a price of US$19.00, subject to adjustment
                                        in specified events. Warrants will be exercisable at any
                                        time prior to 5:00 p.m. (Toronto time) on the date which is
                                        five years from the date of the closing of this offering,
                                        after which the Warrants will expire. Holders of Warrants
                                        may elect to pay the exercise price in the Canadian dollar
                                        equivalent of the US dollar exercise price. See "Details of
                                        the Offering -- Warrants".

PRICE:                                  C$21.79 per Unit (US$13.90 per Unit).

USE OF PROCEEDS:                        The net proceeds of this offering are estimated to be
                                        C$249.6 million (US$159.2 million based on the Noon Buying
                                        Rate on October 30, 2002), determined after deducting the
                                        underwriting commission and estimated expenses of this
                                        offering payable by the Company and assuming no exercise of
                                        the over-allotment option. The net proceeds of this offering
                                        will be used to fund future potential acquisitions, capital
                                        expenditures and for other general corporate purposes.
                                        Pending such application, the net proceeds of the offering
                                        will be temporarily added to cash and short-term deposits
                                        and applied to temporarily reduce amounts outstanding under
                                        the Company's revolving bank credit facility. Although the
                                        Company is examining several acquisition opportunities, no
                                        contract, arrangement or understanding currently exists
                                        regarding any material acquisition.
</Table>


                                       3
<Page>
                                  RISK FACTORS

    AN INVESTMENT IN THE COMMON SHARES AND THE WARRANTS COMPRISING THE UNITS
INVOLVES CERTAIN RISKS. BEFORE MAKING AN INVESTMENT DECISION, PROSPECTIVE
PURCHASERS SHOULD CAREFULLY CONSIDER ALL OF THE INFORMATION IN THIS PROSPECTUS
AND IN THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN AND, IN PARTICULAR, SHOULD
EVALUATE THE FOLLOWING RISK FACTORS. HOWEVER, THE RISKS DESCRIBED BELOW ARE NOT
THE ONLY ONES FACING THE COMPANY. ADDITIONAL RISKS NOT CURRENTLY KNOWN TO THE
COMPANY OR THAT THE COMPANY CURRENTLY DEEMS IMMATERIAL MAY ALSO IMPAIR THE
COMPANY'S BUSINESS OPERATIONS.

RECENT LOSSES

    Although the Company reported net earnings for the nine months ended
September 30, 2002, it incurred net losses in the three months ended
September 30, 2002 and in each of the last five years. The Company's
profitability depends on the price of gold, gold production, cash operating
costs, the prices and production levels of by-product zinc, silver and copper
and other factors discussed in this section of the prospectus. Substantially all
of these factors are beyond the Company's control and there can be no assurance
that the Company will sustain profitability in the near future.

METAL PRICE VOLATILITY

    The Company's earnings are directly related to the price of gold as revenues
are derived primarily from gold mining. The Company's general policy is not to
sell forward its future gold production. Gold prices fluctuate widely and are
affected by numerous factors beyond the Company's control, including central
bank sales, producer hedging activities, expectations of inflation, the relative
exchange rate of the US dollar with other major currencies, global and regional
demand and political and economic conditions and production costs in major gold
producing regions. The aggregate effect of these factors is impossible to
predict with accuracy. Gold prices are also affected by worldwide production
levels. In addition, the price of gold has on occasion been subject to very
rapid short-term changes because of speculative activities. Fluctuations in gold
prices may materially adversely affect the Company's financial performance or
results of operations. If the market price of gold falls below the Company's
production costs and remains at such a level for any sustained period, the
Company will experience losses and may curtail or suspend some or all of its
exploration, development and mining activities. The prices received for the
Company's by-products (zinc, silver and copper) affect the Company's ability to
meet its targets for cost per ounce of gold produced. By-product prices
fluctuate widely and are affected by numerous factors beyond the Company's
control.

    The volatility of gold prices is illustrated in the following table which
sets forth, for the periods indicated, the high and low afternoon fixing prices
for gold on the London Bullion Market (the "London P.M. Fix") and the average
gold prices received by the Company.


<Table>
<Caption>
                                                               2002
                                                         (TO NOVEMBER 5)      2001       2000       1999       1998       1997
                                                         ----------------   --------   --------   --------   --------   --------
<S>                                                      <C>                <C>        <C>        <C>        <C>        <C>
High price ($ per ounce)...............................         330           293        313        326        313        367
Low price ($ per ounce)................................         277           256        264        253        273        283
Average price received ($ per ounce)...................         308           273        278        274        296        336
</Table>



    On November 5, 2002, the London P.M. Fix was $319 per ounce of gold.


    Based on 2002 production estimates, the approximate sensitivities of the
Company's after-tax earnings and cash flows to a 10% change in metal prices from
2001 market average prices are as follows:

<Table>
<Caption>
                                                              EARNINGS PER SHARE   CASH FLOW PER SHARE
                                                              ------------------   -------------------
<S>                                                           <C>                  <C>
Gold........................................................         $0.07                $0.12
Zinc........................................................         $0.02                $0.03
Silver......................................................         $0.01                $0.02
</Table>

    Sensitivities of the Company's after-tax earnings and cash flows to changes
in metal prices will increase with increased production.

                                       4
<Page>
DEPENDENCE ON THE LARONDE DIVISION

    The Company's mining and milling operations at the LaRonde Division account
for all of the Company's gold production and will continue to account for all of
its gold production in the future unless additional properties are acquired or
brought into production. Any adverse condition affecting mining or milling
conditions at the LaRonde Division could be expected to have a material adverse
effect on the Company's financial performance and results of operations until
such time as the condition is remedied. In addition, the Company's principal
development program is the expansion of the LaRonde Division. This program
involves the exploration and extraction of ore from new zones and may present
new or different challenges for the Company. There can be no assurance that the
Company's current exploration and development programs at the LaRonde Division
will result in any new economically viable mining operations or yield new
mineral reserves to replace and expand current mineral reserves.

COST OF EXPLORATION AND DEVELOPMENT PROGRAMS

    The Company's profitability is significantly affected by the costs and
results of its exploration and development programs. As mines have limited lives
based on proven and probable mineral reserves, the Company actively seeks to
replace and expand its reserves, primarily through exploration and development
and, from time to time, through strategic acquisitions. Exploration for minerals
is highly speculative in nature, involves many risks and frequently is
unsuccessful. Among the many uncertainties inherent in any gold exploration and
development program are the location of economic ore bodies, the development of
appropriate metallurgical processes, the receipt of necessary governmental
permits and the construction of mining and processing facilities. In addition,
substantial expenditures are required to pursue such exploration and development
activities. Assuming discovery of an economic ore body, depending on the type of
mining operation involved, several years may elapse from the initial phases of
drilling until commercial operations are commenced and during such time the
economic feasibility of production may change. Accordingly, there can be no
assurance that the Company's current exploration and development programs will
result in any new economically viable mining operations or yield new reserves to
replace and expand current reserves.

TOTAL CASH COSTS OF GOLD PRODUCTION AT THE LARONDE MINE

    The Company's total cash operating costs to produce an ounce of gold are
dependent on a number of factors, including primarily the prices and production
levels of by-product zinc, silver and copper, the revenue from which is offset
against the cost of gold production, the US dollar/Canadian dollar exchange rate
and the net profit royalty on metal production from the adjacent El Coco
Property, which is affected by all of these factors and the gold price. As these
factors are beyond the Company's control, there can be no assurance that the
Company will continue to maintain its status as a low cash cost gold producer.

RESTRICTIONS IN THE BANK CREDIT FACILITY

    The Company's $125 million revolving bank credit facility limits, among
other things, the Company's ability to incur additional indebtedness, pay
dividends or make payments in respect of the Common Shares, make investments or
loans, transfer the Company's assets and make expenditures relating to the
LaRonde Mine or the El Coco Property, except as set forth in a mine development
plan delivered pursuant to the credit facility and the ability of its
subsidiaries to make expenditures in excess of $5 million in any fiscal year in
excess of those set forth in the mine development plan. Further, the bank credit
facility requires the Company to maintain specified financial ratios and satisfy
financial condition tests. Events beyond the Company's control, including
changes in general economic and business conditions, may affect the Company's
ability to satisfy these covenants, which could result in a default under the
bank credit facility. If an event of default under the bank credit facility
occurs, the lenders could elect to declare all principal amounts outstanding
thereunder, together with accrued interest, to be immediately due and payable
and to enforce their security interest over substantially all property relating
to the LaRonde Mine and the El Coco Property. An event of default under the bank
credit facility may also give rise to an event of default under existing and
future debt agreements and, in such event, the Company may not have sufficient
funds to repay amounts owing under such agreements.

                                       5
<Page>
COMPETITION AND SCARCITY OF MINERAL LANDS

    Many companies and individuals are engaged in the mining business, including
large, established mining companies with substantial capabilities and long
earnings records. There is a limited supply of desirable mineral lands available
for claim staking, lease or other acquisition in the areas where the Company
contemplates conducting exploration activities. The Company may be at a
competitive disadvantage in acquiring mining properties, as it must compete with
these individuals and companies, many of which have greater financial resources
and larger technical staffs than the Company. Accordingly, there can be no
assurance that the Company will be able to compete successfully for new mining
properties.

RISKS OF ACQUISITIONS

    The Company has recently begun to focus on evaluating opportunities to
acquire shares or assets of other mining businesses. Such acquisitions may be
significant in size, may change the scale of the Company's business, and may
expose the Company to new geographic, political, operating, financial or
geological risks. The Company's success in its acquisition activities depends on
its ability to identify suitable acquisition candidates, acquire them on
acceptable terms and integrate their operations successfully with those of the
Company. Any acquisitions would be accompanied by risks, such as the difficulty
of assimilating the operations and personnel of any acquired businesses; the
potential disruption of the Company's ongoing business; the inability of
management to maximize the financial and strategic position of the Company
through the successful integration of acquired assets and businesses; the
maintenance of uniform standards, controls, procedures and policies; the
impairment of relationships with employees, customers and contractors as a
result of any integration of new management personnel; and the potential unknown
liabilities associated with acquired assets and businesses. In addition, the
Company may need additional capital to finance an acquisition. Debt financing
related to any acquisition may expose the Company to increased risk of leverage,
while equity financing may cause existing shareholders to suffer dilution. The
Company is not currently permitted under the terms of its revolving credit
facility to raise additional debt financing without the consent of a majority of
the lenders. There can be no assurance that the Company would be successful in
overcoming these risks or any other problems encountered in connection with such
acquisitions.

UNCERTAINTY OF MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES

    The figures for proven and probable mineral reserves and mineral resource
presented herein are estimates, and no assurance can be given that the
anticipated tonnages and grades will be achieved or that the indicated level of
recovery of gold will be realized. The ore grade actually recovered by the
Company may differ from the estimated grades of the mineral reserves and mineral
resource. Such figures have been determined based on assumed gold prices and
operating costs. The Company has estimated proven and probable mineral reserves
based on a $300 per ounce gold price. While gold prices have generally been
above $300 per ounce to date in 2002, for the previous four years the market
price of gold has been, on average, below $300 per ounce. Prolonged declines in
the market price of gold may render mineral reserves containing relatively lower
grades of gold mineralization uneconomic to exploit and could reduce materially
the Company's reserves. Should such reductions occur, the Company could be
required to take a material write-down of its investment in mining properties or
delay or discontinue production or the development of new projects, resulting in
increased net losses and reduced cash flow. If a gold price of $275 per ounce
were assumed, the mineral reserve and mineral resource position would decline by
less than 2%. Market price fluctuations of gold, as well as increased production
costs or reduced recovery rates, may render mineral reserves containing
relatively lower grades of mineralization uneconomical to recover and may
ultimately result in a restatement of mineral resources. Short-term factors
relating to the mineral reserve, such as the need for orderly development of ore
bodies or the processing of new or different grades may impair the profitability
of a mine in any particular accounting period.

    Mineral resource estimates for properties that have not commenced production
are based, in most instances, on very limited and widely spaced drill hole
information, which is not necessarily indicative of conditions between and
around the drill holes. Accordingly, such mineral resource estimates may require
revision as more drilling information becomes available or as actual production
experience is gained.

                                       6
<Page>
MINING RISKS AND INSURANCE

    The business of gold mining is generally subject to certain types of risks
and hazards, including environmental hazards, industrial accidents, unusual or
unexpected rock formations, changes in the regulatory environment, cave-ins and
flooding and gold bullion losses. Such occurrences could result in damage to, or
destruction of, mineral properties or production facilities, personal injury or
death, environmental damage, delays in mining, monetary losses and possible
legal liability. The Company carries insurance to protect itself against certain
risks of mining and processing in amounts that it considers to be adequate but
which may not provide adequate coverage in certain unforeseen circumstances. The
Company may also become subject to liability for pollution, cave-ins or other
hazards against which it cannot insure or against which it may elect not to
insure because of high premium costs or other reasons or the Company may become
subject to liabilities which exceed policy limits. In such case, the Company may
be required to incur significant costs that could have a material adverse effect
on its financial performance and results of operations.

LAWS AND REGULATIONS

    The Company's mining operations and exploration activities are subject to
extensive Canadian federal and provincial, United States federal and state and
local laws and regulations governing prospecting, development, production,
exports, taxes, labour standards, occupational health and safety, water
disposal, toxic substances, environmental protection, mine safety and other
matters. Compliance with such laws and regulations increases the costs of
planning, designing, drilling, developing, constructing, operating and closing
mines and other facilities. Amendments to current laws and regulations governing
operations and activities of mining companies or more stringent implementation
or interpretation thereof could have a material adverse impact on the Company,
cause a reduction in levels of production and delay or prevent the development
of new mining properties.

    In July 2002, the Company paid a C$5,046 fine in respect of a notice of
infraction issued by the Quebec Ministry of the Environment under the LOI SUR LA
QUALITE DE L'ENVIRONNEMENT with respect to a toxic effluent at the LaRonde
Division. The Company has taken measures to prevent the discharge of toxic
effluent, including the installation of on-site water treatment systems, the
last of which is expected to be completed in 2003. In the meantime, the Company
is storing the effluent on site for future treatment. Although the costs of
treatment have not yet been finally determined, the Company believes that such
costs will not have a material effect on the Company's results of operations.

    Under mine closure plans originally submitted to the Minister of Natural
Resources in Quebec in 1996, the estimated current reclamation costs for the
LaRonde Division and Joutel are approximately $15 million and $0.5 million,
respectively. These reclamation plans are subject to approval by the Minister of
Natural Resources and there can be no assurance that the Minister of Natural
Resources will not impose additional reclamation obligations with attendant
higher costs. In addition, the Minister of Natural Resources may require that
the Company provide financial assurances to support such plans. At December 31,
2001, the Company had a total reclamation provision of $2.1 million, with
$0.9 million allocated for the LaRonde Division and $1.0 million allocated for
Joutel. Based on the current estimated reclamation costs for the LaRonde
Division, the Company records its annual reclamation provision for the LaRonde
Division at approximately $5 per ounce of gold produced.

CURRENCY FLUCTUATIONS

    The Company's operating results and cash flow are significantly affected by
changes in the US dollar/Canadian dollar exchange rate. Exchange rate movements
can have a significant impact as all of the Company's revenues are earned in
US dollars but most of its operating and capital costs are in Canadian dollars.
The US dollar/Canadian dollar exchange rate has varied significantly over the
last several years. During the period from January 1, 1997 to September 30,
2002, the Noon Buying Rate fluctuated from a high of C$1.6128 to a low of
C$1.3357. Historical fluctuations in the US dollar/Canadian dollar exchange rate
are not necessarily indicative of future exchange rate fluctuations. Based on
the Company's anticipated 2002 after-tax operating results, a 10% change in the
average annual US dollar/Canadian dollar exchange rate would affect net income
and operating cash flow by approximately $0.06 per share and $0.10 per share,
respectively. To hedge its foreign

                                       7
<Page>
exchange risk and minimize the impact of exchange rate movements on operating
results and cash flow, the Company has periodically used foreign currency
options and forward foreign exchange contracts to purchase Canadian dollars.
However, there can be no assurance that the Company's foreign exchange hedging
strategies will be successful or that foreign exchange fluctuations will not
materially adversely affect the Company's financial performance and results of
operations.

INTEREST RATE FLUCTUATIONS

    Fluctuations in interest rates can affect the Company's results of
operations and cash flows. The Company's convertible debentures due 2012 are at
a fixed rate of interest; however both its bank debt and cash balances are
subject to variable interest rates.

COMMON SHARE AND WARRANT PRICE VOLATILITY

    The trading price of the Common Shares has been and may continue to be
subject to large fluctuations and, therefore, the trading price of the Warrants
may also fluctuate significantly, which may result in losses to investors. The
trading price of the Common Shares and Warrants may increase or decrease in
response to a number of events and factors, including:

    - current events affecting the economic situation in Canada and the United
      States;

    - trends in the mining industry and the markets in which the Company
      operates;

    - changes in the market price of the commodities the Company sells;

    - changes in financial estimates and recommendations by securities analysts;

    - acquisitions and financings;

    - quarterly variations in operating results;

    - the operating and share price performance of other companies that
      investors may deem comparable; and

    - purchases or sales of blocks of the Common Shares or Warrants.

    Part of this volatility, however, is attributable to the current state of
the stock market, in which wide price swings are common. This volatility may
adversely affect the prices of the Common Shares and the Warrants regardless of
the Company's operating performance.

NO PUBLIC MARKET FOR THE WARRANTS


    Prior to this Offering, there was no public market for the Warrants. The TSX
has conditionally approved the listing of the Warrants and Nasdaq has
conditionally approved the Company's application to include the Warrants for
quotation. Listing on the TSX and quotation on Nasdaq, however, is subject to
the Company fulfilling all of the requirements of the TSX and Nasdaq,
respectively, including, with respect to both exchanges, distribution of the
Warrants to a minimum number of public holders. Moreover, there cannot be any
assurance as to the liquidity of the public market for the Warrants or that an
active public market for the Warrants will develop. If an active public market
does not develop, the market price and liquidity of the Warrants may be
adversely affected.


                                       8
<Page>
                           FORWARD-LOOKING STATEMENTS

    Certain statements contained in this prospectus and in certain documents
incorporated by reference in this prospectus constitute "forward-looking
statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995. When used in such documents, the words
"anticipate", "believe", "estimate", and "expect" and similar expressions, as
they relate to the Company or the Company's management, are intended to identify
forward-looking statements. Such statements reflect the Company's current views
with respect to future events and are subject to certain risks, uncertainties
and assumptions. Many factors could cause the actual results, performance or
achievements of the Company to be materially different from any future results,
performances, or achievements that may be expressed or implied by such
forward-looking statements, including, among others, those which are discussed
under the heading "Risk Factors" in this prospectus. Should one or more of these
risks or uncertainties materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated or expected. The
Company does not intend, and does not assume any obligation, to update these
forward-looking statements.

                                  THE COMPANY

HISTORY AND DEVELOPMENT OF THE COMPANY

    The Company is an established Canadian gold producer with mining operations
located in northwestern Quebec and exploration and development activities in
Canada and the southwestern United States (principally Nevada). The Company's
operating history includes almost three decades of continuous gold production,
primarily from underground operations. Since its formation in 1972, the Company
has produced approximately three million ounces of gold. In 2001, the Company
produced 234,860 ounces of gold at an average cash cost of $155 per ounce, net
of revenues received from the sale of zinc, silver and copper by-products. The
Company believes that it is one of the low cash cost producers in the North
American gold mining industry. The Company has traditionally sold all of its
gold production at the spot price due to its general policy not to sell forward
its future gold production. However, the Company has purchased put options that
will allow it to set a floor price of $260 per ounce on approximately 45% of its
gold production over the period from 2004 to 2007 inclusive.

    The Company's principal operating divisions are the LaRonde Division and the
Exploration Division. The LaRonde Division consists of the LaRonde Mine,
including the El Coco Property, which is 100% owned and operated by the Company.
The El Coco Property was acquired from Barrick Gold Corporation in 1999 and is
subject to a 50% net profits interest on production from current mineral
reserves on this property, which are expected to be depleted by the end of 2003.
The LaRonde Mine, with its single operating production shaft (the "Penna
Shaft"), currently accounts for all of the Company's gold production. Since the
commissioning of the mill in 1988, the LaRonde Division has produced over
1.9 million ounces of gold. The Penna Shaft at the LaRonde Mine extends to a
depth of 7,380 feet, which the Company believes makes it the deepest single-lift
shaft in the Western Hemisphere. Production was expanded at the LaRonde Mine to
5,000 tons of ore treated per day in October 2000 and to 7,000 tons of ore
treated per day in October 2002. Operating at 7,000 tons per day, the Company
contemplates an increase in gold production from 234,860 ounces of gold in 2001,
to approximately 285,000 ounces in 2002, 370,000 ounces in 2003 and 400,000
ounces in 2004.

    An extensive surface and underground exploratory drilling program to
delineate additional reserves at the LaRonde Mine has been underway since 1990.
The program successfully outlined several ore zones and a large mineral resource
to the east of the site of what was, at the time, the main production shaft. As
of December 31, 2001, the LaRonde Division had established proven and probable
mineral reserves of approximately 3.3 million ounces of contained gold with a
total mineral reserve and mineral resource base of 8.5 million ounces of gold.

    The Company's current strategy is to pursue opportunities for growth in gold
production and gold reserves through the acquisition of advanced exploration
properties, development properties, producing properties or other mining
businesses and through continued exploration, development and expansion of the
LaRonde Mine. Aggregate expenditures on the development and expansion of the
LaRonde Mine incurred in the last four fiscal years were $215 million, of which
$36.3 million was spent in 2001. Expenditures for the nine months ending
September 30, 2002 on this property were $45.1 million and planned expenditures
for the remaining three months of the year are estimated to be $9.8 million.
These expenditures will be financed out of funds from the

                                       9
<Page>
Company's $125 million revolving bank credit facility and operating cash flows.
Depending on the success of the exploration programs at this and other
properties, the Company may be required to make additional capital expenditures
for exploration, development and preproduction. In addition, the Company
continuously evaluates opportunities to make acquisitions, although it currently
has no contract, arrangement or understanding with respect to any material
acquisition.

    The Company, through its Exploration Division and its subsidiary company,
Sudbury Contact, focuses its exploration activities primarily on the
identification of new gold reserves and development opportunities in proven
producing regions in Canada and the southwestern United States. In addition,
Sudbury Contact engages in exploration for deposits of diamonds in northern
Ontario. The Company currently manages exploration on 71 properties in central
and eastern Canada.

    The Company's only significant subsidiary is Sudbury Contact, a public
company listed on the TSX. The Company has an approximate 67.4% interest in
Sudbury Contact. Sudbury Contact is a corporation incorporated under the laws of
the Province of Ontario.

    The Company's executive and registered office is located at Suite 500, 145
King Street East, Toronto, Ontario, Canada M5C 2Y7; telephone number
(416) 947-1212; website: http://www.agnico-eagle.com. The information contained
on the website is not part of this prospectus.

KEY OPERATING STRENGTHS

    The Company believes that it has a number of key operating strengths that
provide distinct competitive advantages.

    FOCUSED BUSINESS STRATEGY.  The Company and its predecessors have over three
decades of experience and expertise in metals mining, including nearly three
decades of continuous gold production. The Company's operations are located in
areas that are supportive of the mining industry in Canada and the southwestern
United States. These operations are concentrated in areas among North America's
principal gold-producing regions.

    LOW-COST, EFFICIENT PRODUCER.  The Company believes that it is one of the
low cash cost producers in the North American gold mining industry. The Company
has been able to improve this position through its dedication to cost-efficient
mining operations, the strength of its by-product revenue and the economies of
scale afforded by its large single shaft mine. In addition, the Company believes
its highly motivated work force contributes significantly to its low-cost
position and continued operational improvements.

    SOUND OPERATING BASE.  The Company's existing operations at the LaRonde
Division provide a sound economic base for additional reserve and production
development at the property. Since 1990, an extensive surface and underground
exploration program has identified several ore zones at depths ranging from 300
feet to approximately 10,000 feet below surface, at which point mineralization
remains open at depth and to the west. Production from these ore zones began in
1999 and the Penna Shaft was completed in March 2000. The Company successfully
expanded production at the LaRonde Mine to 5,000 tons of ore treated per day in
October 2000 and to 7,000 tons of ore treated per day in October 2002. See
"Recent Developments".

    STRONG MANAGEMENT TEAM.  The Company's senior management team has an average
of 20 years of operating and exploration experience in the mining industry.
Management's significant experience has been instrumental in the Company's
historical growth and provides a solid base on which to expand the Company's
operations. The geological knowledge that management has gained through its
years of experience in mining and developing the LaRonde Division is expected to
benefit the Company's current expansion program in the region.

GROWTH STRATEGY

    OPTIMIZE AND FURTHER EXPAND OPERATIONS.  The Company's strategy is to
increase annual gold production and gold reserves through the continued
exploration, development and expansion of the LaRonde Mine. The expansion of
production at the LaRonde Mine from 5,000 to 7,000 tons of ore treated per day
was completed in October 2002. Under the 7,000 tons-per-day mine plan, the
Company's objective is to increase gold production

                                       10
<Page>
at the LaRonde Division to approximately 400,000 ounces per year by 2004 and to
continue to lower its costs to produce an ounce of gold. Capital expenditures at
the LaRonde Division in 2001 were $36.3 million and are expected to be
approximately $55 million in 2002 and $17 million in 2003 to complete
development of the ore zones accessible from the Penna Shaft required to sustain
production at the rate of 7,000 tons of ore treated per day and to construct a
crushing plant and a load out plant at lower levels, scheduled to be completed
by July 2003.

    GROWTH THROUGH ACQUISITIONS.  The Company has traditionally sought to
achieve growth by acquiring advanced exploration properties, development
properties and producing properties and by investing in early-stage exploration
companies. More recently, the Company has begun to focus on achieving growth
through the acquisition of shares or assets of other mining businesses. The
Company is currently examining several such acquisition opportunities.

    EXPAND GOLD RESERVES.  The Company is conducting an aggressive drilling
program at the LaRonde Division to further increase its mineral reserve base and
transfer mineral resources to the mineral reserve category. In the three years
ended December 31, 2001, the Company has transferred over 17 million tons of
mineral resources to proven and probable mineral reserves, net of production
replacements. In that same period, the Company's exploration activities have
added 2.0 million ounces to proven and probable gold reserves net of production
replacement of 0.4 million ounces of gold mined. As a result, the LaRonde
Division's current global proven and probable mineral reserve and mineral
resource base is estimated to contain 8.5 million ounces of gold, 3.2 billion
pounds of zinc, 106 million ounces of silver and 612 million pounds of copper of
which 3.3 million ounces of gold, 2.9 billion pounds of zinc, 83 million ounces
of silver and 260 million pounds of copper are proven and probable mineral
reserve. The new underground workings at the Penna Shaft will provide a base
from which the Company can conduct its aggressive drilling program of 550,000
feet over the period from 2002 to 2005, inclusive.

    EXPAND GEOGRAPHIC BASE.  The Company's assets are primarily located in the
provinces of Quebec and Ontario. The Company's strategy is to seek to expand the
geographic base of its properties through acquisition of additional properties
or mining businesses within and outside Canada. The Company continuously
considers such acquisition opportunities.

    LEVERAGE MINING EXPERTISE.  The Company believes it can benefit not only
from the existing infrastructure at its mines, but also from geological
knowledge that it has gained in mining and developing its properties. The
Company's strategy is to capitalize on its operating and mine development
expertise to exploit fully the potential of its properties. The Company's goal
is to apply the proven operating principles of the LaRonde Division to each of
its existing and future properties.

                              RECENT DEVELOPMENTS

RESULTS OF OPERATIONS FOR THE THIRD QUARTER AND OUTLOOK

    As disclosed in the Company's management's discussion and analysis of
financial conditions and the results of operations for the nine months ended
September 30, 2002, gold production and revenue for the nine month period were
lower than anticipated due to the impact of delays in development in Zone 20
North at depth caused by delays in ventilation installation. As a result of
these delays, mining activity was concentrated in the zinc-silver rich zones in
the upper part of Zone 20 North. This re-sequencing of production is expected to
push into future years gold production initially scheduled for 2002. Production
was also affected by an electrical failure of the semi-autogenous (SAG) mill
drive which resulted in 11 days of lost production in July 2002. The mill drive
has since been replaced. Cash costs per ounce of gold for the nine months ended
September 30, 2002 were also higher than anticipated due to lower than projected
gold production, a higher El Coco royalty resulting from increased gold price
and a weaker than budget zinc price, partially offset by a weaker than
anticipated Canadian dollar. In 2003, further cost improvements are anticipated
as ore grades increase and production improves at the LaRonde Mine when mining
is expected to begin on the higher grade zones and the first full year of
production at 7,000 tons of ore treated per day is realized. Gold production for
the full year 2002 is now expected to be approximately 285,000 ounces at a cash
cost of approximately $130 per ounce and a total cash cost, including royalties
payable in respect of production from the El Coco Property, of approximately
$165

                                       11
<Page>
per ounce. The Company's ability to meet these production and cost targets is
subject to the uncertainties associated with mining and processing operations,
as well as the effects of gold prices, by-product credits (for zinc, silver and
copper), treatment and refining charges and the US dollar/Canadian dollar
exchange rate.

    Capital expenditures for 2002 are estimated to be approximately
$55 million. These estimated capital expenditures for the year are approximately
$9 million in excess of the budget for the year. The increase was attributable
to a decline in labour productivity resulting from high underground temperatures
caused by the delays in ventilation installation.


SHELF PROSPECTUS



    On October 31, 2002, the Company filed a preliminary short form base shelf
prospectus with the securities regulatory authorities in each of the provinces
of Canada and a registration statement on Form F-10 with the United States
Securities and Exchange Commission (the "SEC"), each relating to the offering by
the Company from time to time during the next 25 months of up to $500 million of
debt securities, Common Shares or warrants to purchase debt securities or Common
Shares. This registration statement is not currently effective. It is a
condition of closing of this offering that a shelf registration statement be
declared effective by the SEC and that the Company have filed with the SEC a
prospectus supplement registering the offering of Common Shares issuable from
time to time on the exercise of the Warrants.


LARONDE MINE EXPANSION

    The expansion of the LaRonde Mine from 5,000 to 7,000 tons of ore per day
was completed in October 2002 and the construction of a crushing plant and a
load out plant at lower levels is scheduled to be completed by July 2003.
Underground, the first production stope on Level 194 was blasted during
June 2002. Extraction was delayed while an ore pass between Level 194 and 215
was completed which was slowed due to the delay in installing ventilation to
that depth.

    The expansion of the mill is now substantially complete. The mill was shut
down for five days in early October 2002 to complete commissioning. Further work
remains to be done during the fourth quarter to upgrade the refinery heating and
ventilation systems. The mill is expected to average 7,000 tons of ore treated
per day during the fourth quarter.

DEEP DEVELOPMENT PROJECT

    The Company has set up a team to study a deep development project at LaRonde
to access the Company's mineral resource base of 5.2 million ounces, located
outside of the Penna Shaft infrastructure. The initial phase is to study the
technical issues associated with deep mining, including ventilation and cooling
at depth, hoisting constraints and capacity at depth and excavation stability. A
detailed feasibility study has been initiated and the results of this study are
expected to be available in the first half of 2003.

PROPOSED ACCOUNTING CHANGE

    Effective January 1, 2003, the Company will adopt Statement of Financial
Accounting Standards No. 143 relating to asset retirement obligations. The
Company is currently evaluating the impact of adopting this standard. Although
the change may negatively affect earnings in the first quarter of 2003, on an
annual basis its impact is expected to be immaterial.

                                       12
<Page>
                                USE OF PROCEEDS


    The estimated net proceeds to the Company of this offering will be
approximately C$249.6 million ($159.2 million, based on the Noon Buying Rate on
October 30, 2002) (determined after deducting the underwriting commission and
the estimated expenses of this offering payable by the Company and assuming no
exercise of the underwriters over-allotment option). The net proceeds of this
offering will be used to fund future potential acquisitions, capital
expenditures and for other general corporate purposes. Pending such application,
the net proceeds of the offering will be temporarily added to cash and
short-term deposits and applied to temporarily reduce amounts outstanding under
the Company's revolving bank credit facility. Although the Company is examining
several acquisition opportunities, no contract, arrangement or understanding
currently exists regarding any material acquisition.


                                       13
<Page>
                                 CAPITALIZATION


    The following table sets forth the consolidated cash and short-term deposits
and capitalization of the Company as at September 30, 2002 both actual and as
adjusted to reflect the issuance of the Units offered hereby (based on the
US dollar offering price of $13.90 per Unit, net of estimated offering expenses
and assuming no exercise of the over-allotment option). This table should be
read in conjunction with the audited consolidated financial statements of the
Company for the period ended December 31, 2001 (the "Annual Financial
Statements"), the unaudited consolidated financial statements of the Company for
the nine months ended September 30, 2002 (the "Third Quarter Financial
Statements"), management's discussion and analysis of financial condition and
results of operation for the year ended December 31, 2001 and management's
discussion and analysis of financial condition and results of operations for the
nine months ended September 30, 2002 incorporated by reference into this
prospectus.



<Table>
<Caption>
                                                            CANADIAN GAAP                US GAAP
                                                          SEPTEMBER 30, 2002       SEPTEMBER 30, 2002
                                                        ----------------------   -----------------------
                                                         ACTUAL    AS ADJUSTED    ACTUAL     AS ADJUSTED
                                                        --------   -----------   ---------   -----------
                                                                   (unaudited, in thousands)
<S>                                                     <C>        <C>           <C>         <C>
Cash and short-term deposits(1).......................  $ 17,699     $146,934    $  17,699    $ 146,934
                                                        ========     ========    =========    =========
Long-term debt:
  Bank Credit Facility(1)(2)..........................  $ 30,000     $ --        $  30,000    $  --
  Convertible debentures due 2012(3)..................     --          --          143,750      143,750
                                                        --------     --------    ---------    ---------
  Total debt(3).......................................    30,000       --          173,750      143,750
                                                        --------     --------    ---------    ---------

Shareholders' equity:
  Common shares: authorized -- unlimited; issued and
    outstanding -- actual -- 69,722,269; as
    adjusted -- 81,722,269(4)(5)......................   263,871      416,991      423,639      569,194
  Warrants(6).........................................     --          13,680       --           13,680
  Convertible debentures due 2012(3)..................    90,590       90,590       --           --
  Other paid-in capital(3)............................    55,028       55,028       --           --
  Contributed surplus.................................     5,566        5,566        7,181        7,181
  Deficit(3)(5).......................................   (53,681)     (61,246)    (194,013)    (194,013)
  Accumulated other comprehensive loss................     --          --          (18,307)     (18,307)
                                                        --------     --------    ---------    ---------
  Total shareholders' equity..........................   361,374      520,609      218,500      377,735
                                                        --------     --------    ---------    ---------
Total capitalization..................................  $409,073     $667,543    $ 409,949    $ 668,419
                                                        ========     ========    =========    =========
</Table>


- ------------

Notes:

(1) The estimated net proceeds from the sale of Units will be used to fund
    future potential acquisitions, capital expenditures and for other general
    corporate purposes. Pending such application, the net proceeds of the
    offering will be temporarily added to cash and short-term deposits and
    applied to temporarily reduce amounts outstanding under the Company's
    revolving bank credit facility. See "Use of Proceeds".


(2) In 2001, the Company entered into a $125 million credit agreement with a
    group of financial institutions. See Note 4(b) to the Annual Financial
    Statements. As at November 5, 2002, the Company had drawn $30 million under
    such credit facility.


(3) On February 15, 2002 the Company issued $143.75 million aggregate principal
    amount of 4.50% convertible debentures due 2012 (the "Convertible
    Debentures") for net proceeds of approximately $138.5 million. Under
    Canadian GAAP, the fair value of the holder's conversion option of the
    Convertible Debentures is included in Other paid-in capital. The remaining
    portion of the Convertible Debentures is included in Shareholder's equity
    and distributions under the Convertible Debentures are charged to Deficit.
    Under US GAAP, the Convertible Debentures are classified as Long-term debt
    and distributions are included as Interest expense.


(4) Does not include 2,862,200 Common Shares issuable at September 30, 2002
    under stock options for directors, officers and employees of the Company and
    under options granted for services at September 30, 2002, 6,000,000 Common
    Shares issuable on the exercise of the Warrants or approximately 10,267,900
    Common Shares issuable on the conversion of the Convertible Debentures. See
    "Description of Share Capital -- Convertible Debentures".



(5) The Deficit under Canadian GAAP as at September 30, 2002 is increased by
    $7.565 million under the "As Adjusted" column which amount represents the
    estimated costs of issuing the Common Shares, including the underwriting
    commission. Under US GAAP the estimated costs of issuing the Common Shares
    are recorded as a reduction of proceeds received from the issuance of the
    Common Shares.



(6) The Corporation will issue 6,000,000 Warrants pursuant to this offering
    (6,900,000 if the over-allotment option is exercised in full).


                                       14
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                          DESCRIPTION OF SHARE CAPITAL

COMMON SHARES


    The authorized capital of the Company consists of an unlimited number of
common shares, of which 69,746,169 were issued and outstanding as of
November 5, 2002. All outstanding common shares of the Company are fully paid
and non-assessable. The holders of the common shares are entitled to one vote
per share at meetings of shareholders and to receive dividends if, as and when
declared by the directors of the Company. In the event of voluntary or
involuntary liquidation, dissolution or winding-up of the Company, after payment
of all outstanding debts, the remaining assets of the Company available for
distribution would be distributed rateably to the holders of the common shares.
Holders of the common shares of the Company have no pre-emptive, redemption,
exchange or conversion rights.


CONVERTIBLE DEBENTURES

    On February 15, 2002, the Company issued $143.75 million principal amount of
convertible debentures due February 15, 2012 (the "Convertible Debentures") for
net proceeds of approximately $138.5 million. The Convertible Debentures are
convertible into common shares of the Company at an initial conversion rate of
71.429 common shares per $1,000 principal amount of Convertible Debentures,
subject to adjustment in certain circumstances, and bear interest at the rate of
4.50% per annum. The Convertible Debentures are redeemable by the Company, in
whole or in part, at any time on or after February 15, 2006. Based on the
initial conversion rate, if all of the holders of the Convertible Debentures
exercise their respective conversion rights, the Company would be required to
issue approximately 10,267,900 common shares.

SHAREHOLDER RIGHTS PLAN

    On April 22, 1999, the Board of Directors of the Company adopted a
shareholder rights plan (the "Plan") to replace the original shareholder rights
plan dated May 10, 1989, to take effect at the close of business on May 10, 1999
(the "Record Date"), subject to shareholder approval, confirmation and
ratification, which was received on June 25, 1999. The rights issued under the
Plan will expire (the "Expiration Time") at the close of the Company's annual
meeting in 2009, unless earlier redeemed or exchanged by the Company and subject
to shareholder re-ratification of the Plan by the shareholders at the Company's
annual meeting to be held in 2005.

    Pursuant to the Plan, the Board declared a distribution of one right (a
"Right") for each outstanding common share of the Company to shareholders of
record at the close of business on the Record Date and authorized the issuance
of one Right for each common share (including the Common Shares offered hereby)
issued after the Record Date and prior to the Separation Time (described below)
and the Expiration Time. The Rights will separate from the common shares at the
time (the "Separation Time") which is the close of business on the eighth
trading day (or such later day as determined by the Board of Directors) after
the earlier of the first public announcement of the acquisition of, or intention
to acquire, beneficial ownership of 20% of the common shares of the Company by
any person other than in accordance with the terms of the Plan, or when a
Permitted Bid (described below) or competing Permitted Bid ceases to qualify as
such.

    In order to constitute a "Permitted Bid", an offer must be made in
compliance with the Plan and must be made to all shareholders (other than the
offeror), must be open for at least 75 days and be accepted by shareholders
holding more than 50% of the outstanding voting shares and, if so accepted, must
be extended for a further 10 business day period.

                                DIVIDEND POLICY

    The Company continued its policy of annual dividends with the declaration of
a $0.02 per share dividend in 2001, unchanged from 2000 and 1999 levels. This
represents 22 years of uninterrupted cash dividend payments by the Company.
Although the Company expects to continue paying an annual cash dividend, future
dividends will be at the discretion of the Company's Board of Directors and will
be subject to such factors as the Company's earnings, financial condition and
capital requirements. The Company's bank credit facility contains covenants
which restrict the Company's ability to pay or declare dividends.

                                       15
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                   CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

    The following is a summary of the principal tax considerations under the
INCOME TAX ACT (Canada) (the "Canadian Tax Act") generally applicable to a
purchaser of Units comprised of Common Shares and Warrants acquired pursuant to
this prospectus.

    This summary is based on the current provisions of the Canadian Tax Act and
its regulations, all specific proposals to amend the Canadian Tax Act and the
regulations publicly announced by or on behalf of the Minister of Finance
(Canada) before the date of this prospectus (the "Tax Proposals"), and on the
published administrative practices of the Canada Customs and Revenue Agency
("CCRA"). This summary does not address all of the tax considerations that may
be relevant to any particular holder and, except for the Tax Proposals, does not
take into account or anticipate any changes in law, whether by legislative,
governmental or judicial decision or action, or any changes in the
administrative practices of the CCRA. This summary does not take into account
tax legislation of any province, territory or foreign jurisdiction. Provisions
of provincial or territorial income tax legislation vary among provinces and
territories in Canada and may differ from federal income tax legislation.

    THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE LEGAL OR
TAX ADVICE TO ANY PARTICULAR PURCHASER OF UNITS. ACCORDINGLY, PROSPECTIVE
PURCHASERS OF UNITS SHOULD CONSULT THEIR OWN TAX ADVISORS ABOUT THE SPECIFIC TAX
CONSEQUENCES TO SUCH HOLDERS OF PURCHASING, HOLDING OR DISPOSING OF COMMON
SHARES AND WARRANTS.


    Purchasers of Units and the Company must allocate the purchase price of each
Unit on a reasonable basis between the Common Shares and the one-half of a
Warrant to determine the cost of each for the purposes of the Canadian Tax Act.
For its purposes, the Company intends to allocate C$20.00 to each Common Share
and C$1.79 to each one-half of a Warrant. Although the Company believes this
allocation to be reasonable, it will not be binding on the CCRA.


    All amounts relevant in computing a holder's liability under the Canadian
Tax Act must be computed in Canadian dollars.

RESIDENTS OF CANADA

    The following is a summary of the principal considerations under the
Canadian Tax Act generally applicable to a purchaser of Units comprised of
Common Shares and Warrants acquired pursuant to this prospectus who:

    - is a resident of Canada for purposes of the Canadian Tax Act and any
      applicable tax treaty or convention;

    - holds Common Shares and Warrants as capital property; and

    - deals at arm's length and is not affiliated with the Company or a
      subsequent purchaser of such Common Shares and Warrants.

For purposes of this discussion, such a person is referred to as a "Canadian
Holder". Canadian Holders whose Common Shares do not otherwise qualify as
capital property may in certain circumstances make an irrevocable election under
subsection 39(4) of the Canadian Tax Act to have their Common Shares and every
"Canadian security" (as defined in the Canadian Tax Act) owned by such Canadian
Holder in the taxation year of the election and in all subsequent taxation years
deemed to be capital property.

    The Canadian Tax Act contains provisions relating to securities held by
certain financial institutions, commonly referred to as the mark-to-market
rules. This summary does not take into account these mark-to-market rules.
Canadian Holders that are financial institutions for purposes of these rules
should consult their own tax advisors.

    EXERCISE OF WARRANTS


    No gain or loss will be realized by a Canadian Holder on the exercise of a
Warrant (except if cash is received in lieu of the issuance of fractional Common
Shares).


    The cost to the Canadian Holder of each Common Share acquired on the
exercise of a Warrant will be the aggregate of the Canadian Holder's adjusted
cost base of the Warrant immediately before the exercise thereof

                                       16
<Page>
and the amount paid to acquire the Common Share on the exercise of the Warrant.
The cost to the Canadian Holder of each Common Share acquired on the exercise of
a Warrant must then be averaged with the adjusted cost base of all other Common
Shares then held by the Canadian Holder as capital property for purposes of
subsequently computing the adjusted cost base of each Common Share of the
Canadian Holder.

    DISPOSITION OF WARRANTS

    A Canadian Holder who disposes of or is deemed to dispose of a Warrant,
including on redemption or expiry of a Warrant (but otherwise than by exercise
of the Warrant), generally will realize a capital gain (or a capital loss) equal
to the amount by which the proceeds of disposition, net of any reasonable costs
of disposition, exceed (or are less than) the adjusted cost base of the Warrant
to the Canadian Holder. A Canadian Holder whose unexercised Warrant expires
generally will realize a capital loss equal to the adjusted cost base to the
Canadian Holder of the Warrant at the time of expiry.

    DIVIDENDS ON COMMON SHARES

    Dividends received or deemed to be received by a Canadian Holder on Common
Shares will be included in computing the Canadian Holder's income for purposes
of the Canadian Tax Act. The gross-up and dividend tax credit rules normally
applicable to taxable dividends paid by taxable Canadian corporations will apply
to dividends received by an individual. Such dividends received by a corporation
will normally be deductible in computing its taxable income.

    A corporation which is a private corporation or a subject corporation for
purposes of the Canadian Tax Act may be liable to pay a refundable tax of
33 1/3% on dividends received or deemed to be received to the extent that such
dividends are deductible in computing the corporation's income. Canadian Holders
to whom these rules may be relevant should consult their own tax advisors.

    DISPOSITION OF COMMON SHARES

    On a disposition or a deemed disposition (other than to the Company) of a
Common Share, a Canadian Holder generally will realize a capital gain (or a
capital loss) equal to the amount by which the proceeds of disposition of the
Common Share, net of any reasonable costs of disposition, exceed (or are less
than) the adjusted cost base of the Common Share to the Canadian Holder. The
cost to a Canadian Holder of a Common Share acquired pursuant to this prospectus
will be averaged with the adjusted cost base of any other of the Company's
common shares owned as capital property by the Canadian Holder for purposes of
determining the adjusted cost base of each such share to the Canadian Holder.

    TREATMENT OF CAPITAL GAINS AND CAPITAL LOSSES

    A Canadian Holder will be required to include one-half of the amount of any
capital gain (a "taxable capital gain") in income, and will be required to
deduct one-half of the amount of any capital loss (an "allowable capital loss")
against taxable capital gains realized by the Canadian Holder in the year of
disposition. Allowable capital losses not deducted in the taxation year in which
they are realized may be carried back and deducted in any of the three preceding
taxation years or carried forward and deducted in any subsequent taxation year
against taxable capital gains realized in such years, to the extent and under
the circumstances specified in the Canadian Tax Act. A capital gain realized by
a Canadian Holder who is an individual may give rise to alternative minimum tax.

    The amount of any capital loss realized on the disposition or deemed
disposition of a Common Share by a Canadian Holder that is a corporation may be
reduced by the amount of dividends received or deemed to have been received by
it on the Common Share to the extent and in the circumstances prescribed by the
Canadian Tax Act. Similar rules may apply where a Canadian Holder that is a
corporation is a member of a partnership or a beneficiary of a trust that owns
Common Shares and where a trust is a member of a partnership or a partnership or
trust is a beneficiary of a trust. Canadian Holders to whom these rules may be
relevant should consult their own tax advisors.

                                       17
<Page>
    If a Canadian Holder is a Canadian-controlled private corporation for
purposes of the Canadian Tax Act, the Canadian Holder may be liable to pay an
additional refundable tax of 6 2/3% on certain investment income, including
taxable capital gains.

NON-RESIDENTS OF CANADA

    The following is a summary of the principal considerations under the
Canadian Tax Act generally applicable to a purchaser of Units comprised of
Common Shares and Warrants acquired pursuant to this prospectus who:

    - is not a resident of Canada for purposes of the Canadian Tax Act and any
      applicable tax treaty or convention;

    - holds Common Shares and Warrants as capital property;

    - deals at arm's length and is not affiliated with the Company;

    - does not use or hold Common Shares or Warrants in carrying on a business
      in Canada; and

    - is not a non-resident insurer for purposes of the Canadian Tax Act.

    For purposes of this discussion such a person is referred to as a
"Non-Canadian Holder".

    EXERCISE OF WARRANTS


    No gain or loss will be realized by a Non-Canadian Holder on the exercise of
a Warrant (except if cash is received in lieu of the issuance of fractional
Common Shares).


    DIVIDENDS ON COMMON SHARES

    Dividends paid or credited or deemed to be paid or credited to a
Non-Canadian Holder on Common Shares will be subject to withholding tax under
the Canadian Tax Act at a rate of 25%, subject to reduction under the provisions
of an applicable income tax treaty or convention. Under the CANADA-UNITED STATES
INCOME TAX CONVENTION (1980), the applicable rate of dividend withholding tax is
generally reduced to 15%.

    DISPOSITION OF COMMON SHARES OR WARRANTS

    A Non-Canadian Holder of Common Shares or Warrants which are not taxable
Canadian property will not be subject to tax under the Canadian Tax Act on the
disposition of such Common Shares or Warrants. Generally, Common Shares and
Warrants will not be taxable Canadian property to a Non-Canadian Holder at a
particular time if:

    - the Common Shares are listed on a prescribed stock exchange, including the
      TSX and the NYSE, at that time; and

    - during the 60-month period immediately preceding the disposition of the
      Common Shares or Warrants, as the case may be, the Non-Canadian Holder,
      persons with whom the Non-Canadian Holder did not deal at arm's length, or
      the Non-Canadian Holder together with such persons, did not own or have an
      interest in or an option in respect of 25% or more of the Company's issued
      shares of any class or series. For the purpose of the foregoing
      determination, the CCRA will treat Warrants held by the Non-Canadian
      Holder and non-arm's length persons as having been exercised.

If Common Shares or Warrants are taxable Canadian property to a Non-Canadian
Holder, a capital gain realized on a disposition thereof by the Non-Canadian
Holder will be subject to tax under the Canadian Tax Act in the manner described
above under the heading "-- Residents of Canada -- Treatment of Capital Gains
and Capital Losses", unless the capital gain is exempt from tax under the
Canadian Tax Act pursuant to the provisions of an applicable income tax treaty
or convention. Non-Canadian Holders whose Common Shares or Warrants are taxable
Canadian property should consult their own tax advisors.

                                       18
<Page>
                UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

    The following is a summary of the material U.S. federal income tax
considerations to a U.S. Holder (as defined below) regarding the acquisition,
ownership and disposition of Common Shares, Warrants and any Common Shares
received in connection with the exercise of the Warrants. This summary applies
only to U.S. Holders who acquire Common Shares or Warrants in the initial
offering, hold such Common Shares (including Common Shares received in
connection with the exercise of the Warrants) or Warrants as capital assets
(that is, for investment purposes) and are eligible for benefits under the
income tax convention between the U.S. and Canada signed on September 26, 1980,
as amended, currently in force, which is referred to in this prospectus as the
"Treaty". This summary is based upon current U.S. federal income tax law and the
Treaty, as in effect on the date of this prospectus. Changes in the laws may
alter the tax treatment of Common Shares and Warrants, possibly with retroactive
effect.

    This summary is general in nature and does not address the effects of any
state, local, foreign or other tax laws. In addition, it does not address all
tax considerations that may be relevant to a U.S. Holder in light of the
U.S. Holder's particular circumstances, nor does it apply to U.S. Holders having
a special status, such as:

    - a person that owns, or is treated as owning, 10% or more of the Company's
      voting shares;

    - a dealer in securities or currencies;

    - a trader in securities that elects to use a mark-to-market method of
      accounting for securities holdings;

    - a bank, mutual fund, life insurance company or other financial
      institution;

    - a tax-exempt organization;

    - a person that holds Common Shares or Warrants as part of a straddle,
      hedge, constructive sale or other integrated transaction for tax purposes;

    - an S corporation or small business investment company;

    - a person whose functional currency for tax purposes is not the
      U.S. dollar; or

    - a person liable for alternative minimum tax.

    U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX
CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF COMMON SHARES AND
WARRANTS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.

    For purposes of this discussion, a "U.S. Holder" means a beneficial owner of
a Common Share or Warrant that is, for U.S. federal income tax purposes:

    - an individual citizen or resident of the United States;

    - a corporation, or other entity treated as a corporation for U.S. federal
      income tax purposes, created or organized in or under the laws of the U.S.
      or any political subdivision thereof;

    - an estate the income of which is subject to U.S. federal income taxation
      regardless of its source; or

    - a trust (a) the administration over which a U.S. court can exercise
      primary supervision and (b) all of the substantial decisions of which one
      or more U.S. persons have the authority to control.

    If a partnership holds Common Shares or Warrants, the tax treatment of a
partner will generally depend on the status of the partner and on the activities
of the partnership. Partners of partnerships holding Common Shares or Warrants
should consult their tax advisors.

ALLOCATION OF PURCHASE PRICE BETWEEN THE COMMON SHARES AND THE WARRANTS


    For U.S. federal income tax purposes, an acquisition of a Unit will be
treated as an acquisition of two components -- a Common Share and a Warrant to
purchase Common Shares. The purchase price for each Unit will be allocated
between those components in proportion to their respective fair market values at
the time of purchase, and such allocation will establish a U.S. Holder's initial
tax basis in the Common Share and the Warrant that comprise each Unit. The
Company will report the fair market value of each Common Share as $12.76 and
each one-half of a Warrant as $1.14. The Internal Revenue Service ("IRS"),
however, is not bound by this allocation and, therefore, there can be no
assurance that the IRS or a court will respect such allocation.


                                       19
<Page>
DISTRIBUTIONS

    Any dividends on Common Shares are expected to be declared and paid in
US dollars. Subject to the discussion found under "-- Passive Foreign Investment
Company" below, the gross amount of any distribution (other than in liquidation)
generally will be treated as a foreign source dividend taxable as ordinary
income to the extent paid out of the Company's current or accumulated earnings
and profits, as determined for U.S. federal income tax purposes, and generally
will be "passive income" for U.S. foreign tax credit purposes. A distribution on
the Common Shares made by the Company in excess of the Company's current or
accumulated earnings and profits will be treated as a tax-free return of capital
to the extent of a U.S. Holder's adjusted tax basis in such Common Shares and,
to the extent in excess of adjusted basis, as capital gain. See "-- Sale or
Other Disposition of Shares". Because the Company is not a U.S. corporation, no
dividends-received deduction will be allowed with respect to dividends paid by
the Company.

    As described above under "Canadian Federal Income Tax
Considerations -- Non-Residents of Canada -- Dividends on Common Shares", under
the Treaty, Canada currently imposes withholding tax on distributions at a rate
of 15%. U.S. Holders generally will have the option of claiming the amount of
any Canadian income taxes withheld either as a deduction from gross income or as
a dollar-for-dollar credit against their U.S. federal income tax liability,
subject to numerous complex limitations and restrictions which must be
determined and applied on an individual basis by each shareholder. Accordingly,
U.S. Holders should consult their own tax advisors concerning these rules in
light of their particular circumstances.

SALE OR OTHER DISPOSITION OF COMMON SHARES

    Subject to the discussion found under "Passive Foreign Investment Company"
below, in general, if a U.S. Holder sells or otherwise disposes of Common Shares
in a taxable disposition:

    - such U.S. Holder will recognize gain or loss equal to the difference (if
      any) between:

       - the U.S. dollar value of the amount realized on such sale or other
         taxable disposition; and

       - such U.S. Holder's adjusted tax basis in such Common Shares;

    - any gain or loss will be capital gain or loss and will be long-term
      capital gain or loss if such U.S. Holder's holding period for the Common
      Shares is more than one year at the time of such sale or other taxable
      disposition;

    - any gain or loss will generally be treated as U.S. source income for
      U.S. foreign tax credit purposes;

    - additional preferential tax treatment may be available if such
      U.S. Holder disposes of Common Shares held for more than five years; and

    - such U.S. Holder's ability to deduct capital losses (if any) is subject to
      limitations.

    If a U.S. Holder is a cash basis taxpayer who receives foreign currency,
such as Canadian dollars, in connection with a sale or other taxable disposition
of Common Shares, the amount realized will be based on the U.S. dollar value of
the foreign currency received with respect to such Common Shares, as determined
on the settlement date of such sale or other taxable disposition.

    If a U.S. Holder is an accrual basis taxpayer, such U.S. Holder may elect
the same treatment required of cash basis taxpayers with respect to a sale or
other taxable disposition of Common Shares, provided the election is applied
consistently from year to year. The election may not be changed without the
consent of the IRS. If a U.S. Holder is an accrual basis taxpayer and does not
elect to be treated as a cash basis taxpayer (pursuant to the U.S. Treasury
Regulations applicable to foreign currency transactions) for this purpose, such
U.S. Holder might have a foreign currency gain or loss for U.S. federal income
tax purposes because of differences between the U.S. dollar value of the foreign
currency received prevailing on the date of the sale or other taxable
disposition of Common Shares and the date of payment. Any such currency gain or
loss generally will be treated as U.S. source ordinary income or loss and would
be in addition to gain or loss, if any, that such U.S. Holder recognizes on the
sale or other taxable disposition of Common Shares.

PASSIVE FOREIGN INVESTMENT COMPANY

    U.S. Holders (who are not tax-exempt) would be subject to a special, adverse
tax regime (that would differ in certain respects from that described above) if
the Company is or were to become a passive foreign investment

                                       20
<Page>
company for U.S. federal income tax purposes. Although the determination of
whether a corporation is a passive foreign investment company is made annually,
and thus may be subject to change, the Company does not believe that it is, nor
does it expect to become, a passive foreign investment company. Notwithstanding
the foregoing, the Company urges U.S. Holders to consult their U.S. tax advisors
regarding the adverse U.S. federal income tax consequences of owning the stock
(or an option to acquire stock) of a passive foreign investment company and of
making certain elections designed to lessen those adverse consequences.

TAX TREATMENT OF THE WARRANTS

    EXERCISE OF WARRANTS

    No gain or loss will be recognized for U.S. federal income tax purposes by
U.S. Holders of the Warrants on the exercise thereof in exchange for Common
Shares (except if cash is received in lieu of the issuance of fractional Common
Shares). A U.S. Holder's tax basis in the Common Shares received on exercise of
Warrants will equal the sum of its tax basis in the Warrants (which in the case
of an initial U.S. Holder, will equal the portion of the purchase price of the
Unit allocated to the Warrant, as described above) plus the exercise price paid
on the exercise thereof. The holding period of the Common Shares received on the
exercise of the Warrants generally will not include the holding period of the
Warrants.

    SALE OR EXCHANGE


    Subject to the discussion found under "Passive Foreign Investment Company"
above and except as otherwise provided herein, the sale or exchange of a Warrant
(including an exchange made pursuant to a U.S. Holder's right to have the
Company redeem such Warrants) generally will result in the recognition of
capital gain or loss to the U.S. Holder in an amount equal to the difference
between the amount realized on such sale or exchange and the U.S. Holder's
adjusted tax basis in the Warrant. The adjusted tax basis in the Warrant
generally will equal the portion of the issue price for the Unit properly
allocable to the Warrant.


    EXPIRATION

    On the expiration of a Warrant, a U.S. Holder will recognize a loss equal to
its adjusted tax basis in the Warrant. The loss generally will be a capital loss
provided that the Common Shares issuable on exercise of the Warrants would have
been capital assets if acquired by the U.S. Holder of Common Shares.

    ADJUSTMENT

    Adjustments to the number of Common Shares issuable on exercise of the
Warrants or to the exercise price of the Warrants pursuant to the anti-dilution
provisions for the Warrants, as more fully described under "Details of the
Offering -- Warrants", may result in a taxable deemed distribution to the
holders of Warrants pursuant to Section 305 of the Internal Revenue Code of
1986, as amended, if such change has the effect of increasing the holder's
proportionate interest in the Company's earnings and profits or assets. In
general, anti-dilution adjustments are not treated as resulting in deemed
distributions. However, if, for example, the adjustment were considered an
adjustment to compensate for taxable cash or property distribution to other
shareholders, a taxable deemed distribution could result.

INFORMATION REPORTING AND BACKUP WITHHOLDING

    Dividends on Common Shares and payments of the proceeds from a sale or other
disposition of Common Shares or Warrants, paid within the U.S. or through
certain U.S.-related financial intermediaries, are subject to information
reporting and may be subject to backup withholding unless a holder:

    - is a corporation or other exempt recipient; or

    - provides a taxpayer identification number and certify that no loss of
      exemption from backup withholding has occurred.

    Amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against a holder's U.S. federal income tax liability,
provided the required information is furnished to the IRS.

                                       21
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                            DETAILS OF THE OFFERING


    The offering consists of 12,000,000 Units, each Unit consisting of one
Common Share and one-half of a Warrant. Each whole Warrant will entitle the
holder to purchase one Common Share. The Common Shares and the Warrants
comprising the Units will separate immediately on the closing of the offering.


COMMON SHARES

    For a description of the attributes of the Common Shares, see "Description
of Share Capital -- Common Shares".

WARRANTS

    The following statements are subject to the detailed provisions of the
Warrant Indenture referred to below.


    Each whole Warrant will entitle the holder to purchase one Common Share at a
price of US$19.00, subject to adjustment as summarized below. Warrants will be
exercisable at any time prior to 5:00 p.m. (Toronto time) on the date which is
five years from the date of the closing of this offering, after which the
Warrants will expire and be of no value. Under the Warrant Indenture, the
Company will be entitled to purchase in the market, by invitation to tender, by
private contract or otherwise, all or any of the Warrants then outstanding, and
any Warrants so purchased will be cancelled.


    The exercise price for the Warrants is payable in US dollars. However,
holders of Warrants may elect to pay the exercise price in Canadian dollars. In
such an event, the Warrant exercise price payable shall be the Canadian dollar
equivalent of the Warrant exercise price payable in US dollars as calculated
using the Noon Buying Rate, or if such exchange rate is not quoted or published,
such other exchange rate as may be reasonably determined by the Company, on the
business day immediately preceding the relevant exercise date, rounded to the
nearest tenth of a cent, and subject to confirmation by the Company within two
business days.

    The Warrants will be issued in registered form under, and be governed by, an
indenture to be dated as of the date of closing of this offering (the "Warrant
Indenture") between the Company and Computershare Trust Company of Canada, as
trustee (the "Trustee"). The principal office of the Trustee in Toronto and the
principal office of an affiliate of the Trustee in the Borough of Manhattan,
New York will be the locations at which Warrants may be surrendered for exercise
or transfer. No service charge will be made for registration of transfer or
exchange on surrender of any Warrant certificate. The Company may require
payment of a sum sufficient to cover any taxes or governmental or other charges
that may be imposed in connection with any registration or transfer or exchange
of Warrant certificates.

    The Warrant Indenture will provide for adjustment in the number of Common
Shares issuable on the exercise of the Warrants and/or the exercise price per
Common Share on the occurrence of certain events, including:

    (a) the declaration of a dividend or making of a distribution on the Common
       Shares payable in Common Shares or securities exchangeable for or
       convertible into Common Shares to all or substantially all the holders of
       the Common Shares;

    (b) the subdivision or change of the outstanding Common Shares into a
       greater number of Common Shares;

    (c) the reduction, combination or consolidation of the Common Shares into a
       lesser number of Common Shares;

    (d) the fixing of a record date for the issuance of rights, options or
       warrants to all or substantially all of the holders of the Common Shares
       under which such holders are entitled, during a period expiring not more
       than 45 days after such record date, to subscribe for or purchase Common
       Shares, or securities exchangeable for or convertible into Common Shares,
       at a price per share to the holder (or at a conversion or exchange price
       per share) of less than 95% of the Current Market Price per Common Share
       on such record date;

                                       22
<Page>
    (e) the fixing of a record date for the payment, issue or distribution to
       all or substantially all of the holders of the Common Shares of a
       dividend, cash or assets (including evidences of the Company's
       indebtedness) or rights, options, warrants or other securities (including
       securities convertible into or exchangeable for Common Shares) and such
       payment, issue or distribution does not constitute a Dividend Paid in
       Ordinary Course or an event listed in (a) to (d) above; and


    (f) the purchase of Common Shares pursuant to an issuer bid or a tender
       offer or exchange offer made by the Company or any subsidiary thereof at
       a price greater than the Current Market Price per Common Share at the
       time such tender or exchange offer expires.



    The term "Current Market Price per Common Share" will be defined in the
Warrant Indenture to mean, at any date, the US dollar average trading price per
Common Share (calculated in accordance with the Warrant Indenture) for the
20 consecutive trading days commencing on the trading day immediately before
such date on the NYSE or, if the Common Shares are not then listed on the NYSE
then on such other U.S. stock exchange or Nasdaq on which the Common Shares are
then listed or quoted as may be selected by the directors of the Company or, if
the Common Shares are not then listed or quoted on any U.S. stock exchange or
Nasdaq then on such other stock exchange on which the Common Shares are then
listed as may be selected by the directors of the Company or, if the Common
Shares are not then listed on a stock exchange, on the over-the-counter market;
provided that, if there is no market for the Common Shares during all or part of
the period during which the Current Market Price per Common Share thereof would
otherwise be determined, the Current Market Price per Common Share shall in
respect of all or such part of the period be determined by a
nationally-recognized firm of chartered accountants appointed by the Company
(who may be the Company's auditors), in each case appropriately adjusted to take
into account the occurence during such 20 trading day period of certain events
that would result in an adjustment of the Warrant exercise price.


    The term "Dividends Paid in Ordinary Course" will be defined in the Warrant
Indenture to mean dividends on the Common Shares payable in cash in any fiscal
year of the Company to the extent that such dividends in the aggregate do not
exceed the greater of (i) 110% of the aggregate amount of dividends paid by the
Company on its Common Shares in the 12 consecutive months ended immediately
prior to the first day of the fiscal year, (ii) 25% of the consolidated net
earnings of the Company under US GAAP before extraordinary items and after
dividends paid on any and all preferred shares of the Company for the most
recent year, and (iii) 10% of the shareholders' equity of the Company under
US GAAP.

    The Warrant Indenture will also provide for adjustment in the class and/or
number of securities issuable on the exercise of the Warrants and/or exercise
price per security in the event of the following additional events:
(i) reorganization, reclassification or other change of the Common Shares into
other securities; (ii) consolidation, amalgamation, arrangement or merger of the
Company with or into another entity (other than consolidations, amalgamations,
arrangements or mergers which do not result in any reclassification of the
Common Shares or a change of the Common Shares into other shares); or
(iii) sale, conveyance or transfer of the Company's undertakings or assets as an
entirety or substantially as an entirety to another corporation or other entity
in which the holders of Common Shares are entitled to receive shares, other
securities or property, including cash.

    No adjustment in the exercise price or the number of Common Shares
purchasable on the exercise of the Warrants will be required to be made unless
the cumulative effect of such adjustment or adjustments would change the
exercise price by at least one percent or the number of Common Shares
purchasable on exercise by at least one one-hundredth of a share, provided
however, that any such adjustment that is not made will be carried forward and
taken into account in any subsequent adjustment.

    The Company will also covenant in the Warrant Indenture that, during the
period in which the Warrants are exercisable, it will give notice to holders of
Warrants of any event that requires or may require an adjustment in any of the
exercise rights pursuant to any of the Warrants at least ten days prior to the
record date or effective date, as the case may be, of such event.

    No fractional Common Shares will be issuable on the exercise of any
Warrants. To the extent that the holder of a Warrant would otherwise be entitled
to purchase a fraction of a Common Share, the holder will receive a cash payment
in lieu thereof based on the then Current Market Price per Common Share. Holders
of Warrants

                                       23
<Page>
will not have any voting rights or any other rights which a holder of Common
Shares would have (including, without limitation, the right to receive notice of
or to attend meetings of shareholders or any right to receive dividends or other
distributions). Holders of Warrants will have no pre-emptive rights to acquire
securities of the Company.

    From time to time, the Company and the Trustee, without the consent of the
holders of Warrants, may amend or supplement the Warrant Indenture for certain
purposes, including curing defects or inconsistencies or making any change that,
in the opinion of the Trustee, does not prejudice the rights of the Trustee or
the holders of the Warrants. Any amendment or supplement to the Warrant
Indenture that so prejudices the interests of the holders of the Warrants may
only be made by "extraordinary resolution", which will be defined in the Warrant
Indenture as a resolution either (i) passed at a meeting of the holders of
Warrants at which there are holders of Warrants present in person or represented
by proxy representing at least 25% of the then outstanding Warrants (at least
50% for any amendment that would increase the exercise price per security,
decrease the number of securities issuable upon the exercise of Warrants or
shorten the term of the Warrants), or such lesser percentage constituting a
quorum for this purpose under the Warrant Indenture, and passed by the
affirmative vote of holders of Warrants representing not less than 66 2/3% of
the then outstanding Warrants represented at the meeting and voted on the poll
on such resolution; or (ii) adopted by an instrument in writing signed by the
holders of Warrants representing not less than 66 2/3% of the then outstanding
Warrants.


    The Company has filed a preliminary short form base shelf prospectus with
the securities regulatory authorities in each of the provinces of Canada and a
registration statement on Form F-10 (the "Registration Statement") with the SEC,
each relating to the offering by the Company from time to time during the next
25 months of up to $500 million of debt securities, Common Shares or warrants to
purchase debt securities or Common Shares. The Registration Statement is not
currently effective. It is a condition of the closing of this offering that a
shelf registration statement be declared effective by the SEC and that the
Company have filed with the SEC a prospectus supplement registering the offering
of Common Shares issuable from time to time on the exercise of the Warrants. The
Company has agreed to use its reasonable efforts to maintain the Registration
Statement or another registration statement relating to these Common Shares
effective until the earlier of the expiration date of the Warrants and the date
on which no Warrants remain outstanding. The Company will covenant in the
Warrant Indenture to use its best efforts to maintain the listing of the
Warrants on the TSX, reasonable efforts to effect and maintain the quotation of
the Warrants on Nasdaq and reasonable efforts to maintain the listing of the
Common Shares issuable on the exercise of the Warrants on the TSX and the NYSE.
No U.S. person or person holding Warrants for the account of a U.S. person will
be permitted to exercise Warrants during any period prior to the expiration time
of the Warrants when no such registration statement is effective. In lieu of the
exercise right, during any such period U.S. persons will have the right to
require the Company to redeem Warrants held by them for a redemption price equal
to the difference between the Current Market Price per Common Share and the
exercise price, multiplied by the number of Common Shares otherwise issuable on
the exercise of the Warrants. If no such registration statement is effective,
the Company will notify the holders of Warrants in the United States in
accordance with the provisions of the Warrant Indenture. In such event, the
Warrants would cease to be quoted on Nasdaq but would continue to be listed and
traded on the TSX.


                                       24
<Page>
                              PLAN OF DISTRIBUTION


    Pursuant to an agreement dated October 31, 2002 (the "Underwriting
Agreement") between the Company and each of the Underwriters named below, the
Company has agreed to sell and the Underwriters severally have agreed to
purchase from the Company, the number of Units listed opposite their names
below:



<Table>
<Caption>
                                                                    NUMBER
                                                                   OF UNITS
    UNDERWRITER                                                    --------
    <S>                                                           <C>
    Merrill Lynch Canada Inc....................................   3,300,000
    TD Securities Inc...........................................   3,300,000
    Scotia Capital Inc..........................................   1,500,000
    Yorkton Securities Inc......................................   1,500,000
    CIBC World Markets Inc......................................     720,000
    Salomon Smith Barney Canada Inc.............................     720,000
    Dundee Securities Corporation...............................     480,000
    Sprott Securities Inc.......................................     480,000
                                                                  ----------
          Total.................................................  12,000,000
                                                                  ==========
</Table>



    The offering price of the Units was determined by negotiation between the
Company and the Underwriters. The public offering price for Units offered in the
United States is payable in US dollars, and the public offering price for Units
offered in Canada is payable in Canadian dollars. The US dollar amount is the
equivalent of the Canadian price of the Units being offered hereby based on the
Noon Buying Rate on October 30, 2002. The expenses of the offering, not
including the underwriting commission, are estimated to be C$1.4 million
($0.9 million, based on the Noon Buying Rate on October 30, 2002) and are
payable by the Company. In consideration of their services in connection with
the offering, the Company has agreed to pay the Underwriters a commission of 4%
of the gross proceeds of the offering. In the Underwriting Agreement, each of
the Underwriters has severally agreed, subject to the terms and conditions set
forth therein, to purchase all of the Units offered hereby if any of such Units
are purchased. The obligations of the Underwriters under the Underwriting
Agreement may be terminated at their discretion on the occurrence of certain
stated events, including the occurrence of a material adverse change in the
state of the financial markets. Under certain circumstances, the commitments of
non-defaulting Underwriters may be increased.



    The Underwriters may also purchase up to 1,800,000 Units from the Company at
the public offering price at any time up to 30 days after the date of the
prospectus. The Underwriters may exercise this option solely to cover
over-allotments, if any. This prospectus also qualifies the grant of the
over-allotment option and the issuance of the Common Shares and Warrants
comprising the Units issuable on exercise of the over-allotment option. If the
Underwriters exercise the option in full, the total underwriting commission will
be C$12,028,080 ($7,672,800, based on the US dollar offering price of $13.90 per
Unit), and the net proceeds to the Company, before expenses, will be
C$288,673,920 ($184,147,200, based on the US dollar offering price of
$13.90 per Unit).


    This offering is being made concurrently in all provinces of Canada and in
the United States pursuant to the multijurisdictional disclosure system
implemented by securities regulatory authorities in Canada and the United
States. The Units will be offered in the United States and Canada through the
Underwriters either directly or through their respective U.S. or Canadian
broker-dealer affiliates or agents. Subject to applicable law, the Underwriters
may offer the Units outside Canada and the United States.

    It is a condition of closing that a shelf registration statement be declared
effective by the SEC and that the Company have filed with the SEC a prospectus
supplement registering the offering of Common Shares issuable from time to time
on the exercise of the Warrants. See "Details of the Offering -- Warrants".

    The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the United States Securities Act of
1933, as amended, and applicable Canadian securities legislation, and to
contribute to payments that the Underwriters may be required to make in respect
thereof.

    The Underwriters, as principals, conditionally offer the Units, subject to
prior sale, if, as and when issued by the Company and accepted by the
Underwriters in accordance with the conditions contained in the Underwriting
Agreement and subject to the approval of certain legal matters on behalf of the
Company by

                                       25
<Page>
Davies Ward Phillips & Vineberg LLP, Toronto, Ontario and by Troutman
Sanders LLP, McLean, Virginia and on behalf of the Underwriters by Lang
Michener, Toronto, Ontario and Shearman & Sterling, Toronto, Ontario and
New York, New York.


    Subscriptions will be received subject to rejection or allotment in whole or
in part and the right is reserved to close the subscription books at any time
without notice. It is expected that the closing will be held on November 14,
2002, or such other date as may be agreed on by the Company and the
Underwriters, but, in any event, not later than November 27, 2002. Certificates
representing the Common Shares and the Warrants comprising the Units in
definitive form will be available for delivery at closing.


    Pursuant to policy statements of the Ontario Securities Commission and the
Commission des valeurs mobilieres du Quebec, the Underwriters may not,
throughout the period of distribution under this short form prospectus, bid for
or purchase Common Shares or Warrants. The foregoing restriction is subject to
certain exceptions, as long as the bid or purchase is not engaged in for the
purpose of creating actual or apparent active trading in or raising the price of
such securities. These exceptions include a bid or purchase permitted under the
by-laws and rules of the TSX relating to market stabilization and passive market
making activities and a bid or purchase made to and on behalf of a customer
where the order was not solicited during the period of distribution. Pursuant to
the first-mentioned exception, in connection with this offering, the
Underwriters may over-allot or effect transactions which stabilize or maintain
the market price of the Common Shares or Warrants at levels other than those
which might otherwise prevail on the open market. Such transactions, if
commenced, may be discontinued at any time.


    Subject to the foregoing, in order to facilitate this offering, the
Underwriters may purchase and sell Common Shares and Warrants in the open
market. These transactions may include short sales, stabilizing transactions and
purchases to cover positions created by short sales. Short sales involve the
sale by the Underwriters of a greater number of securities than they are
required to purchase in this offering. Stabilizing transactions consist of
certain bids or purchases made for the purpose of preventing or retarding a
decline in the market price of such securities while this offering is in
progress. The Underwriters also may impose penalty bids, under which selling
concessions allowed to syndicate members or other broker-dealers participating
in this offering are reclaimed if Units previously distributed in this offering
are repurchased in connection with stabilization transactions or otherwise.
These activities by the Underwriters may stabilize, maintain or otherwise affect
the market price of the Common Shares or the Warrants. As a result, the price of
the Common Shares or the Warrants may be higher than the price that might
otherwise exist in the open market. If these activities are commenced, they may
be discontinued by the Underwriters at any time. These transactions may be
effected on the NYSE, the TSX, Nasdaq or otherwise. On October 31, 2002 and
November 1, 2002, the Underwriters purchased an aggregate of 363,000 Common
Shares at prices that ranged from $12.00 to $12.25 per Common Share.



    Because more than 10% of the proceeds of this offering, not including
underwriting compensation, may be received by entities who are affiliated with
National Association of Securities Dealers, Inc. members who are participating
in this offering, this offering is being conducted in compliance with the NASD
Conduct Rule 2710(c)(8), which requires that the public offering price of an
equity security be no higher than the price recommended by a qualified
independent underwriter which has participated in the offering and performed its
usual standard of due diligence with respect thereto. Merrill Lynch, Pierce,
Fenner & Smith Incorporated has agreed to act as, and assume the responsibility
for acting as, qualified independent underwriter with respect to the offering,
and the public offering price of the Units is no higher than that recommended by
Merrill Lynch, Pierce, Fenner & Smith Incorporated.


    The Company and its officers and directors have agreed not to issue, sell or
otherwise dispose of any Common Shares (other than in this offering) or
securities convertible into or exchangeable or exercisable for such common
shares, or publicly announce an intention to do so, without the prior written
consent of the Underwriters, for a period of 90 days after the date of the
prospectus. The restrictions in the foregoing sentence shall not apply to
(i) any Common Shares issuable on exercise of the Warrants, (ii) any Common
Shares issued or options to purchase Common Shares granted pursuant to existing
employee plans of the Company referred to herein, (iii) any Common Shares issued
in connection with the rights described under "Description of Share
Capital -- Shareholder Rights Plan", (iv) any Common Shares issued pursuant to
any non-employee director stock plan or dividend reinvestment plan, (v) any
Common Shares issuable on the conversion of any of the

                                       26
<Page>
Convertible Debentures, (vi) any Common Shares issued in connection with "flow
through financing" by the Company in an amount up to C$4 million, or (vii) any
securities issuable after 30 days after the date of this prospectus pursuant to
an acquisition, merger, consolidation or amalgamation transaction involving the
Company.

              RELATIONSHIP BETWEEN ISSUER AND CERTAIN UNDERWRITERS


    Each of TD Securities, Scotia Capital Inc. and CIBC World Markets Inc. is a
wholly-owned subsidiary of a bank that is a lender under the Company's revolving
bank credit facility in the maximum aggregate amount of $125 million. As of
November 5, 2002, the Company had approximately $30 million outstanding under
such credit facility. Consequently the Company may be considered a connected
issuer of each of TD Securities Inc., Scotia Capital Inc. and CIBC World
Markets Inc. for the purpose of securities legislation in certain Canadian
provinces. See "Use of Proceeds" and "Plan of Distribution". The Company is in
compliance with the terms of this credit facility. Indebtedness under the
Company's revolving bank credit facility is secured by a charge on substantially
all of the property relating to the LaRonde Mine and the El Coco Property. The
decision to distribute the Units, including the determination of the terms of
this offering will be made through negotiations between the Company and the
Underwriters. The lenders have not had any involvement in such decision or
determination. As a consequence of this offering, TD Securities Inc., Scotia
Capital Inc. and CIBC World Markets Inc. will each receive their share of the
Underwriters' fee. The Company's annual mine plan is subject to the approval of
the lenders. The proceeds of this offering will be applied to temporarily reduce
the Company's indebtedness under the Company's revolving bank credit facility.
See "Use of Proceeds".


                                 LEGAL MATTERS

    Certain legal matters relating to this offering will be passed upon on
behalf of the Company by Davies Ward Phillips & Vineberg LLP, Toronto, Ontario
and by Troutman Sanders LLP, McLean, Virginia and on behalf of the Underwriters
by Lang Michener, Toronto, Ontario and Shearman & Sterling, Toronto, Ontario and
New York, New York. At the date hereof, partners and associates of each of
Davies Ward Phillips & Vineberg LLP, Troutman Sanders LLP and Lang Michener own
beneficially, directly or indirectly, less than 1% of the Common Shares.

                     AUDITORS, TRANSFER AGENT AND REGISTRAR

    The auditors of the Company are Ernst & Young LLP, Chartered Accountants,
Ernst & Young Tower, 222 Bay Street, P.O. Box 251, Toronto, Ontario M5K 1J7. The
audited consolidated financial statements of the Company as at December 31, 2001
and 2000 and for each of the three-year period ended December 31, 2001 have been
audited by Ernst Young and are incorporated by reference herein in reliance on
the authority of said firm as experts in auditing and accounting.

    The registrar and transfer agent for the Common Shares and Warrants is
Computershare Trust Company of Canada through its offices at 100 University
Avenue, Toronto, Ontario M5J 2Y1.

                      DOCUMENTS INCORPORATED BY REFERENCE

    The following documents filed with the securities commissions or similar
authorities in each of the provinces of Canada are specifically incorporated by
reference in and form an integral part of this prospectus:

    (a) the Company's Annual Information Form dated April 24, 2002 consisting of
       the Company's Annual Report on Form 20-F under the United States
       Securities Exchange Act of 1934 for the fiscal year ended December 31,
       2001;

    (b) the audited consolidated financial statements of the Company, including
       the notes thereto, as at December 31, 2001 and 2000 and for each of the
       years in the three-year period ended December 31, 2001 together with the
       auditors' report thereon;

    (c) management's discussion and analysis of financial condition and results
       of operations of the Company for the year ended December 31, 2001;

                                       27
<Page>
    (d) the Management Information Circular dated April 24, 2002, prepared in
       connection with the Company's annual meeting of shareholders on June 21,
       2002 (excluding the sections entitled "Composition of Compensation
       Committee", "Report on Executive Compensation", "Performance Graph" and
       "Statement of Corporate Governance Practices");

    (e) the information set forth under the caption "Summarized Quarterly Data"
       on pages 40 and 41 of the Company's annual report for the year ended
       December 31, 2001;

    (f) management's discussion and analysis of results of operations and
       liquidity and capital resources of the Company for the nine months ended
       September 30, 2002 and unaudited consolidated financial statements of the
       Company as at and for the nine months ended September 30, 2002;

    (g) the material change report dated February 22, 2002 filed by the Company
       in respect of the redemption of the convertible notes due 2004; and

    (h) the material change report dated May 22, 2002 filed by the Company in
       respect of the forgiveness of certain intercompany debt owed to the
       Company by Sudbury Contact.

    All documents of the type referred to above, and any material change reports
(excluding confidential material change reports), filed by the Company with any
securities commission or similar regulatory authority in Canada, subsequent to
the date of this prospectus and prior to the termination of the distribution
under this prospectus shall be deemed to be incorporated by reference in this
prospectus.

    ANY STATEMENT CONTAINED HEREIN OR IN A DOCUMENT INCORPORATED OR DEEMED TO BE
INCORPORATED BY REFERENCE HEREIN SHALL BE DEEMED TO BE MODIFIED OR SUPERSEDED
FOR THE PURPOSES OF THIS PROSPECTUS TO THE EXTENT THAT A STATEMENT CONTAINED
HEREIN, OR IN ANY OTHER SUBSEQUENTLY FILED DOCUMENT WHICH ALSO IS INCORPORATED
OR IS DEEMED TO BE INCORPORATED BY REFERENCE HEREIN, MODIFIES OR SUPERSEDES SUCH
STATEMENT. THE MODIFYING OR SUPERSEDING STATEMENT NEED NOT STATE THAT IT HAS
MODIFIED OR SUPERSEDED A PRIOR STATEMENT OR INCLUDE ANY OTHER INFORMATION SET
FORTH IN THE DOCUMENT WHICH IT MODIFIES OR SUPERSEDES. THE MAKING OF A MODIFYING
OR SUPERSEDING STATEMENT WILL NOT BE DEEMED AN ADMISSION FOR ANY PURPOSES THAT
THE MODIFIED OR SUPERSEDED STATEMENT, WHEN MADE, CONSTITUTED A
MISREPRESENTATION, AN UNTRUE STATEMENT OF A MATERIAL FACT OR AN OMISSION TO
STATE A MATERIAL FACT THAT IS REQUIRED TO BE STATED OR THAT IS NECESSARY TO MAKE
A STATEMENT NOT MISLEADING IN LIGHT OF THE CIRCUMSTANCES IN WHICH IT WAS MADE.
ANY STATEMENT SO MODIFIED OR SUPERSEDED SHALL NOT BE DEEMED, EXCEPT AS SO
MODIFIED OR SUPERSEDED TO CONSTITUTE A PART OF THIS PROSPECTUS.

    INFORMATION HAS BEEN INCORPORATED BY REFERENCE IN THIS SHORT FORM PROSPECTUS
FROM DOCUMENTS FILED WITH SECURITIES COMMISSIONS OR SIMILAR AUTHORITIES IN
CANADA. Copies of the documents incorporated herein by reference may be obtained
on request without charge from the Corporate Secretary, Agnico-Eagle Mines
Limited, Suite 500, 145 King Street East, Toronto, Ontario M5C 2Y7, (Telephone
(416) 947-1212). For the purpose of the Province of Quebec, this simplified
prospectus contains information to be completed by consulting the permanent
information record. A copy of the permanent information record may be obtained
from the Corporate Secretary of Agnico-Eagle Mines Limited at the
above-mentioned address and telephone number.

                             AVAILABLE INFORMATION

    The Company has filed with the SEC a registration statement on Form F-10,
together with all amendments and supplements thereto, under the United States
Securities Act of 1933, as amended, with respect to the Common Shares and
Warrants offered hereby. This prospectus, which forms a part of the registration
statement, does not contain all the information set forth in the registration
statement, certain parts of which have been omitted in accordance with the rules
and regulations of the SEC. For further information with respect to the Company,
and the Common Shares and Warrants offered in this prospectus, reference is made
to the registration statement and to the schedules and exhibits filed therewith.
Statements contained in this prospectus as to the contents of certain documents
are not necessarily complete and, in each instance, reference is made to the
copy of the document filed as an exhibit to the registration statement. Each
such statement is qualified in its entirety by such reference.

    The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports and other information with the SEC.
Under a multijurisdictional disclosure system

                                       28
<Page>
adopted by the United States, such reports and other information may be prepared
in accordance with the disclosure requirements of Canada, which requirements are
different from those of the United States. The Company is exempt from the rules
under Section 14 of the Exchange Act prescribing the furnishing and content of
proxy statements, and the Company's officers, directors and principal
shareholders are exempt from the reporting and short-swing profit recovery
provisions contained in Section 16 of the Exchange Act. Under the Exchange Act,
the Company is not required to publish financial statements as frequently or as
promptly as U.S. companies. Any information filed with the SEC can be read and
copied at prescribed rates at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Information on the operation of the Public
Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

                  ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES

    The Company is an Ontario corporation with its principal place of business
in Canada. All of its directors and officers and certain experts named in this
prospectus are residents of Canada and all or a substantial portion of its
assets and the assets of such persons are located outside the United States.
Consequently, it may be difficult for United States investors to effect service
of process within the United States on the Company or its directors or officers,
or to realize in the United States on judgments of courts of the United States
predicated on civil liabilities under the United States Securities Act of 1933,
as amended. Investors should not assume that Canadian courts would enforce
judgments of United States courts obtained in actions against the Company or
such persons predicated on the civil liability provisions of the United States
federal securities laws or the securities or "blue sky" laws of any state within
the United States or would enforce, in original actions, liabilities against the
Company or such persons predicated on the United States federal securities or
any such state securities or blue sky laws.


             DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT



    The following documents have been filed with the SEC as part of the
registration statement of which this prospectus forms a part: the documents
referred to under "Documents Incorporated by Reference"; consent of Ernst &
Young LLP; consent of Marc Legault; Underwriting Agreement; form of Warrant
Indenture and the powers of attorney.


                                       29
<Page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------


                          12,000,000 COMMON SHARES AND



                       6,000,000 SHARE PURCHASE WARRANTS


                                     [LOGO]

                           AGNICO-EAGLE MINES LIMITED

                                     UNITS

                                ---------------

                              P R O S P E C T U S

                              -------------------

                              MERRILL LYNCH & CO.
                                 TD SECURITIES

                           SCOTIA CAPITAL (USA) INC.


                              YORKTON CAPITAL INC.


                               CIBC WORLD MARKETS


                              SALOMON SMITH BARNEY


                               DUNDEE SECURITIES


                               SPROTT SECURITIES



                                NOVEMBER 6, 2002


- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Page>

                                    PART II
                  INFORMATION NOT REQUIRED TO BE DELIVERED TO
                             OFFEREES OR PURCHASERS


Indemnification.

    Under the BUSINESS CORPORATIONS ACT (Ontario), the Registrant may indemnify
a present or former director or officer or person who acts or acted at the
Registrant's request as a director or officer of another corporation of which
the Registrant is or was a shareholder or creditor, and his heirs and legal
representatives, against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, reasonably incurred by him in
respect of any civil, criminal or administrative action or proceeding to which
he is made a party by reason of his being or having been a director or officer
of the Registrant or body corporate and provided that the director or officer
acted honestly and in good faith with a view to the best interest of the
Registrant and, in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, had reasonable grounds for believing
that his conduct was lawful. Such indemnification may be made in connection with
a derivative action only with court approval. A director is entitled to
indemnification from the Registrant as a matter of right if he was substantially
successful on the merits in his defense and fulfilled the conditions set forth
above.

    In accordance with the BUSINESS CORPORATIONS ACT (Ontario), the by-laws of
the Registrant indemnify a director or officer, a former director or officer, or
a person who acts or acted at a Registrant's request as a director or officer of
a corporation in which the Registrant is or was a shareholder or creditor
against any and all losses and expenses reasonably incurred by him in respect of
any civil, criminal, administrative action or proceeding to which he was made a
party by reason of being or having been a director or officer of the Registrant
or other corporation if he acted honestly and in good faith with a view to the
best interests of the Registrant, or, in the case of a criminal or
administrative action or proceeding that is enforced by monetary penalty, he had
reasonable grounds in believing that his conduct was lawful.

    A policy of directors' and officers' liability insurance is maintained by
the Registrant which insures directors and officers for losses as a result of
claims against the directors and officers of the Registrant in their capacity as
directors and officers and also reimburses the Registrant for payments made
pursuant to the indemnity provisions under the By-Laws and the BUSINESS
CORPORATIONS ACT (Ontario).

    Insofar as indemnification for liabilities under the Securities Act of 1933
may be permitted to directors, officers or persons controlling the Registrant
pursuant to the foregoing provisions, the Registrant has been advised that in
the opinion of the Commission such indemnification is against public policy in
the United States as expressed in the Securities Act of 1933 and is therefore
unenforceable.

                                      II-1
<Page>

                                    EXHIBITS


    The following exhibits are filed as part of the registration statement:


<Table>
<Caption>
     EXHIBIT NO.        DESCRIPTION
- ---------------------   -----------
<C>                     <S>
         3.1            Underwriting Agreement.

         4.1            Annual Information Form dated April 24, 2002 consisting of
                        the Registrant's Annual Report on Form 20-F under the United
                        States Securities Exchange Act of 1934 for the fiscal year
                        ended December 31, 2001, incorporated by reference to the
                        Registrant's Annual Report on Form 20-F filed May 13, 2002.

         4.2            Audited comparative consolidated financial statements of the
                        Registrant, including the notes thereto, as at December 31,
                        2001 and 2000 and for each of the years in the three year
                        period ended December 31, 2001, together with the auditors'
                        report thereon and management's discussion and analysis of
                        financial condition and results of operations of the
                        Registrant for such periods, incorporated by reference to
                        the Registrant's Annual Report on Form 20-F filed May 13,
                        2002.

         4.3            Management Information Circular dated April 24, 2002
                        (excluding the sections entitled "Composition of
                        Compensation Committee", "Report on Executive Compensation",
                        "Performance Graph", and "Statement of Corporate Governance
                        Practices"), incorporated by reference to the Registrant's
                        Annual Report on Form 20-F filed May 13, 2002.

         4.4            Management's discussion and analysis of results of
                        operations and liquidity and capital resources of the
                        Registrant for the nine months ended September 30, 2002 and
                        unaudited consolidated financial statements of the
                        Registrant as at September 30, 2002 and for the nine months
                        ended September 30, 2002, incorporated by reference to the
                        Registrant's Form 6-K filed October 24, 2002.

         4.5            The information set forth under the caption "Summarized
                        Quarterly Data", at pages 40 and 41 of the Registrant's
                        2001 Annual Report, incorporated by reference to the
                        Registrant's Annual Report on Form 20-F filed May 13, 2002.

         4.6            Material change report dated February 22, 2002 filed by the
                        Registrant in respect of the redemption by the Registrant of
                        the Registrant's convertible notes due 2004, incorporated by
                        reference to the Registrant's Registration Statement on
                        Form F-10/A (File No. 333-85192) filed on April 11, 2002.

         4.7            Material change report dated May 22, 2002 filed by the
                        Registrant in respect of the forgiveness of certain
                        intercompany debt owed to the Registrant by Sudbury Contact
                        Mines Limited, incorporated by reference to the Registrant's
                        Form 6-K filed on November 5, 2002.

         5.1            Consent of Ernst & Young LLP, Independent Chartered
                        Accountants.*

         5.2            Consent of Marc Legault.*

         6.1            Power of Attorney, included as part of Signatures.*

         7.1            Form of Warrant Indenture.
</Table>


- ------------

* Previously filed.

                                      II-2
<Page>

                                    PART III
                 UNDERTAKING AND CONSENT TO SERVICE OF PROCESS


ITEM 1.  UNDERTAKING

    The Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to the securities registered pursuant to Form F-10 or to transactions
in said securities.

ITEM 2.  CONSENT TO SERVICE OF PROCESS.

    Concurrently with the filing of the initial Registration Statement on
Form F-10, the Registrant previously filed with the Commission a written
irrevocable consent and power of attorney on Form F-X.

                                     III-1
<Page>

                                   SIGNATURES


    Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form F-10 and has duly caused this amendment to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Toronto, Province of Ontario, Country of Canada, on
November 6, 2002.

<Table>
<S>                                             <C> <C>
                                                AGNICO-EAGLE MINES LIMITED

                                                By                  */s/ SEAN BOYD
                                                    ---------------------------------------------
                                                                      Sean Boyd,
                                                                      PRESIDENT
</Table>

    Pursuant to the requirements of the Securities Act, this amendment to the
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<Table>
<Caption>
                      SIGNATURE                                     TITLE                      DATE
                      ---------                                     -----                      ----
<C>                                                    <S>                               <C>
                                                       President and Chief Executive
                   */s/ SEAN BOYD                      Officer and a Director of the
     -------------------------------------------       Corporation (Principal Executive  November 6, 2002
                      Sean Boyd                        Officer)

                                                       Vice President, Finance and
                 */s/ DAVID GAROFALO                   Chief Financial Officer and a
     -------------------------------------------       Director of the Corporation       November 6, 2002
                   David Garofalo                      (Principal Financing and
                                                       Accounting Officer)

              */s/ DOUGLAS R. BEAUMONT
     -------------------------------------------       Director                          November 6, 2002
            Douglas R. Beaumont, P. Eng.

                */s/ JOHN T. CLEMENT
     -------------------------------------------       Director                          November 6, 2002
                John T. Clement, Q.C.

                  */s/ IRVING DOBBS
     -------------------------------------------       Director                          November 6, 2002
                    Irving Dobbs

                 */s/ DR. ALAN GREEN
     -------------------------------------------       Director                          November 6, 2002
                   Dr. Alan Green

              */s/ WENCEL A. HUBACHECK
     -------------------------------------------       Director                          November 6, 2002
            Wencel A. Hubacheck, P. Eng.
</Table>

                                     III-2
<Page>

<Table>
<Caption>
                      SIGNATURE                                     TITLE                      DATE
                      ---------                                     -----                      ----
<C>                                                    <S>                               <C>
     -------------------------------------------       Director
                 Bernard Kraft, C.A.

                 */s/ JAMES D. NASSO
     -------------------------------------------       Chairman                          November 6, 2002
                   James D. Nasso

     -------------------------------------------       Director
                   Ernest Sheriff

                /s/ DAVID J. LEVENSON
     -------------------------------------------       Authorized United States          November 6, 2002
                  David J. Levenson                    Representative
</Table>

    * Pursuant to powers of attorney executed by the persons named above whose
names are preceded by an asterisk, David J. Levenson, as attorney-in-fact, does
hereby sign this Amendment to the Registration Statement on behalf of each such
person, in each case in the capacity indicated, on the date indicated.

<Table>
<C>                                                    <S>                                 <C>
                /s/ DAVID J. LEVENSON
     -------------------------------------------
                 David J. Levenson,
                  ATTORNEY-IN-FACT
</Table>

                                     III-3
<Page>

                                 EXHIBIT INDEX



<Table>
<Caption>
                                                                                        PAGE
     EXHIBIT NO.        DESCRIPTION                                                    NUMBER
- ---------------------   -----------                                                   --------
<C>                     <S>                                                           <C>
         3.1            Underwriting Agreement.

         4.1            Annual Information Form dated April 24, 2002 consisting of
                        the Registrant's Annual Report on Form 20-F under the United
                        States Securities Exchange Act of 1934 for the fiscal year
                        ended December 31, 2001, incorporated by reference to the
                        Registrant's Annual Report on Form 20-F filed May 13, 2002.

         4.2            Audited comparative consolidated financial statements of the
                        Registrant, including the notes thereto, as at December 31,
                        2001 and 2000 and for each of the years in the three year
                        period ended December 31, 2001, together with the auditors'
                        report thereon and management's discussion and analysis of
                        financial condition and results of operations of the
                        Registrant for such periods, incorporated by reference to
                        the Registrant's Annual Report on Form 20-F filed May 13,
                        2002.

         4.3            Management Information Circular dated April 24, 2002
                        (excluding the sections entitled "Composition of
                        Compensation Committee", "Report on Executive Compensation",
                        "Performance Graph", and "Statement of Corporate Governance
                        Practices"), incorporated by reference to the Registrant's
                        Annual Report on Form 20-F filed May 13, 2002.

         4.4            Management's discussion and analysis of results of
                        operations and liquidity and capital resources of the
                        Registrant for the nine months ended September 30, 2002 and
                        unaudited consolidated financial statements of the
                        Registrant as at September 30, 2002 and for the nine months
                        ended September 30, 2002, incorporated by reference to the
                        Registrant's Form 6-K filed October 24, 2002.

         4.5            The information set forth under the caption "Summarized
                        Quarterly Data", at pages 40 and 41 of the Registrant's
                        2001 Annual Report, incorporated by reference to the
                        Registrant's Annual Report on Form 20-F filed May 13, 2002.

         4.6            Material change report dated February 22, 2002 filed by the
                        Registrant in respect of the redemption by the Registrant of
                        the Registrant's convertible notes due 2004, incorporated by
                        reference to the Registrant's Registration Statement on
                        Form F-10/A (File No. 333-85192) filed on April 11, 2002.

         4.7            Material change report dated May 22, 2002 filed by the
                        Registrant in respect of the forgiveness of certain
                        intercompany debt owed to the Registrant by Sudbury Contact
                        Mines Limited, incorporated by reference to the Registrant's
                        Form 6-K filed on November 5, 2002.

         5.1            Consent of Ernst & Young LLP, Independent Chartered
                        Accountants.*

         5.2            Consent of Marc Legault.*

         6.1            Power of Attorney, included as part of Signatures.*

         7.1            Form of Warrant Indenture.
</Table>


- ------------

* Previously filed.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>3
<FILENAME>a2092806zex-3_1.txt
<DESCRIPTION>EXHIBIT 3.1
<TEXT>
<Page>
                                                                    EXHIBIT 3.1

                             UNDERWRITING AGREEMENT



                                                    Dated as of October 31, 2002


Agnico-Eagle Mines Limited
145 King Street East
Suite 500
Toronto, Ontario
M5C 2Y7


Attention:  David Garofalo
            Vice President, Finance and Chief Financial Officer


Dear Sirs:

         TD Securities Inc., Merrill Lynch Canada Inc., Scotia Capital Inc.,
Yorkton Securities Inc., CIBC World Markets Inc., Salomon Smith Barney Canada
Inc., Dundee Securities Corporation and Sprott Securities Inc. (collectively the
"Underwriters" and individually an "Underwriter") understand that Agnico-Eagle
Mines Limited (hereinafter referred to as the "Company") proposes to issue and
sell 12,000,000 units (the "Firm Units") and, at the election of the
Underwriters, up to 1,800,000 units (the Units in respect of which such option
is exercised are called the "Optional Units"). The Firm Units and the Optional
Units are referred to collectively herein as the "Units". Each Unit shall
consist of one common share in the capital of the Company (a "Share") and
one-half of a common share purchase warrant (a "Warrant"). Each whole Warrant
shall entitle the holder thereof to purchase one Common Share for a price of US$
19.00 per Common Share or, at the election of such holder, the Canadian dollar
equivalent of such exercise price per Common Share calculated as specified in
the Warrant Indenture (as hereinafter defined) at any time on or prior to five
years from the Closing Date (as hereinafter defined). The Warrants shall be
issued pursuant to, and the exercise thereof shall be governed by, the
provisions of a warrant indenture (the "Warrant Indenture") to be entered into
between the Company and Computershare Trust Company of Canada (the "Warrant
Trustee"), in the form and on terms satisfactory to the Company and the
Underwriters acting reasonably and in accordance with the description in the
Canadian Preliminary Prospectus and U.S. Preliminary Prospectus (as hereinafter
defined). The Units shall be separated at the Closing Time into Shares and
Warrants.

         The Underwriters understand that the Company has prepared and filed
with the provincial



                                       1
<Page>

securities regulatory authorities (the "Qualifying Authorities") in each
Canadian province (the "Qualifying Provinces") a preliminary short form
prospectus (including the documents incorporated by reference therein, the
"Canadian Preliminary Prospectus") relating to the Units (in the English and
French languages, as applicable). The Company has identified the Ontario
Securities Commission (the "Reviewing Authority") as its principal regulator in
respect of the offering of the Units and the Canadian Preliminary Prospectus has
been filed with the Qualifying Authorities pursuant to National Policy 43-201.
The Company has also prepared and filed with the United States Securities and
Exchange Commission (the "Commission") a registration statement on Form F-10
(File No. 333-100850) covering the registration of the Shares and Warrants
comprising the Units under the United States Securities Act of 1933, as amended
(the "1933 Act") and the rules and regulations of the Commission thereunder (the
"1933 Act Regulations"), including the Canadian Preliminary Prospectus (with
such deletions therefrom and additions thereto as are permitted or required by
Form F-10 and the applicable rules and regulations of the Commission) (including
the documents incorporated by reference therein, the "U.S. Preliminary
Prospectus"). The Company has also prepared and filed with the Commission an
appointment of agent for service of process upon the Company on Form F-X (the
"Form F-X") in conjunction with the filing of the Registration Statement (as
hereinafter defined).

        The Company, as and to the extent indicated above, hereby grants to the
Underwriters the right to purchase at their election up to 1,800,000 Optional
Units, at the purchase price per Unit set forth in the paragraph below, for the
sole purpose of covering over-allotments in the sale of the Firm Units. Any such
election to purchase Optional Units may be exercised only by written notice from
the Representatives (as hereinafter defined) on behalf of the Underwriters, to
the Company. Such notice shall set forth (i) the aggregate number of Optional
Units to be purchased and (ii) the Closing Date for the Optional Units, provided
that such Closing Date shall not be less than 3 Business Days and no more than 7
Business Days following the date of such notice and in no event later than the
30th day following the date of the Final Prospectus.

        On the basis of the representations, warranties, covenants and
agreements contained herein, but subject to the terms and conditions herein set
forth, (i) the Company agrees to sell to each of the Underwriters and each of
the Underwriters agrees, severally and not jointly, to purchase from the Company
the respective percentage of the Firm Units set forth opposite the respective
names of the Underwriters in Section 11, at a purchase price of $21.79 per Unit
for Firm Units initially offered for sale in Canada or US$13.90 per Unit (being
the equivalent of the corresponding Canadian dollar amount based on the inverse
of the noon buying rate of the Federal Reserve Bank of New York on the Business
Day prior to the date of this agreement (the "Noon Buying Rate")) for Firm Units
initially offered for sale in the United States, and (ii) in the event and to
the extent that the Underwriters shall exercise the election to purchase
Optional Units (the "Over-allotment Option") as provided herein, the Company
agrees to sell to each of the Underwriters and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company the percentage set forth
opposite the name of such Underwriter in Section 11 of the number of Optional
Units as to which election shall have been exercised at a purchase price of
$21.79 per Unit for Optional Units initially offered for sale in Canada or
US$13.90 per Unit (being the equivalent of the corresponding Canadian dollar
amount based on the inverse of the Noon Buying Rate) for Optional Units
initially offered for sale in the United States.


                                       2
<Page>

         In this agreement:

(a)  "Business Day" means a day which is not a Saturday, a Sunday or a statutory
     or civic holiday in the City of Toronto or The City of New York;

(b)  "Canadian Preliminary Prospectus" has the meaning ascribed thereto in the
     second paragraph of this agreement;

(c)  "Canadian Preliminary Warrant Prospectus" has the meaning ascribed thereto
     in paragraph 1(b) of this agreement;

(d)  "Canadian Prospectus" means the Final Prospectus for which a Decision
     Document has been obtained from the Reviewing Authority, including the
     documents incorporated by reference therein;

(e)  "Canadian Warrant Prospectus" means the final base shelf prospectus for
     which a Warrant Decision Document has been obtained from the Reviewing
     Authority, including the documents incorporated by reference therein and,
     if a prospectus supplement has been filed to qualify the distribution of
     the Underlying Shares, "Canadian Warrant Prospectus" shall mean the final
     base shelf prospectus for which a Warrant Decision Document has been
     obtained from the Reviewing Authority, the documents incorporated therein
     by reference and such prospectus supplement;

(f)  "Canadian Securities Laws" means all applicable securities laws in each of
     the Qualifying Provinces and the respective rules or regulations made
     thereunder together with applicable published policy statements of the
     securities regulatory authorities in such provinces;

(g)  "CIA" has the meaning ascribed thereto in section 2(c) of this agreement;

(h)  "Closing" means the completion of the issue and sale by the Company of the
     Units and the purchase by the Underwriters of the Units pursuant to this
     agreement;

(i)  "Closing Date" means November 14, 2002 or such later date as the Company
     and the Underwriters may agree upon in writing, provided that in no event
     shall the Closing Date be later than November 27, 2002 and in the event the
     Over-allotment Option is exercised, "Closing Date" shall mean each date on
     which the Underwriters have agreed to purchase the Optional Units in
     accordance with the terms of this agreement;

(j)  "Closing Time" means 8:30 a.m. (Toronto time) on any Closing Date or such
     other time on the Closing Date as the Company and the Underwriters may
     agree;

(k)  "Commission" has the meaning ascribed thereto in the second paragraph of
     this agreement;

(l)  "Common Shares" means the common shares in the capital of the Company;



                                       3
<Page>

(m)  "Decision Document" means the final MRRS Decision Document issued by the
     Reviewing Authority (in accordance with National Policy 43-201) evidencing
     that final receipts have been issued for the Final Prospectus by each
     Qualifying Authority;

(n)  "Distribution" means "distribution" of the Units or "distribution to the
     public" of the Units as those terms are defined in applicable securities
     legislation;

(o)  "Exchanges" means the Toronto Stock Exchange (referred to herein as the
     "TSX"), the New York Stock Exchange (referred to herein as the "NYSE") and
     the Nasdaq National Market (referred to herein as the "NASDAQ");

(p)  "Final Filing Time" has the meaning ascribed thereto in section 1(a) of
     this agreement;

(q)  "Final Prospectus" has the meaning ascribed thereto in section 1(a) of this
     agreement;

(r)  "Final Warrant Prospectus" has the meaning ascribed thereto in section 1(c)
     of this agreement;

(s)  "Financial Information" means (1) the consolidated comparative financial
     statements of the Company for (i) the year ended December 31, 2001, the
     notes thereto and the auditors' report thereon, (ii) the nine months ended
     September 30, 2002 and the notes thereto, (2) the Company's Management
     Discussion and Analysis of Financial Conditions and Results of Operations
     (i) for the 2001 fiscal year, (ii) for the nine months ended September 30,
     2002, (3) the information set forth under the caption "Summarized Quarterly
     Data" in the Company's annual report for the year ended December 31, 2001,
     (4) any other financial statements, incorporated or deemed to be
     incorporated by reference in the Canadian Prospectus or the U.S. Prospectus
     and (5) any financial data derived from the foregoing;

(t)  "Firm Units" has the meaning ascribed thereto in the first paragraph of
     this agreement;

(u)  "Form 20-F" means the Annual Report of the Company for the year ended
     December 31, 2001 under Form 20-F pursuant to the 1934 Act (including the
     documents incorporated by reference therein);

(v)  "Form F-X" has the meaning ascribed thereto in the second paragraph of this
     agreement;

(w)  "Indemnified Party" means a person or company who has the benefit of the
     indemnity provisions of Section 7 of this agreement;

(x)  "Indemnifying Party" means a party to this agreement which is under an
     obligation to indemnify an Indemnified Party under the indemnity provisions
     of Section 7 of this agreement;

(y)  "Material Adverse Effect" has the meaning ascribed thereto in paragraph
     2(g) of the agreement.



                                       4
<Page>

(z)  "misrepresentation", "material fact" and "material change" have the
     respective meanings ascribed thereto in the SECURITIES ACT (Ontario);

(aa) "Noon Buying Rate" has the meaning ascribed thereto in the fourth paragraph
     of this agreement;

(bb) "Optional Units" has the meaning ascribed thereto in the first paragraph of
     this agreement;

(cc) "Over-allotment Option" has the meaning ascribed thereto in the fourth
     paragraph of this agreement;

(dd) "Preliminary Prospectus" means each prospectus relating to the Units (1)
     used in the United States before the time the Registration Statement
     becomes effective or (2) used in Canada before the Decision Document has
     been obtained from the Reviewing Authority;

(ee) "Qualifying Authorities" has the meaning ascribed thereto in the second
     paragraph of this agreement;

(ff) "Qualifying Provinces" has the meaning ascribed thereto in the second
     paragraph of this agreement;

(gg) "Registration Statement" means the registration statement on Form F-10
     (file no. 333-100850) providing for the registration of the Shares and the
     Warrants under the 1933 Act and the 1933 Act Regulations, including the
     exhibits thereto, the U.S. Prospectus and the documents incorporated by
     reference therein, as amended at the time it becomes effective;

(hh) "Representatives" means TD Securities Inc. and Merrill Lynch Canada Inc.;

(ii) "Reviewing Authority" means the Ontario Securities Commission;

(jj) "Shares" has the meaning ascribed thereto in the first paragraph of this
     agreement;

(kk) "subsidiaries" means the subsidiaries of the Company within the meaning
     ascribed thereto under the BUSINESS CORPORATIONS ACT (Ontario);

(ll) "Supplementary Material" means collectively any amendment to the Canadian
     Prospectus or Registration Statement, any amended or supplemented
     prospectus or auxiliary material, information, evidence, return, report,
     application, statement or document that may be filed by or on behalf of the
     Company under Canadian Securities Laws, the 1933 Act or the 1934 Act prior
     to the Closing Time or, where such documents are deemed to be incorporated
     by reference into the Canadian Prospectus, Registration Statement or U.S.
     Prospectus, prior to the expiry of the period of distribution of the Units;

(mm) "this agreement" or "the agreement" means the agreement resulting from the
     acceptance by the Company of the offer made by the Underwriters by this
     letter;



                                       5
<Page>

(nn) "Underlying Shares" means the Common Shares issuable on exercise of the
     Warrants;

(oo) "Units" has the meaning ascribed thereto in the first paragraph of this
     agreement;

(pp) "U.S. Preliminary Prospectus" has the meaning ascribed thereto in the
     second paragraph of this agreement;

(qq) "U.S. Prospectus" means the prospectus included in the Registration
     Statement at the time it becomes effective, including the documents
     incorporated by reference therein;

(rr) "U.S. Warrant Base Prospectus" has the meaning ascribed thereto in
     paragraph 1(e) of this agreement;

(ss) "U.S. Warrant Prospectus" has the meaning ascribed thereto in paragraph
     1(e) of this agreement;

(tt) "United States" means the United States of America, its territories and
     possessions, any state of the United States and the District of Columbia;

(uu) "Warrant Form F-X" has the meaning ascribed thereto in paragraph 1(d) of
     this agreement;

(vv) "Warrants" has the meaning ascribed thereto in the first paragraph of this
     agreement;

(ww) "Warrant Decision Document" means, if the Final Warrant Prospectus was
     filed with more than one Qualifying Authority, the final MRRS Decision
     Document issued by the Reviewing Authority (in accordance with National
     Policy 43-201) evidencing that final receipts have been issued in respect
     of the Final Warrant Prospectus by each such Qualifying Authority or, if
     the Final Warrant Prospectus was filed solely with the Reviewing Authority,
     the receipt issued by the Reviewing Authority in respect of the Final
     Warrant Prospectus;

(xx) "Warrant Indenture" has the meaning ascribed thereto in the first paragraph
     of this agreement;

(yy) "Warrant Registration Statement" has the meaning ascribed thereto in
     paragraph 1(e) of this agreement;

(zz) "Warrant Trustee" has the meaning ascribed thereto in the first paragraph
     of this agreement;

(aaa) "1933 Act" has the meaning ascribed in the second paragraph of this
      agreement;

(bbb) "1933 Act Regulations" has the meaning ascribed thereto in the second
      paragraph of this agreement; and


                                       6
<Page>

(ccc) "1934 Act" means the United States Securities Exchange Act of 1934, as
      amended.



                              TERMS AND CONDITIONS

         SECTION 1. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:

(a)      FILING OF FINAL PROSPECTUS. The Company will, as soon as possible and
         in any event no later than 5:00 p.m. (Toronto time) on November 6, 2002
         (the "Final Filing Time"), prepare and file (1) with each Qualifying
         Authority, a final short form prospectus relating to the Units (in the
         English and French languages, as applicable, the "Final Prospectus")
         and will obtain a Decision Document in respect thereof; and (2) with
         the Commission, an amendment to the registration statement on form F-10
         (file no. 333-100850) providing for the registration of the Shares and
         the Warrants, including the Final Prospectus (with such deletions
         therefrom and additions thereto as are permitted or required by Form
         F-10 and the applicable rules and regulations of the Commission) and
         cause such amended registration statement to become effective under the
         1933 Act.

(b)      FILING OF PRELIMINARY WARRANT PROSPECTUS. The Company will, as soon as
         possible and in any event no later than the Business Day following the
         date of this agreement, prepare and file with the Reviewing Authority,
         a preliminary base shelf prospectus in accordance with the procedures
         set out in National Instrument 44-102 (the "Canadian Preliminary
         Warrant Prospectus") relating to the Underlying Shares and such other
         securities as the Company determines.

(c)      FILING OF FINAL WARRANT PROSPECTUS. The Company will, as soon as
         possible and in any event no later than 5:00 p.m. (Toronto time) on the
         Business Day prior to the Closing Date, prepare and file with the
         Reviewing Authority, a final base shelf prospectus prepared in
         accordance with the procedures set out in National Instrument 44-102
         and supplement thereto, relating to the Underlying Shares (the "Final
         Warrant Prospectus") and will obtain a Warrant Decision Document in
         respect thereof.

(d)      FILING OF WARRANT REGISTRATION STATEMENT. The Company will, as soon as
         possible and in any event no later than the Business Day following the
         date of this agreement, prepare and file with the Commission (1) a
         shelf registration statement on Form F-10 providing for the
         registration of the Company's Underlying Shares and such other
         securities as the Company determines, under the 1933 Act and the 1933
         Act Regulations, including the Canadian Preliminary Warrant Prospectus
         (with such deletions therefrom and additions thereto as are permitted
         or required by Form F-10 and the applicable rules and regulations of
         the Commission); and (2) an appointment of agent for service of process
         upon the Company on Form F-X in conjunction with the filing of such
         registration statement (the "Warrant Form F-X").

(e)      FILING OF AMENDMENT TO THE WARRANT REGISTRATION STATEMENT AND
         SUPPLEMENT TO THE U.S.



                                       7
<Page>

         WARRANT BASE PROSPECTUS. The Company will, as soon as possible and in
         any event no later than the Business Day prior to the Closing Date,
         file with the Commission an amendment to the registration statement on
         Form F-10 providing for the registration of the Underlying Shares and
         such other securities as the Company determines, including the Final
         Warrant Prospectus (with such deletions therefrom and additions thereto
         as are permitted or required by Form F-10 and the applicable rules and
         regulations of the Commission), and the Company will cause such
         registration statement to become effective pursuant to Rule 467 of the
         1933 Act. Such registration statement, including any exhibits and all
         documents incorporated therein by reference, as of the time it becomes
         effective, and in the event of any post-effective amendments, as of the
         date of the effectiveness of such amendment, is referred to herein as
         the "Warrant Registration Statement". The Company will, as soon as
         possible after the effectiveness of the Warrant Registration Statement,
         and in any event no later than the Business Day prior to the Closing
         Date, file with the Commission pursuant to General Instruction II.L of
         Form F-10, a prospectus supplement to the Warrant Registration
         Statement relating to the Underlying Shares. Such filing shall, in
         accordance with General Instruction II.L of Form F-10 be filed with the
         Commission within one Business Day after such supplement is filed with
         the Reviewing Authority.

         The prospectus included in the Warrant Registration Statement shall be
         referred to herein as the "U.S. Warrant Base Prospectus", and the U.S.
         Warrant Base Prospectus together with the prospectus supplement,
         including all documents incorporated by reference, relating to the
         offering of the Underlying Shares filed with the Commission pursuant to
         General Instruction II.L of Form F-10 following the execution of this
         agreement by the parties hereto is referred to herein as the "U.S.
         Warrant Prospectus"; provided that, prior to the filing of such
         supplement, the term "U.S. Warrant Prospectus" shall mean the U.S.
         Warrant Base Prospectus, including all documents incorporated by
         reference, together with any preliminary prospectus supplement relating
         to the offering of the Underlying Shares.

(f)      EFFECTIVENESS OF WARRANT REGISTRATION STATEMENT. The Company will use
         its reasonable efforts to maintain the effectiveness of the Warrant
         Registration Statement or another shelf registration statement
         providing for the registration of the offering of the Underlying Shares
         until the earlier of the expiration date of the Warrants and the date
         upon which all such Warrants have been exercised.

(g)      COMPLIANCE AND SECURITIES REGULATIONS AND COMMISSIONS REQUESTS. During
         the period of the distribution of the Units, the Company will notify
         the Underwriters promptly, and confirm the notice in writing, (i) when
         any post-effective amendment to the Registration Statement or Warrant
         Registration Statement shall have been filed with the Commission or
         shall have become effective, and when any supplement to the U.S.
         Warrant Prospectus or the Canadian Warrant Prospectus or any amended
         U.S. Prospectus, U.S. Warrant Prospectus, Canadian Prospectus or
         Canadian Warrant Prospectus or any Supplementary Material shall have
         been filed; (ii) of any request by any Qualifying Authority to amend or
         supplement the Canadian Preliminary Prospectus, the Canadian
         Preliminary Warrant



                                       8
<Page>

         Prospectus, the Canadian Prospectus or the Canadian Warrant Prospectus
         or for additional information or of any request by the Commission to
         amend the Registration Statement or the Warrant Registration Statement
         or to amend or supplement the U.S. Prospectus or the U.S. Warrant
         Prospectus or for additional information, (iii) of the issuance by the
         Commission of any stop order suspending the effectiveness of the
         Registration Statement or the Warrant Registration Statement or of any
         order preventing or suspending the use of any of the U.S. Preliminary
         Prospectus, Canadian Preliminary Prospectus, the U.S. Preliminary
         Warrant Prospectus, the Canadian Preliminary Warrant Prospectus, the
         U.S. Prospectus, Canadian Prospectus, the U.S. Warrant Prospectus or
         the Canadian Warrant Prospectus, or of the suspension of the
         qualification of the Units or Underlying Shares for offering or sale in
         any jurisdiction, or of the institution or, to the knowledge of the
         Company, threatening of any proceedings for any such purpose, and (iv)
         of the issuance by any Qualifying Authority or any stock exchange of
         any order having the effect of ceasing or suspending the distribution
         of the Units or the Underlying Shares or the trading in the Common
         Shares or Warrants, or of the institution or, to the knowledge of the
         Company, threatening of any proceedings for any such purpose. The
         Company will use every reasonable effort to prevent the issuance of any
         such stop order or of any order preventing or suspending such use or
         such order ceasing or suspending the distribution of the Units or the
         Underlying Shares or the trading in the Common Shares or Warrants and,
         if any such order is issued, to obtain the lifting thereof at the
         earliest possible time.

(h)      FILING OF AMENDMENTS. The Company will not at any time file or make any
         amendment or supplement to the Registration Statement, the U.S.
         Prospectus or the Canadian Prospectus, or any Supplementary Material,
         of which the Representatives shall not have previously been advised and
         furnished a copy or to which the Representatives shall have objected
         promptly after reasonable notice thereof.

(i)      DELIVERY OF FILED DOCUMENTS. The Company has furnished or will deliver
         to each of the Underwriters a copy of the Canadian Preliminary
         Prospectus, the Canadian Prospectus, the Canadian Preliminary Warrant
         Prospectus, the Final Warrant Prospectus, the Canadian Warrant
         Prospectus and any Supplementary Material, approved, signed and
         certified as required by Canadian Securities Laws and signed and
         conformed copies of each of the Registration Statement and Warrant
         Registration Statement as originally filed and of each amendment
         thereto (including exhibits filed therewith or incorporated by
         reference therein) and signed copies of all consents and certificates
         of experts.

(j)      DELIVERY OF PROSPECTUSES. The Company has furnished or will deliver to
         each Underwriter, without charge, as many copies of each U.S.
         Preliminary Prospectus and Canadian Preliminary Prospectus as such
         Underwriters have reasonably requested, and the Company hereby consents
         to the use of such copies for the purposes permitted by the 1933 Act.
         The Company will deliver to each Underwriter, without charge, during
         the period when the U.S. Prospectus is required to be delivered under
         the 1933 Act or the 1934 Act and during the period when the Canadian
         Prospectus is required to be delivered under Canadian Securities Laws,
         but no later than the second Business Day after the Final



                                       9
<Page>

         Filing Time, such number of copies of the U.S. Prospectus and Canadian
         Prospectus, respectively (each as supplemented or amended) as such
         Underwriter may reasonably request. The Company will deliver to the
         Warrant Trustee as many copies of the U.S. Warrant Prospectus as the
         Warrant Trustee requests to allow the Warrant Trustee to deliver a copy
         of the U.S. Warrant Prospectus to each holder of Warrants who exercises
         such Warrants.

(k)      CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply with
         the 1933 Act, 1933 Act Regulations and Canadian Securities Laws so as
         to permit the completion of the distribution of the Units and
         Underlying Shares as contemplated in this agreement and in the U.S.
         Prospectus and the Canadian Prospectus. If at any time when a
         prospectus is required by the 1933 Act to be delivered in connection
         with sales of the Units, any event shall occur or condition shall exist
         as a result of which it is necessary, in the opinion of counsel for the
         Underwriters or for the Company, to amend the Registration Statement or
         amend or supplement the U.S. Prospectus or the Canadian Prospectus in
         order that the U.S. Prospectus or the Canadian Prospectus will not
         include any untrue statements of a material fact or omit to state a
         material fact necessary in order to make the statements therein not
         misleading in the light of the circumstances existing at the time it is
         delivered to a purchaser, or if it shall be necessary, in the opinion
         of such counsel, at any such time to amend the Registration Statement
         or amend or supplement the U.S. Prospectus or the Canadian Prospectus
         in order to comply with the requirements of the 1933 Act, 1933 Act
         Regulations or Canadian Securities Laws, the Company will promptly
         prepare and file with the Commission and with the Qualifying
         Authorities, subject to paragraph 1(h) of this agreement, such
         amendment or supplement as may be necessary to correct such statement
         or omission or to make the Registration Statement or the U.S.
         Prospectus or the Canadian Prospectus, as the case may be, comply with
         such requirements, and the Company will furnish to the Underwriters
         such number of copies of such amendment or supplement as the
         Underwriters may reasonably request.

(l)      RULE 158. The Company will file, on a timely basis, such reports
         pursuant to the 1934 Act as are necessary in order to make generally
         available to its securityholders as soon as practicable an earnings
         statement for the purposes of, and to provide the benefits contemplated
         by, the last paragraph of Section 11(a) of the 1933 Act and the
         regulations thereunder.

(m)      USE OF PROCEEDS. The Company will use the net proceeds received by it
         from the sale of the Units in the manner specified in the U.S.
         Prospectus and the Canadian Prospectus under "Use of Proceeds".

(n)      RESTRICTION ON SALE OF SECURITIES. During a period of 90 days from the
         date of the U.S. Prospectus, the Company will not, without the prior
         written consent of each of TD Securities Inc. and Merrill Lynch Canada
         Inc. (i) directly or indirectly, offer, pledge, sell, contract to sell,
         sell any option or contract to purchase, purchase any option or
         contract to sell, grant any option, right or warrant to purchase or
         otherwise transfer or dispose of any Common Shares or any securities
         convertible into or exercisable or exchangeable for



                                       10
<Page>

         Common Shares or file any registration statement under the 1933 Act
         with respect to any of the foregoing (ii) enter into any swap or any
         other agreement or in respect of the foregoing, any transaction that
         transfers, in whole or in part, directly or indirectly, the economic
         consequence of ownership of the Common Shares, whether any such swap or
         transaction described in clause (i) or (ii) above is to be settled by
         delivery of Common Shares or such other securities, in cash or
         otherwise or (iii) publicly announce an intention to do any of the
         foregoing. The foregoing sentence shall not apply to (A) the Warrants,
         the Underlying Shares and the Shares to be sold hereunder, (B) any
         Common Shares issued or options to purchase Common Shares granted
         pursuant to existing employee plans of the Company referred to in the
         U.S. Prospectus and the Canadian Prospectus, (C) any Common Shares
         issued in connection with the rights described in the U.S. Prospectus
         and the Canadian Prospectus, (D) any Common Shares issued pursuant to
         any non-employee director stock plan or dividend reinvestment plan, (E)
         Common Shares issuable upon the conversion of any of the Company's
         outstanding Convertible Debentures due 2012, (F) any Common Shares
         issued in connection with "flow-through financings" by the Company in
         an amount up to C$4 million, or (G) any securities issuable 30 days
         after the date of the U.S. Prospectus pursuant to an acquisition,
         merger, consolidation or amalgamation transaction involving the
         Company.

(o)      LISTING. The Company will use its best efforts to effect the listing of
         the Shares and the Underlying Shares on the TSX and the NYSE and the
         Warrants on the TSX and will use reasonable efforts to effect the
         listing of the Warrants on the NASDAQ.

(p)      REPORTING REQUIREMENTS. The Company, during the period when the U.S.
         Prospectus or the U.S. Warrant Prospectus, as applicable, is required
         to be delivered under the 1933 Act or the 1934 Act in respect of the
         offer and sale of the Units or the Underlying Shares, will file all
         documents required to be filed by the Company with the Commission
         pursuant to the 1934 Act within the time periods required by the 1934
         Act and the rules and regulations of the Commission thereunder.

(q)      DELIVERY OF DOCUMENTS AT THE TIME OF FILING OF CANADIAN PROSPECTUS. The
         Company shall deliver to the Underwriters contemporaneously with or
         prior to the filing of the Canadian Prospectus with the Qualifying
         Authorities:

         (i)      the comfort letter of its auditors, Ernst & Young LLP,
                  referred to in paragraph 5(h) of this agreement;

         (ii)     an opinion of its auditors, Ernst & Young LLP, addressed to
                  the Underwriters, in form and substance satisfactory to the
                  Underwriters and their counsel, to the effect that the French
                  language version of the Financial Information is, in all
                  material respects, a complete and accurate translation of the
                  English language version thereof;

         (iii)    an opinion of Quebec counsel to the Company addressed to the
                  Underwriters, in form and substance satisfactory to the
                  Underwriters and their counsel, to the effect


                                       12
<Page>

                  that, except for the Financial Information, as to which they
                  express no opinion, the French language version of each of the
                  Canadian Preliminary Prospectus and the Canadian Prospectus,
                  is, in all material respects, a complete and accurate
                  translation of the English version of each of the Canadian
                  Preliminary Prospectus and the Canadian Prospectus,
                  respectively;

         (iv)     letters from the TSX advising the Company that approval of the
                  conditional listing of (A) the Shares issuable pursuant to the
                  Firm Units and the Optional Units, including the Underlying
                  Shares, and (B) the Warrants has been granted by the TSX;

         (v)      application to the NYSE with respect to the listing of the
                  Shares issuable pursuant to the Firm Units and the Optional
                  Units, including the Underlying Shares; and

         (vi) application to NASDAQ with respect to the listing of the Warrants.

(r)      SUPPLEMENTARY MATERIAL. The Company shall deliver to the Underwriters
         contemporaneously with or prior to the filing of any Supplementary
         Material with any Qualifying Authority or the Commission a comfort
         letter from Ernst & Young LLP relating to the Supplementary Material in
         the form and substance of the comfort letter described in subparagraph
         1(q)(i) of this agreement. The Company shall deliver to the
         Underwriters contemporaneously with or prior to the filing of any
         Supplementary Material with the Commission des valeurs mobilieres du
         Quebec opinions relating to the Supplementary Material in the form and
         substance of the opinions described in subparagraphs 1(q)(ii) and (iii)
         of this agreement.

(s)      CHANGES. From the date of this agreement until the end of the period of
         Distribution under the Canadian Prospectus and the U.S. Prospectus, the
         Company shall promptly notify the Underwriters in writing of:

         (i)      any material change (actual, anticipated, contemplated or
                  threatened, financial or otherwise) in the condition,
                  financial or otherwise, or in the earnings, business affairs
                  or business prospects of the Company and its subsidiaries
                  considered as one enterprise whether or not arising in the
                  ordinary course of business;

         (ii)     any change in any fact contained in the Registration
                  Statement, the Canadian Prospectus, the U.S. Prospectus or
                  Supplementary Material, which change is or may be of such a
                  nature as to render the Registration Statement, the Canadian
                  Prospectus, the U.S. Prospectus or Supplementary Material
                  misleading or untrue in any material respect or result in a
                  misrepresentation therein; or

         (iii)    any change in applicable laws, materially and adversely
                  affecting, or which may materially and adversely affect, the
                  earnings, business affairs or business prospects of the
                  Company and its subsidiaries considered as one enterprise, the
                  Common Shares or the Distribution under the Canadian
                  Prospectus or the U.S. Prospectus.



                                       12
<Page>

(t)      WARRANT TRUSTEE. The Warrant Trustee will be duly appointed to act as
         trustee under the Warrant Indenture.

         SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Underwriters as of the date hereof and as of each
Closing Time and agrees with each Underwriter as follows:

(a)      COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
         general eligibility requirements for use of a short form prospectus
         under National Instrument 44-101, for use of a shelf prospectus under
         National Instrument 44-102 and for use of Form F-10 under the 1933 Act.
         At the time the Registration Statement becomes effective under the 1933
         Act and at all times subsequent thereto up to any Closing Time: (A) the
         Canadian Prospectus will comply in all material respects with Canadian
         Securities Laws as interpreted and applied by the Qualifying
         Authorities (B) the U.S. Prospectus will conform to the Canadian
         Prospectus, except for such deletions therefrom and additions thereto
         as are permitted or required by Form F-10 and the applicable rules and
         regulations of the Commission; (C) the Registration Statement, and any
         amendments or supplements thereto will comply in all material aspects
         with the requirements of the 1933 Act and the 1933 Act Regulations; (D)
         none of the Registration Statement, or any amendment or supplement
         thereto will contain an untrue statement of a material fact or omit to
         state a material fact required to be stated therein or necessary to
         make the statements therein not misleading; and (E) each of the U.S.
         Prospectus, the Canadian Prospectus, and any Supplementary Material or
         any amendment or supplement thereto will constitute full, true and
         plain disclosure of all material facts relating to the Company and its
         subsidiaries, considered as one enterprise, and the Units, and will not
         include an untrue statement of a material fact or omit to state a
         material fact necessary in order to make the statements therein, in the
         light of the circumstances under which they were made, not misleading,
         except that the representations and warranties contained in clauses (D)
         and (E) above do not apply to statements or omissions made in reliance
         upon and in conformity with information furnished in writing to the
         Company by any Underwriter expressly for use in the Registration
         Statement, the U.S. Prospectus, the Canadian Prospectus and any
         Supplementary Material.

(b)      At the time the Warrant Registration Statement becomes effective under
         the 1933 Act: (A) the Canadian Warrant Prospectus will comply in all
         material respects with Canadian Securities Laws as interpreted and
         applied by the Qualifying Authorities (B) the U.S. Warrant Prospectus
         will conform to the Canadian Warrant Prospectus, except for such
         deletions therefrom and additions thereto as are permitted or required
         by Form F-10 and the applicable rules and regulations of the
         Commission; (C) the Warrant Registration Statement, and any amendments
         or supplements thereto will comply in all material aspects with the
         requirements of the 1933 Act and the 1933 Act Regulations; (D) none of
         the Warrant Registration Statement, or any amendment or supplement
         thereto will contain an untrue statement of a material fact or omit to
         state a material fact required to be stated therein or necessary to
         make the statements therein not misleading; and (E) each of the U.S.
         Warrant Prospectus, the Canadian Warrant Prospectus, and any
         Supplementary



                                       13
<Page>

         Material or any amendment or supplement thereto will constitute full,
         true and plain disclosure of all material facts relating to the Company
         and its subsidiaries, considered as one enterprise, and the Underlying
         Shares, and will not include an untrue statement of a material fact or
         omit to state a material fact necessary in order to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading.

(c)      INDEPENDENT ACCOUNTANTS. The accountants who reported on and certified
         the financial statements included or incorporated by reference in the
         Registration Statement, the Warrant Registration Statement, the U.S.
         Prospectus, the U.S. Warrant Prospectus, the Canadian Prospectus and
         the Canadian Warrant Prospectus, are independent public accountants as
         required by the 1933 Act and the 1933 Act Regulations and are
         independent with respect to the Company within the meaning of the
         BUSINESS CORPORATIONS ACT (Ontario) and applicable Canadian Securities
         Laws.

(d)      GOOD STANDING OF THE COMPANY. The Company is a corporation duly
         amalgamated, validly existing under the laws of the Province of Ontario
         and has filed its annual return under the CORPORATIONS INFORMATION ACT
         (Ontario) (the "CIA")) for the most recent year in which it was
         required to file such return and has the corporate power and authority
         to own, lease and operate its properties and to conduct its business as
         described in the Canadian Prospectus, and the U.S. Prospectus and to
         enter into, deliver and perform its obligations under this agreement;
         and the Company is duly qualified as an extra-provincial corporation to
         transact business and is in good standing (in respect of the filing of
         annual returns where required or other information filings under
         applicable corporations information legislation) in each jurisdiction
         in which such qualification is required, whether by reason of the
         ownership or leasing of property or the conduct of business, except
         where the failure so to qualify or to be in good standing would not
         result in a Material Adverse Effect.

(e)      GOOD STANDING BY SUBSIDIARIES. The Company's only consolidated
         subsidiaries are Sudbury Contact Mines Limited and Telbel Mines
         Limited. None of the Company's subsidiaries have assets in excess of 5%
         of the consolidated assets of the Company and its subsidiaries as of
         the date hereof or represented, for the 2001 fiscal year, revenues or
         operating cash flow in excess of 5% of consolidated revenues or
         consolidated operating cash flow of the Company and its subsidiaries
         for such period. The other information with respect to the subsidiaries
         set forth in Schedule A hereto is true and accurate in all material
         respects. Each subsidiary is a corporation duly incorporated, validly
         existing and has filed its annual return or other information filings
         under applicable corporations information legislation for the most
         recent year in which it was required to make such filing under the laws
         of the jurisdiction of its incorporation, has the requisite power and
         capacity to own, lease and operate its properties and to conduct its
         business as described in the Canadian Prospectus, and the U.S.
         Prospectus and is duly qualified as an extra-provincial or foreign
         corporation to transact business and is in good standing (in respect of
         the filing of annual returns where required or other information
         filings under applicable corporations information legislation) in each
         jurisdiction in which such qualification is required, whether by reason
         of the ownership or leasing of property or the conduct of



                                       14
<Page>

         business; all of the issued and outstanding shares of capital of each
         subsidiary have been duly authorized and validly issued, are fully paid
         and non-assessable and are owned by the Company directly or through
         subsidiaries, free and clear of any security interest, mortgage,
         pledge, lien, encumbrance, claim or equity; none of the outstanding
         shares of capital stock of any subsidiary were issued in violation of
         the preemptive or similar rights of any security holder of such
         subsidiary.

(f)      COMPLIANCE WITH CANADIAN SECURITIES LAWS. All consents, approvals,
         permits, authorizations or filings as may be required under Canadian
         Securities Laws (including with respect to the filing of the Canadian
         Prospectus and the Form 20-F) and the by-laws, rules and regulations of
         the Exchanges necessary to the execution and delivery of and the
         performance by the Company of its obligations under this agreement have
         been made and obtained or will have been obtained by the Closing Time.

(g)      FINANCIAL STATEMENTS. The financial statements included or incorporated
         by reference in the Canadian Preliminary Prospectus and U.S.
         Preliminary Prospectus and to be included or incorporated by reference
         in the Registration Statement and the Canadian Prospectus and notes
         thereto, present fairly the financial position of the Company and its
         consolidated subsidiaries at the dates indicated; and the statements of
         operations, retained earnings, cash flow from operations and changes in
         financial information of the Company and its consolidated subsidiaries
         for the periods specified in such financial statements have been
         prepared in conformity with generally accepted accounting principles in
         Canada ("Canadian GAAP") applied on a consistent basis throughout the
         periods involved and have been either (A) reconciled to generally
         accepted accounting principles in the United States of America ("U.S.
         GAAP") in accordance with applicable U.S. securities laws or (B)
         prepared and presented in conformity with U.S. GAAP. The selected
         financial information to be included or incorporated by reference in
         the Registration Statement and the Canadian Prospectus present fairly
         the information shown therein and have been compiled on a basis
         consistent with that of the audited financial statements included in
         the Registration Statement and the Canadian Prospectus.

(h)      NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the dates as of which
         information is given in the Canadian Preliminary Prospectus and the
         U.S. Preliminary Prospectus, except as otherwise stated therein, (A)
         there has been no material adverse change in the condition,
         financial or otherwise, or in the earnings, business affairs or
         business prospects of the Company and its subsidiaries considered as
         one enterprise, whether or not arising in the ordinary course of
         business (a "Material Adverse Effect"), (B) there have been no
         transactions entered into by the Company or any of its subsidiaries,
         other than those in the ordinary course of business, which are
         material with respect to the Company and its subsidiaries considered
         as one enterprise, and (C) except for regular annual dividends on
         the Common Shares in amounts per share that are consistent with past
         practice, there has been no dividend or distribution of any kind
         declared, paid or made by the Company on any class of its share
         capital.

(i)      ABSENCE OF RIGHTS. Except as disclosed in the Canadian Preliminary
         Prospectus as at the



                                       15
<Page>

         date thereof and as will be disclosed in the Canadian Prospectus and
         the U.S. Prospectus, no person has any right, agreement or option,
         present or future, contingent or absolute, or any right capable of
         becoming a right, agreement or option, for the issue or allotment of
         any unissued shares of the Company or any other agreement or option,
         for the issue or allotment of any unissued shares of the Company or any
         other security convertible into or exchangeable for any such shares or
         to require the Company to purchase, redeem or otherwise acquire any of
         the issued and outstanding shares of the Company.

(j)      ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding, inquiry
         or investigation before or brought by any court or governmental agency,
         governmental instrumentality or body, domestic or foreign, now pending
         or, to the knowledge of the Company, threatened, against or affecting
         the Company or any subsidiary, which is required to be disclosed in the
         Canadian Preliminary Prospectus the U.S. Preliminary Prospectus, the
         Canadian Prospectus, the U.S. Prospectus or the Supplementary Material
         and which is not so disclosed or will not be so disclosed, or which may
         reasonably be expected to result in a Material Adverse Effect, or which
         may reasonably be expected to materially and adversely affect the
         properties or assets of the Company or any subsidiary or which may
         materially and adversely affect the consummation of the transactions
         contemplated in this agreement or the performance by the Company of its
         obligations hereunder; the aggregate of all pending legal or
         governmental proceedings to which the Company or any subsidiary is a
         party or of which any of their respective property or assets is the
         subject which are not described in the Canadian Preliminary Prospectus,
         the U.S. Preliminary Prospectus or the Supplementary Material including
         ordinary routine litigation incidental to the business, could not
         reasonably be expected to result in a Material Adverse Effect.

(k)      AUTHORIZATION. This agreement has been, and the Warrant Indenture, when
         delivered will have been duly authorized, executed and delivered by the
         Company and each of the foregoing constitutes or will constitute a
         valid and binding obligation of the Company enforceable against the
         Company in accordance with its terms, except as enforcement thereof may
         be limited by bankruptcy, insolvency, reorganization, moratorium and
         other laws relating to or affecting the rights of creditors generally
         and except as limited by the application of equitable principles when
         equitable remedies are sought, and by the fact that rights to
         indemnity, contribution and waiver, and the ability to sever
         unenforceable terms, may be limited by applicable law.

(l)      AUTHORIZED CAPITAL. The authorized, issued and outstanding share
         capital of the Company was, at October 29, 2002 and September 30, 2002,
         as set forth in the Canadian Preliminary Prospectus and the U.S.
         Preliminary Prospectus under the captions "Description of Share
         Capital" and "Capitalization", respectively. All of the issued and
         outstanding shares in the capital of the Company have been duly
         authorized and validly issued and are fully paid and non-assessable.
         None of the outstanding shares in the capital of the Company was issued
         in violation of the pre-emptive rights of any securityholder of the
         Company.

(m)      REPORTING ISSUER STATUS. The Company is a reporting issuer not in
         default for purposes of



                                       16
<Page>

         the SECURITIES ACT (Ontario) and the corresponding provisions of the
         other Canadian Securities Laws in jurisdictions which recognize the
         concept of reporting issuer status.

(n)      AUTHORIZATION AND DESCRIPTION OF SHARES, WARRANTS AND UNDERLYING
         SHARES. The Shares and Warrants have been duly authorized for issuance
         and sale to the Underwriters pursuant to this agreement. The Underlying
         Shares have been duly authorized for issuance to holders of Warrants
         upon the exercise of such Warrants in accordance with their terms. Each
         of the Shares, Warrants and Underlying Shares, when issued and
         delivered by the Company pursuant to this agreement against payment of
         the consideration set forth herein, will be validly issued and fully
         paid and non-assessable; the Common Shares and Warrants conform to all
         statements relating thereto contained in the Canadian Prospectus and
         the U.S. Prospectus and such description conforms to the rights set
         forth in the instruments defining the same; no holder of the Shares,
         Warrants or Underlying Shares will be subject to personal liability
         solely by reason of being such a holder; the issuance of the Shares,
         Underlying Shares or Warrants is not subject to the preemptive rights
         of any shareholder of the Company; and all corporate action required to
         be taken for the authorization, issuance, sale and delivery of the
         Shares, Underlying Shares and the Warrants has been validly taken.

(o)      ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any of its
         subsidiaries is in violation of its charter or by-laws or in default in
         the performance or observance of any obligation, agreement, covenant or
         condition contained in any contract, indenture, mortgage, deed of
         trust, loan or credit agreement, note, lease, license or other
         agreement or instrument to which the Company or any of its subsidiaries
         is a party or by which it or any of them may be bound, or to which any
         of the property or assets of the Company or any subsidiary is subject
         (collectively, "Agreements and Instruments") except for such defaults
         that would not result in a Material Adverse Effect. The execution,
         delivery and performance of this agreement, the Warrant Indenture and
         the consummation of the transactions contemplated herein and in the
         Canadian Preliminary Prospectus and U.S. Preliminary Prospectus, and as
         will be contemplated in the Canadian Prospectus and the U.S. Prospectus
         (including the authorization, issuance, sale and delivery of the
         Shares, Underlying Shares and Warrants and the use of the proceeds from
         the sale of the Units as described in the Canadian Prospectus and the
         U.S. Prospectus under the caption "Use of Proceeds") and compliance by
         the Company with its obligations hereunder have been duly authorized by
         all necessary corporate action and do not and will not, whether with or
         without the giving of notice or passage of time or both, conflict with
         or constitute a breach of, or default or Repayment Event (as defined
         below) under, or result in the creation or imposition of any lien,
         charge or encumbrance upon any property or assets of the Company or any
         subsidiary pursuant to, the Agreements and Instruments (except for such
         conflicts, breaches or defaults or liens, charges or encumbrances that
         would not result in a Material Adverse Effect), nor will such action
         result in any violation or conflict with the provisions of the charter
         or by-laws of the Company or any subsidiary or any existing applicable
         law, statute, rule, regulation, judgment, order, writ or decree of any
         government, government instrumentality or court, domestic or foreign,
         having jurisdiction over the Company or any subsidiary or any of their
         assets, properties or

                                       17
<Page>

         operations except for such violations or conflicts that would not,
         singly or in the aggregate, result in a Material Adverse Effect. As
         used herein, a "Repayment Event" means any event or condition which
         gives the holder of any note, debenture or other evidence of
         indebtedness (or any person acting on such holder's behalf) the right
         to acquire the repurchase, redemption or repayment of all or a portion
         of such indebtedness by the Company or any subsidiary.

(p)      ABSENCE OF LABOUR DISPUTE. No labour dispute with the employees of the
         Company or any subsidiary exists or, to the knowledge of the Company,
         is imminent, and the Company is not aware of any existing or imminent
         labour disturbance by the employees of any of its or any subsidiary's
         principal suppliers, manufacturers, customers or contractors, which, in
         either case, may reasonably be expected to result in a Material Adverse
         Effect.

(q)      TITLE TO PROPERTY. The Company and its subsidiaries have good and
         marketable title to all real property owned by the Company and its
         subsidiaries and good title to all other property described in the
         Canadian Preliminary Prospectus and U.S. Preliminary Prospectus in each
         case as at the date thereof and as will be described in the Canadian
         Prospectus and the U.S. Prospectus, in each case, free and clear of all
         mortgages, pledges, liens, security interests, claims, restrictions or
         encumbrances of any kind (including mining, zoning, use or building
         code restrictions that would prohibit or prevent the continued
         effective ownership, leasing, licensing or use of such property in the
         business of the Company and its subsidiaries) except such as (A) are
         described in the Canadian Prospectus and the U.S. Prospectus or (B) do
         not, singly or in the aggregate, materially affect the value of such
         property and do not interfere with the use made and proposed to be made
         of such property by the Company or any of its subsidiaries; and all of
         the leases, subleases, claims, concessions and agreements material to
         the business of the Company and its subsidiaries, considered as one
         enterprise, and under which the Company or any of its subsidiaries
         holds properties described in the Canadian Prospectus and the U.S.
         Prospectus, are in full force and effect, and neither the Company nor
         any subsidiary has any notice of any material claim of any sort that
         has been asserted by anyone adverse to the rights of the Company or any
         subsidiary under any of the leases, subleases, claims, concessions or
         agreements mentioned above, or affecting or questioning the rights of
         the Company or such subsidiary to the continued possession of the
         property under any such lease, sublease, claim, concession or
         agreement. The Company, either directly or indirectly, is the owner of
         the mining claims and mining leases necessary to carry on its current
         and proposed mining operations and its current and proposed exploration
         activities, all as set out or contemplated in the Canadian Prospectus
         and the U.S. Prospectus. The mining claims and mining leases held by
         the Company or its subsidiaries cover the properties required by the
         Company for such purposes. The Company is entitled to extract minerals
         from its mines as set forth in the Canadian Preliminary Prospectus and
         U.S. Preliminary Prospectus in each case as at the date thereof and as
         will be set forth in the Canadian Prospectus and the U.S. Prospectus
         and to do all of the exploration contemplated in the Canadian
         Prospectus and the U.S. Prospectus.



                                       18
<Page>

(r)      ENVIRONMENTAL LAWS. Except as described in the Canadian Preliminary
         Prospectus and U.S. Preliminary Prospectus in each case as at the date
         thereof and as will be described in the U.S. Prospectus and the
         Canadian Prospectus, and except as would not, singly or in the
         aggregate, result in a Material Adverse Effect, (A) neither the Company
         nor any of its subsidiaries is in violation of any federal, provincial,
         state, local, municipal or foreign statute, law, rule, regulation,
         ordinance, code, policy or rule of common law or any judicial or
         administrative interpretation thereof, including any judicial or
         administrative order, consent, decree or judgment, relating to
         pollution or protection of human health, the environment (including,
         without limitation, ambient air, surface water, groundwater, land
         surface or subsurface strata) or wildlife, including, without
         limitation, laws and regulations relating to the release or threatened
         release of chemicals, pollutants, contaminants, wastes, toxic
         substances, hazardous substances, petroleum or petroleum products
         (collectively, "Hazardous Materials") or to the manufacture,
         processing, distribution, use, treatment, storage, disposal, transport
         or handling of Hazardous Materials (collectively, "Environmental
         Laws"), (B) the Company and its subsidiaries have all permits,
         authorizations and approvals required under any applicable
         Environmental Laws and are each in compliance with their requirements,
         (C) there are no pending or threatened administrative, regulatory or
         judicial actions, suits, demands, demand letters, claims, liens,
         notices of noncompliance or violation, investigation or proceedings
         relating to any Environmental Laws against the Company or any of its
         subsidiaries and (D) there are no events or circumstances that might
         reasonably be expected to form the basis of an order for clean-up or
         remediation, or an action, suit or proceeding by any private party or
         governmental body or agency, against or affecting the Company or any of
         its subsidiaries relating to Hazardous Materials or any Environmental
         Laws.

(s)      NO STABILIZATION OR MANIPULATION. The Company has not taken and will
         not take, directly or indirectly, any action designed to, or that might
         be reasonably expected to, cause or result in stabilization or
         manipulation of the price of the Common Shares or the Warrants.

(t)      RESERVE INFORMATION. The information set forth in the Canadian
         Preliminary Prospectus and the U.S. Preliminary Prospectus and as will
         be set out in the Canadian Prospectus and the U.S. Prospectus relating
         to the estimates by the Company of the proven and probable ore reserves
         and mineral resources has been reviewed and verified by the Company
         and, in all cases, the ore reserve information has been prepared in
         accordance with Canadian industry standards set forth in National
         Instrument 43-101 - Standards of Disclosure for Mineral Projects and
         the method of estimating the ore reserves has been verified by mining
         experience and the information upon which the estimates of reserves
         were based, was, at the time of delivery thereof, complete and accurate
         in all material respects and there have been no material changes to
         such information since the date of delivery or preparation thereof.

(u)      ABSENCE OF FURTHER REQUIREMENTS. No filing with, or authorization,
         approval, consent, license, order, registration, qualification or
         decree of any court or governmental authority or agency is necessary or
         required for the performance by the Company of its obligations



                                       19
<Page>

         hereunder, in connection with the offering, issuance or sale of the
         Units hereunder or the consummation of the transactions contemplated by
         this agreement, except (A) such as have been already obtained or as may
         be required under the 1933 Act or the 1933 Act Regulations or state
         securities laws and (B) such as have been obtained, or as may be
         required, under Canadian Securities Laws.

(v)      POSSESSION OF LICENSES AND PERMITS. The Company and its subsidiaries
         possess such permits, certificates, licenses, approvals, consents and
         other authorizations (collectively, "Governmental Licenses") issued by
         the appropriate federal, provincial, state, local or foreign regulatory
         agencies or bodies necessary to own, lease, stake or maintain claims
         and other property interest and to conduct the business now operated by
         them, except where the failure to possess such Governmental Licenses
         would not singly or in the aggregate have a Material Adverse Effect;
         the Company and its subsidiaries are in compliance with the terms and
         conditions of all such Governmental Licenses, except where the failure
         so to comply would not, singly or in the aggregate, have a Material
         Adverse Effect; all of the Governmental Licenses are valid and in full
         force and effect, except where the invalidity of such Governmental
         Licenses or the failure of such Governmental Licenses to be in full
         force and effect would not have a Material Adverse Effect; and neither
         the Company nor any of its subsidiaries has received any notice of
         proceedings relating to the revocation or modification of any such
         Governmental Licenses which, singly or in the aggregate, if the subject
         of an unfavourable decision, ruling or finding, would result in a
         Material Adverse Effect.

(w)      INVESTMENT COMPANY ACT. The Company is not, and upon the issuance and
         sale of the Units as herein contemplated and the application of the net
         proceeds therefrom as will be described in the Canadian Prospectus and
         the U.S. Prospectus will not be, an "investment company" or an entity
         "controlled" by an "investment company" as such terms are defined in
         the Investment Company Act of 1940, as amended (the "1940 Act").

(x)      REGISTRATION RIGHTS. Other than pursuant to the Registration Rights
         Agreement dated as of February 15, 2002 between the Company and Scotia
         Capital Inc. relating to the registration of Common Shares issuable on
         the conversion of certain of the Company's convertible debentures due
         2012, there are no persons with registration rights or other similar
         rights to have any securities registered pursuant to the Registration
         Statement, the Warrant Registration Statement or otherwise registered
         by the Company under the 1933 Act.

(y)      OTHER REPORTS AND INFORMATION. There are no reports or information that
         in accordance with the requirements of any Qualifying Authority must be
         made publicly available in connection with the offering of the Units
         that have not been made or will not be made publicly available during
         the period of the distribution of the Units as required; there are no
         documents required to be filed with any Qualifying Authority in
         connection with the Canadian Prospectus or the Canadian Warrant
         Prospectus that have not been filed or will not be filed as required;
         during the period of the distribution of the Units there are no
         contracts, documents or other materials required to be described or
         referred to in the



                                       20
<Page>

         Registration Statement, Warrant Registration Statement or the U.S.
         Prospectus or U.S. Warrant Prospectus or to be filed as exhibits to the
         Registration Statement or U.S. Warrant Registration Statement that are
         not or will not be described, referred to or filed as required by U.S.
         federal securities laws and the Canadian Securities Laws.

(z)      NO BROKER. Other than as contemplated by this agreement, there is no
         broker, finder or other party that is entitled to receive from the
         Company any brokerage or finder's fee or other fee or commission as a
         result of any of the transactions contemplated by this agreement.

(aa)     STAMP TAX. No stamp duty, registration or documentary taxes, duties or
         similar charges are payable under the federal laws of Canada or the
         laws of the Province of Ontario in connection with the creation,
         issuance, sale and delivery to the Underwriters of the Units or the
         authorization, execution, delivery and performance of this agreement or
         the resale of Units by an Underwriter to U.S. residents.

         SECTION 3. COMPENSATION OF UNDERWRITERS. In return for their
underwriting services in respect of the distribution of the Units, including (i)
acting as financial advisers to the Company, (ii) assisting in the preparation
of the Canadian Prospectus and the U.S. Prospectus (and Supplementary Material),
(iii) advising on the final terms and conditions of the offering, (iv) forming
and managing a selling group for the sale of the Units, (v) distributing the
Units to the public both directly and through other registered dealers and
brokers, and (vi) performing administrative work in connection with the
distribution of the Units, the Company agrees to pay to the Underwriters at the
Closing Time, an underwriting commission of $0.8716 per Firm Unit sold or
expected to be sold in Canada and US$0.5560 per Firm Unit (being the equivalent
of the corresponding Canadian dollar amount based on the inverse of the Noon
Buying Rate) sold or expected to be sold in the United States and, to the extent
the Over-allotment Option is exercised, an underwriting commission of $0.8716
per Optional Unit sold in Canada and US$0.5560 per Optional Unit (being the
equivalent of the corresponding Canadian dollar amount based on the inverse of
the Noon Buying Rate) sold in the United States.

         SECTION 4. CLOSING.

         (a) PAYMENT OF THE PURCHASE PRICE. Payment of the purchase price for,
and delivery of certificates for, the Shares and Warrants issuable in respect of
the Firm Units shall be made at the offices of Davies Ward Phillips & Vineberg
LLP, 1 First Canadian Place, Suite 4400, Toronto, Ontario, or at such other
place as shall be agreed upon by the Representatives and the Company, at the
Closing Time.

         In addition, in the event that any of the Optional Units are purchased
by the Underwriters, payment of the purchase price for, and delivery of
certificates for, the Shares and Warrants issuable in respect of such Optional
Units shall be made at the above-mentioned offices, or at such other place as
shall be agreed upon by the Representatives and the Company, on each Closing
Date as specified in the notice from the Representatives to the Company;
provided that the purchase price per Optional Unit shall be reduced by an amount
per share equal



                                       21
<Page>

to any dividends or distributions declared by the Company and
payable on the Firm Units but not payable on the Optional Units.

         Payment in respect of the purchase price for Units sold in Canada shall
be denominated in Canadian dollars and in respect of the purchase price for
Units sold in the United States shall be denominated in United States dollars
and shall be made to the Company by separate wire transfers of immediately
available funds to a bank account designated by the Company not less than 24
hours prior to the Closing Time or by separate bank drafts or certified cheques,
against delivery to the Representatives for the respective accounts of the
Underwriters of certificates for the Shares and Warrants to be purchased by
them. It is understood that each Underwriter has authorized either of the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Firm Units and the Optional Units, if
any, which it has agreed to purchase.

         (b) PAYMENT OF UNDERWRITING COMMISSION. At the Closing Time, the
Company shall contemporaneously pay to the Underwriters the underwriting
commission referred to in Section 3 of this agreement, which underwriting
commission shall be deducted from and set off against the purchase price payable
to the Company by the Underwriters for the Units. The Representatives shall at
the Closing Time provide the Company with a receipt acknowledging payment in
full of the applicable amount of the underwriting commission.

         (c) DENOMINATIONS; REGISTRATION. Certificates for the Shares and
Warrants issuable in respect of the Firm Units and the Optional Units, if any,
shall be in such denominations and registered in such names as the
Representatives may request in writing at least two full business days before
any Closing Time. The Shares and Warrants comprising the Firm Units and the
Optional Units, if any, will be made available for examination and packaging by
the Representatives in The City of New York or the City of Toronto, as
determined by the Representatives, not later than 10:00 a.m. (Toronto time) on
the Business Day prior to the Closing Time.

         SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase the Firm Units and, to the extent the
Over-allotment Option is exercised, the Optional Units, hereunder are subject to
the accuracy of the representations and warranties of the Company contained in
Section 2 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:

         (a) EFFECTIVENESS OF REGISTRATION STATEMENT AND WARRANT REGISTRATION
STATEMENT. (i) The Final Prospectus shall have been filed with the Qualifying
Authorities and the Decision Document in respect thereof shall have been
obtained under Canadian Securities Laws and the Registration Statement, and any
amendment thereto, shall have become effective in each case no later than the
Final Filing Time; (ii) the Final Warrant Prospectus shall have been filed with
the Reviewing Authority and the Warrant Decision Document in respect thereof
shall have been obtained under Canadian Securities Laws and the Warrant
Registration Statement shall have



                                       22
<Page>

been filed with the Commission and the Warrant Registration Statement, and any
amendment thereto, shall have become effective no later than the Business Day
prior to the Closing Date and a supplement in respect of the distribution of the
Underlying Shares shall have been filed with the Reviewing Authority and with
the Commission pursuant to General Instruction II.L of Form F-10 under the 1933
Act within the applicable time period prescribed for filing and no later than
the Business Day prior to the Closing Date; (iii) no stop order suspending the
effectiveness of the Registration Statement or the Warrant Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, no order having the effect of ceasing
or suspending the distribution of the Shares, Warrants or the Underlying Shares
or the trading in the Common Shares or Warrants of the Company or any other
securities of the Company shall have been issued or proceedings therefor
initiated or threatened by any securities commission, securities regulatory
authority or stock exchange in Canada or the United States, and any request on
the part of the Qualifying Authority or the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters.

          (b) OPINION OF CANADIAN COUNSEL FOR COMPANY. At Closing Time, the
Underwriters shall have received the favourable opinion, dated as of Closing
Time, of Davies Ward Phillips & Vineberg LLP, Canadian counsel for the Company,
in form and substance satisfactory to counsel for the Underwriters, to the
effect set forth in Schedule B hereto and to such further effect as counsel to
the Underwriters may reasonably request.

         (c) OPINION OF QUEBEC COUNSEL FOR COMPANY. At Closing Time, the
Underwriters shall have received the favourable opinion, dated as of Closing
Time, of Fraser Milner Casgrain LLP, Quebec counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect set forth
in Schedule C hereto and to such further effect as counsel to the Underwriters
may reasonably request, provided that for the purposes of the opinion in
paragraph 2 of Schedule C, the Mining Rights shall include all mining rights,
leases and concessions which are necessary for the Company to carry out its
current and proposed operations and exploration activities at the LaRonde
Division as described in the Canadian Prospectus and the U.S. Prospectus.

         (d) OPINION OF U.S. COUNSEL FOR COMPANY. At Closing Time, the
Underwriters shall have received the favourable opinion, dated as of Closing
Time, of Troutman Sanders LLP, United States counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters, to the effect set
forth in Schedule D hereto and to such further effect as counsel to the
Underwriters may reasonably request.

         (e) OPINION OF CANADIAN COUNSEL FOR UNDERWRITERS. At Closing Time, the
Underwriters shall have received the favourable opinion, dated as of Closing
Time, of Lang Michener, Canadian counsel for the Underwriters, with respect to
paragraphs 1, 9 (other than enforceability of this agreement) 13, 14 and 15 and
the second to last paragraph included in Schedule B hereto. In giving such
opinion, such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the laws of the Province of Ontario and the federal
laws of Canada applicable therein upon the opinions of counsel satisfactory to
the Underwriters and as to



                                       23
<Page>

matters pertaining to the Company upon the opinion of Davies Ward Phillips &
Vineberg LLP. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.

         (f) OPINION OF U.S. COUNSEL FOR UNDERWRITERS. At Closing Time, the
Underwriters shall have received the favourable opinion, dated as of Closing
Time, of Shearman & Sterling, United States counsel for the Underwriters, with
respect to the matters set forth in clauses 1, 2 and 5 and the second to last
paragraph included in Schedule D hereto, except that such counsel need not
comment on matters with respect to the Warrant Registration Statement, the U.S.
Warrant Prospectus, the Underlying Shares or the Warrant Form F-X. In giving
such opinion, such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of
the United States upon the opinions of counsel satisfactory to the Underwriters.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and certificates of public
officials.

         (g) OFFICERS' CERTIFICATE. At Closing Time the Underwriters shall have
received a certificate of the President and Chief Executive Officer and the
Vice-President and Chief Financial Officer of the Company, dated as of Closing
Time, to the effect that (i) there has been no Material Adverse Effect, (ii) the
representations and warranties in Section 2 hereof are true and correct with the
same force and effect as though expressly made at and as of Closing Time, (iii)
the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, (iv) the Mining
Rights referred to in the opinion of Quebec counsel to the Company contemplated
by paragraph 5(c) of this agreement include all mining rights, leases and
concessions which are necessary for the Company to carry out its current and
proposed operations and exploration activities at the LaRonde Division as
described in the Canadian Prospectus and the U.S. Prospectus, (v) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission, and (vi) no order having the effect of ceasing
or suspending the distribution of the Shares or Warrants or the Underlying
Shares shall have been issued by any securities commission or securities
regulatory authority in Canada.

         (h) ACCOUNTANTS' COMFORT LETTER. At the time of filing the Final
Canadian Prospectus, the Underwriters shall have received from Ernst & Young
LLP, a letter dated such date, in form and substance satisfactory to the
Underwriters, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement, the U.S. Prospectus and the Canadian Prospectus.

         (i) BRINGDOWN COMFORT LETTER. At Closing Time, the Underwriters shall
have received from Ernst & Young LLP, a letter dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to paragraph (h) of this Section, except that the specified date referred to
shall be a date not more than four business days prior to



                                       24
<Page>

Closing Time.

         (j) NO OBJECTION. The National Association of Securities Dealers, Inc.
shall have confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements in
connection with the offering of the Units or the Underlying Shares.

         (k) LOCK-UP AGREEMENTS. At the date of this agreement, the
Representatives, on behalf of the Underwriters, shall have received an agreement
substantially in the form set forth in Schedule F hereto, signed by the persons
listed on Schedule E hereto.

         (l) WARRANT INDENTURE. The Representatives, on behalf of the
Underwriters, shall have received the Warrant Indenture duly executed by the
Company and the Warrant Trustee.

         (m) APPROVAL OF LISTING. At Closing Time, (i) the Shares, Underlying
Shares and Warrants shall have been approved for listing on the TSX, subject to
the Company fulfilling the requirements of the TSX, and (ii) the Shares and
Underlying Shares shall have been approved for listing on the NYSE, subject to
official notice of issuance if required, subject also to the requirement in the
case of the Warrants that a minimum number of holders of Warrants is met.

         (n) ADDITIONAL DOCUMENTS. At any Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and the
sale of the Units as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Units as herein contemplated shall
be satisfactory in form and substance to the Representatives and counsel for the
Underwriters, acting reasonably.

         SECTION 6.        TERMINATION OF AGREEMENT.

         (a) TERMINATION; GENERAL. In addition to the rights described in
paragraph 6(b) of the agreement, the Representatives may terminate this
agreement, by notice to the Company at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this agreement or since
the respective dates as of which information is given in the Canadian Prospectus
and the U.S. Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, the
Canadian or international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Underwriters impracticable to market the Units or to
enforce contracts for the sale of the Units or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission, any Qualifying Authority, any other securities commission or
securities regulatory



                                       25
<Page>

authority in Canada or the NYSE, the TSX or the Nasdaq National Market, or if
trading generally on the American Stock Exchange, NYSE, TSX, or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, any Qualifying Authority, any other securities commission or
securities regulatory authority in Canada, the National Association of
Securities Dealers, Inc. or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States or Canada, or (iv) if a banking
moratorium has been declared by United States federal, New York state or
Canadian federal authorities.

         (b) TERMINATION OF AGREEMENT. If any condition specified in Section 5
shall not have been fulfilled when and as required to be fulfilled, this
agreement, or in the case of any condition to the purchase of Optional Units,
the obligations of the several Underwriters to purchase the relevant Optional
Units, may be terminated by the Representatives by written notice to the Company
at any time at or prior to the applicable Closing Time.

         (c) LIABILITIES. If this agreement is terminated pursuant to this
Section 6, such termination shall be without liability of any party to any other
party except as provided in Section 10 hereof, and provided further that
Sections 2, 6, 7 and 8 shall survive such termination and remain full force and
effect.

         SECTION 7.  INDEMNITY.

         (a) INDEMNITY OF THE UNDERWRITERS. The Company agrees to indemnify and
save harmless each of the Underwriters and their directors, officers, employees
and agents and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from and
against all liabilities, claims, actions, suits, proceedings, losses (other than
loss of profits), costs, damages and expenses (including the reasonable fees and
expenses of the Underwriters' counsel that may be incurred with respect to or in
defending such claim) in any way caused by, or arising directly or indirectly
from or in consequence of:

                  (i)      any information or statement contained in (A) the
                           Registration Statement or the Warrant Registration
                           Statement which contains or is alleged to contain a
                           misrepresentation, or (B) the Canadian Prospectus,
                           Canadian Warrant Prospectus or the U.S. Prospectus,
                           the U.S. Warrant Prospectus or any Supplementary
                           Material, or in a certificate of the Company or any
                           officer of the Company delivered hereunder or
                           pursuant hereto which at the time, and in the light
                           of the circumstances under which it was made,
                           contains or is alleged to contain a
                           misrepresentation;

                  (ii)     any omission or alleged omission to state in (A) the
                           Registration Statement or the Warrant Registration
                           Statement, any material fact required to be stated
                           therein or necessary to make the statements therein
                           not misleading, or (B) the Canadian Prospectus, the
                           Canadian Warrant Prospectus or the



                                       26
<Page>

                           U.S. Prospectus, the U.S. Warrant Prospectus or any
                           Supplementary Material or any certificate of the
                           Company or any officer of the Company delivered
                           hereunder or pursuant hereto, any material fact,
                           required to be stated therein or necessary to make
                           the statements therein, in the light of the
                           circumstances under which they were made, not
                           misleading;

                  (iii)    any order made or enquiry, investigation or
                           proceedings commenced or threatened by any securities
                           commission, stock exchange or other competent
                           authority based upon any untrue statement or omission
                           or alleged untrue statement or alleged omission or
                           any misrepresentation or alleged misrepresentation in
                           the Registration Statement, the Warrant Registration
                           Statement, the Canadian Prospectus, the Canadian
                           Warrant Prospectus, the U.S. Prospectus, the U.S.
                           Warrant Prospectus or any Supplementary Material or
                           based upon any failure to comply with Canadian
                           Securities Laws or securities laws of the United
                           States (other than any failure or alleged failure to
                           comply by the Underwriters or their banking or
                           selling group), preventing or restricting the trading
                           in or the sale or Distribution of the Shares and
                           Warrants in any of the Qualifying Provinces or the
                           United States;

                  (iv)     the non-compliance or alleged non-compliance by the
                           Company with any requirement of Canadian Securities
                           Laws or applicable securities legislation of the
                           United States in connection with the transactions
                           herein contemplated including the Company's
                           non-compliance with any statutory requirement to make
                           any document available for inspection; and

                  (v)      a breach of any term of this agreement;

                  provided, however, that this indemnity shall not apply to any
                  liability, claim, action, suit, proceeding, loss, cost, damage
                  and expense to the extent arising out of any untrue statement
                  or omission or alleged untrue statement or omission made in
                  reliance upon and in conformity with written information
                  furnished to the Company by the Representatives expressly for
                  use in the Registration Statement, the U.S. Preliminary
                  Prospectus, the Canadian Preliminary Prospectus, the U.S.
                  Prospectus, the Canadian Prospectus or any Supplementary
                  Material.

         (b) INDEMNITY OF COMPANY, DIRECTORS AND OFFICERS. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement or the Canadian
Prospectus, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against all
liabilities, claims, actions, suits, proceedings, losses (other than loss of
profits), costs, damages and expenses (including the reasonable fees and
expenses of the Company counsel that may be incurred with respect to or in
defending such claim) in any way caused by, or arising directly or indirectly
from, in or consequence of the matters described in the indemnity contained in
subparagraph 7(a)(i), (ii) and (iii) of this agreement as incurred, but only
with respect to untrue



                                       27
<Page>

information or statements or omissions, or alleged untrue information or
statements or omissions, made in the Registration Statement, the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus, the U.S. Prospectus,
the Canadian Prospectus or any Supplementary Material in reliance upon and in
conformity with written information furnished to the Company by any
Representative expressly for use in the Registration Statement, the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus, the U.S. Prospectus,
the Canadian Prospectus or any Supplementary Material.

         (c) INDEMNITY INCLUSIONS. An Indemnifying Party's agreement to
indemnify an Indemnified Party under paragraphs 7(a) or (b) of this agreement
shall include, without limiting the generality thereof, the Company's agreement
to indemnify and save harmless an Indemnified Party in respect of:

                  (i)      all liabilities, claims, losses, costs, damages and
                           expenses whatsoever, as incurred, to the extent of
                           the aggregate amount paid in settlement of any
                           litigation, or any investigation or proceeding by any
                           governmental agency or body, commenced or threatened,
                           or of any claim whatsoever based upon any matter
                           referred to in paragraph 7(a) or (b) of this
                           agreement, provided that (subject to paragraph 7(g)
                           of this agreement) any such settlement is effected
                           with the prior written consent of the Company; and

                  (ii)     all expenses whatsoever, as incurred (including the
                           reasonable fees and disbursements of counsel chosen
                           by the Representatives), reasonably incurred in
                           investigating, preparing or defending against any
                           litigation, or any investigation or proceeding by any
                           governmental agency or body, commenced or threatened,
                           or any claim whatsoever based upon any matter
                           referred to in paragraph 7(a) or (b) of this
                           agreement.

         (d) RIGHTS HELD IN TRUST. To the extent that any Indemnified Party is
not a party to this agreement, the Underwriters (in the case of the indemnity in
paragraph 7(a)) of this agreement) and the Company (in the case of the indemnity
in paragraph 7(b)) of this agreement) shall obtain and hold the rights and
benefits of this Section 7 in trust for and on behalf of such Indemnified Party.

         (e) CONSENT TO SETTLEMENT. None of the Company and any of the
Underwriters shall agree to any settlement of any claim, action, suit or
proceeding referred to in this Section 7 unless the Company and each of the
Underwriters has consented in writing thereto.

         (f) NOTICE. Each Indemnified Party shall give notice as promptly as
reasonably practicable to each Indemnifying Party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an Indemnifying Party shall not relieve such Indemnifying Party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this Section 7. Counsel to the Indemnified
Parties shall be selected by the Representatives (in the case of the indemnity
in paragraph 7(a)) of this



                                       28
<Page>

agreement) and the Company (in the case of the indemnity in paragraph 7(b)) of
this agreement). An Indemnifying Party may participate at its own expense in the
defense of any such action, provided, however, that counsel to the Indemnifying
Party shall not (except with the consent of the Indemnified Party) also be
counsel to the Indemnified Party. In no event shall an Indemnifying Party be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from its own counsel for all Indemnified Parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.

         (g) SETTLEMENT WITHOUT CONSENT. If at any time any Indemnified Party
shall have requested an Indemnifying Party to reimburse the Indemnified Party
for fees and expenses of counsel, such Indemnifying Party agrees that it shall
be liable for any settlement of the nature contemplated by this Section 7
effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such Indemnifying Party of the aforesaid request,
(ii) such Indemnifying Party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into, and
(iii) such Indemnifying Party shall not have reimbursed such Indemnified Party
in accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
Indemnified Party shall have requested such Indemnifying Party to reimburse the
Indemnified Party for fees and expenses of counsel, such Indemnifying Party
shall not be liable for any settlement of the nature contemplated by this
Section 7 effected without its consent if such Indemnifying Party (i) reimburses
such Indemnified Party in accordance with such request to the extent it
considers such request to be reasonable and (ii) provides written notice to the
Indemnified Party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.

         SECTION 8. CONTRIBUTION. If the indemnification provided for in Section
7 hereof is for any reason unavailable to or insufficient to hold harmless an
Indemnified Party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such Indemnified Party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Units
pursuant to this agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.

         The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Units
pursuant to this agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Units pursuant to
this agreement (before deducting expenses) received by the Company and the total
underwriting commission received by the Underwriters, in each case as set forth
on the cover of the Canadian Prospectus and the U.S. Prospectus, bear to the
aggregate initial public offering price of the Units as set forth on such cover.



                                       29
<Page>

         The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

         The Company and Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by PRO RATA
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
Indemnified Party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such Indemnified
Party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

         In the event that the Company may be held to be entitled to
contribution from the Underwriters under the provisions of any statute or at
law, the Company shall be limited to contribution from each Underwriter
(severally and not jointly) in an amount not exceeding the lesser of:

         (i)      the portion of the full amount of the loss or liability giving
                  rise to such contribution for which such Underwriter is
                  responsible, as determined in accordance with the provisions
                  of this Section 8;

         (ii)     the amount of the aggregate underwriting commission actually
                  received by such Underwriter from the Company hereunder; and

         (iii)    the amount by which the total price at which the Units
                  underwritten by such Underwriter and distributed to the public
                  were offered to the public exceeds the amount of any damages
                  which such Underwriter has otherwise been required to pay by
                  reason of any such untrue or alleged untrue statement or
                  omission or alleged omission.

         No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

         For purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter and
each director of the Company, each officer of the Company who signed the
Registration Statement or the Canadian Prospectus, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20



                                       30
<Page>

of the 1934 Act shall have the same rights to contribution as the Company.
The Underwriters' respective obligations to contribute pursuant to this Section
8 are several in proportion to the number of Firm Units set forth opposite their
respective names in Section 11 of this agreement and not joint.

         SECTION 9. SEVERABILITY. If any provision of Sections 7 and 8 is
determined to be void or unenforceable in whole or in part, it shall be deemed
not to affect or impair the validity of any other provision of this agreement
and such void or unenforceable provision shall be severable from this agreement.

         SECTION 10. EXPENSES OF THE OFFERING. Whether or not the transactions
herein contemplated shall be completed, except as hereinafter specifically
provided, all expenses of or incidental to the authorization, allotment and
issue of the Units and Underlying Shares and all expenses of or incidental to
all other matters in connection with such transactions including, without
limitation, listing fees, expenses payable in connection with the qualification
of the Units and Underlying Shares for sale to the public, the fees and expenses
of counsel for the Company, all fees and expenses of local counsel, all fees and
expenses of the Company's auditors, all costs relating to information meetings
(including roadshow expenses), all filing and listing fees and all costs
incurred in connection with the preparation, printing and filing of the
Registration Statement, the Warrant Registration Statement (including financial
statements and exhibits and the Form F-X and Warrant Form F-X), Canadian
Preliminary Prospectus, Canadian Warrant Preliminary Prospectus, U.S. Warrant
Prospectus, U.S. Warrant Base Prospectus, Final Prospectus, Final Warrant
Prospectus, Canadian Prospectus, Canadian Warrant Prospectus, U.S. Prospectus,
U.S. Warrant Prospectus, Supplementary Material and share certificates
representing the Shares, certificates representing the Warrants, filing fees
incident to (including the reasonable fees and disbursements of counsel to the
Underwriters in connection with) the review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Units and the
Underlying Shares, fees and expenses of the transfer agent and registrar for the
Shares and Warrants and the Underlying Shares (but excluding the fees of the
Underwriters' and any out-of-pocket expenses of the Underwriters) shall be borne
by and be for the account of the Company, provided that if this agreement is
terminated in accordance with the provisions of subparagraph 6(a)(i) and
paragraph 6(b), the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.



                                       31
<Page>

         SECTION 11. UNDERWRITING PERCENTAGES. The obligation of the
Underwriters to purchase the Units at the Closing Time shall be several and not
joint and several and shall be limited to the percentages of the aggregate
number of Units set out opposite the name of each of the Underwriters below:

<Table>
                 <S>                                 <C>
                  TD Securities Inc.                  27.5%

                  Merrill Lynch Canada Inc.           27.5%

                  Scotia Capital Inc.                 12.5%

                  Yorkton Securities Inc.             12.5%

                  CIBC World Markets Inc.              6.0%

                  Salomon Smith Barney Canada Inc.     6.0%

                  Dundee Securities Corporation        4.0%

                  Sprott Securities Inc.               4.0%
</Table>

         In the event that any Underwriter shall fail to purchase its applicable
percentage of the Units (the "Defaulted Securities") at the Closing Time, the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Underwriters shall not have completed such arrangements
within such 24-hour period, then:

(a)      if the number of Defaulted Securities does not exceed 10% of the number
         of Units to be purchased hereunder, the non-defaulting Underwriters
         shall be obligated, each severally and not jointly, to purchase the
         full amount thereof in the proportions that their respective
         underwriting obligations hereunder bear to the underwriting obligation
         of all non-defaulting Underwriters, or

(b)      if the number of Defaulted Securities exceeds 10% of the number of
         Units to be purchased on such date, this agreement shall terminate
         without liability on the part of any non-defaulting Underwriter.

         No action taken pursuant to this Section 11 shall relieve any
defaulting Underwriter from liability in respect of its default to the Company
or to any non-defaulting Underwriter.

         In the event of any such default which does not result in a termination
of this agreement either the Underwriters or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement, the Canadian
Prospectus, the U.S. Prospectus or in any other documents or arrangements. As
used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 11.



                                       32
<Page>

         SECTION 12. AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER OF
IMMUNITIES. By the execution and delivery of this agreement, the Company (i)
acknowledges that it has, by separate written instrument, irrevocably designated
and appointed David J. Levenson (or any successor) (together with any successor,
the "Agent for Service"), as its authorized agent upon which process may be
served in any suit or proceeding arising out of or relating to this agreement or
the Common Shares and Warrants comprising the Units or the Underlying Shares,
that may be instituted in any federal or state court in the State of New York,
or brought under federal or state securities laws, and acknowledges that the
Agent for Service has accepted such designation, (ii) submits to the
jurisdiction of any such court in any such suit or proceeding, and (iii) agrees
that service of process upon the Agent for Service (or any successor) and
written notice of said service to the Company (mailed or delivered to its Chief
Financial Officer at its principal office in Toronto, Ontario, Canada), shall be
deemed in every respect effective service of process upon the Company in any
such suit or proceeding. The Company further agrees to take any and all action,
including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
the Agent for Service in full force and effect so long as any of the Underlying
Shares, Shares or Warrants shall be outstanding.

         To the extent that the Company has or hereafter may acquire any
immunity from the jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.

         SECTION 13. REMEDIES. The rights of termination contained in Section 6
are in addition to any other rights or remedies the Underwriters or any of them
may have in respect of any default, act or failure to act or non-compliance by
the Company in respect of any of the matters contemplated by this agreement.

         SECTION 14. SURVIVAL. All warranties, representations, covenants and
agreements herein contained or contained in any documents submitted pursuant to
this agreement and in connection with the transaction herein contemplated shall
survive the purchase and sale of the Units and continue in full force and effect
for the benefit of the Underwriters and shall not be limited or prejudiced by
any investigation made by or on behalf of the Underwriters in connection with
the purchase and sale of the Units or the preparation of the Registration
Statement, the Warrant Registration Statement, the Canadian Prospectus, the
Canadian Warrant Prospectus the U.S. Prospectus the U.S. Warrant Prospectus or
otherwise. This agreement shall constitute the entire agreement with respect to
the purchase of the Units among the parties.

         SECTION 15. TIME IS OF THE ESSENCE AND GOVERNING LAWS. Time shall be of
the essence of the agreement arising from this offer and its acceptance by the
Company and such agreement shall be governed and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.



                                       33
<Page>

         SECTION 16. NOTICES.

         (a) Unless herein otherwise expressly provided, any notice, request,
direction, consent, waiver, extension, agreement or other communication (a
"Communication") that is or may be given or made hereunder shall be in writing
addressed as follows:

         If to the Company, at:

                  Agnico-Eagle Mines Limited
                  145 King Street East, Suite 500
                  Toronto, Ontario
                  M5C 2Y7
                  Attention: David Garofalo
                  Fax No.: (416) 367-4681

         If to the Representatives or any or all of the Underwriters, addressed
and sent to:

                  TD Securities Inc.
                  66 Wellington Street W.
                  8th Floor, P.O. Box 1
                  TD Tower
                  Toronto, Ontario
                  M5X 1A2

                  Attention:  Peter F. Grosskopf

                  Fax No.: (416) 307-8458

         And to:

                  Merrill Lynch Canada Inc.
                  BCE Place
                  181 Bay Street
                  Toronto, Ontario
                  M5J 2V8

                  Attention:  Gregory Fournier

                  Fax No.: (416) 369-8778

         or to such other address as any of the parties may designate by notice
         given to the others in accordance with this subparagraph.

         (b) Each Communication shall be personally delivered to the addressee

                                       34
<Page>

or sent by facsimile transmission to the addressee and (a) a Communication which
is personally delivered shall, if delivered before 5:00 p.m. on a Business Day,
be deemed to be given and received on that day and, in any other case, be deemed
to be given and received on the first Business Day following the day on which it
is delivered; and (b) a Communication which is sent by telex, telegraph or
facsimile transmission shall, if sent on a Business Day and the machine on which
it is sent receives the answer back code of the party to whom it is sent before
5:00 p.m., be deemed to be given and received on that day and, in any other
case, be deemed to be given and received on the first Business Day following the
day on which it is sent.

         (c) Each Underwriter hereby agrees and acknowledges that the Company
shall be entitled to and shall act on any Communication given or agreement
entered into by or on behalf of the Underwriters by the Representatives and that
the Representatives have irrevocable authority to bind the Underwriters, except
in respect of any consent to a settlement of any claim, action, suit or
proceeding referred to in Section 7, which consent shall be given by the
Indemnifying Party.

         (d) Any certificate signed by any officer of the Company or any of its
subsidiaries delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.



                                       35
<Page>



If the foregoing is in accordance with your understanding and is agreed to by
you, please signify your acceptance on the accompanying counterparts of this
letter, return the same to us whereupon this letter as so accepted shall
constitute an agreement between us in accordance with the foregoing.


TD SECURITIES INC.                      MERRILL LYNCH CANADA INC.


per: (signed) Peter F. Grosskopf        per: (signed) Gregory Fournier
     ---------------------------------       ---------------------------------
     Peter F. Grosskopf                      Gregory Fournier




SCOTIA CAPITAL INC.                     YORKTON SECURITIES INC..


per: (signed) J. Paul Rollinson         per: (signed) Kenneth Gillis
     ---------------------------------       ---------------------------------
     J. Paul Rollinson                       Kenneth Gillis




CIBC WORLD MARKETS INC.                 SALOMON SMITH BARNEY CANADA INC.


per: (signed) Gerry Straub              per: (signed)  Douglas Eberlee
     ---------------------------------       ---------------------------------
     Gerry Straub                            Douglas Eberlee





DUNDEE SECURITIES CORPORATION           SPROTT SECURITIES INC.


per: (signed) Richard M. Cohen          per: (signed) W. Jeffrey Kennedy
     ---------------------------------       ---------------------------------
     Richard M. Cohen                        W. Jeffrey Kennedy



                                       36
<Page>



         The foregoing offer is accepted and agreed to as of the date first
above written.

                                        AGNICO-EAGLE MINES LIMITED


                                        per: (signed) David Garofalo
                                             -----------------------------------
                                              David Garofalo



                                       37
<Page>

                                   SCHEDULE A





<Table>
<Caption>
Legal Name of               Statutes      Business         Number of           Number of         Per Cent of Issued   Operating
Subsidiary                                Jurisdiction     Issued and          Voting Shares     and Outstanding      Status
                                                           Outstanding         Beneficially      Voting Shares
                                                           Voting Shares       Owned by          Beneficially
                                                                               Agnico            Owned by Agnico

<S>                         <C>           <C>              <C>                 <C>              <C>                  <C>
Telbel Mines Limited        Quebec        Ontario,          2,200,003            2,200,003       100%                 Holding
                                          Quebec                                                                      Company

Sudbury Contact             Ontario       Ontario,         20,494,660          13,813,778        67.4%                Mineral
Mines Limited                             Quebec                                                                      Exploration
</Table>




<Page>



                                   SCHEDULE B


                   DAVIES WARD PHILLIPS & VINEBERG LLP OPINION




1.       The Company is a corporation existing under the laws of the Province of
         Ontario and has filed its annual return under the CORPORATIONS
         INFORMATION ACT (Ontario) (the "CIA") for the most recent year in which
         it was required to file such a return.

2.       The Company has the corporate power and capacity under the laws of the
         Province of Ontario to own, lease and operate its properties and to
         conduct its business as described in the Canadian Prospectus and the
         U.S. Prospectus.

3.       The Company is a reporting issuer under the securities laws of each
         Canadian Province which recognizes the concept of reporting issuer and
         is not on the list of defaulting reporting issuers maintained by the
         Qualifying Authority in each of such province(s) that maintains such a
         list.

4.       The Company is extra-provincially registered or otherwise qualified as
         an extra-provincial or a foreign corporation to transact business under
         the laws of the Province of Quebec, being the only jurisdiction in
         which the nature of the Company's business or the location of its
         assets makes such registration or qualification necessary.

5.       The authorized, issued and outstanding share capital of the Company was
         as set forth in the U.S. Prospectus and the Canadian Prospectus under
         the headings "Description of Share Capital" and "Capitalization" and no
         holder of outstanding shares in the capital of the Company is or will
         be subject to personal liability for any act, default, obligation or
         liability of the Company solely by reason of being such a holder.

6.       Sudbury Contact Mines Limited ("Sudbury Contact") is a corporation
         existing under the laws of the Province of Ontario and has filed its
         annual return under the CIA for the most recent year in which it was
         required to file such a return. Sudbury Contact has the corporate power
         and capacity under the laws of the province of Ontario to own, lease
         and operate its properties and conduct its business as described in the
         U.S. Prospectus and the Canadian Prospectus.

7.       Sudbury Contact is extra-provincially registered or otherwise qualified
         as extra-provincial or foreign corporation to transact business under
         the laws of the Province of Quebec, being the only jurisdiction in
         which the nature of Sudbury Contact's business or the location of its
         assets makes such registration or qualification necessary.

8.       To such counsel's knowledge, the Company beneficially owns directly
         that number of shares in each subsidiary set forth opposite the
         subsidiary's name in Exhibit 1 hereto, free and clear of any pledge,
         lien, security interest, charge, claim, equity or encumbrance of any
         kind.



<Page>

9.       The Company has the corporate power and capacity to execute, deliver
         and perform its obligations under each of the Underwriting Agreement
         and the Warrant Indenture and each of the Underwriting Agreement and
         the Warrant Indenture has been duly authorized, executed and delivered
         by the Company and is enforceable against the Company in accordance
         with its terms (except for the provisions of Section 7 - Indemnity,
         Section 8 - Contribution and Section 9 - Severability of the
         Underwriting Agreement and Section 1.6 - Severability in respect of
         which such counsel shall not be required to opine).

10.      The Shares and Warrants have been and the Underlying Shares will be,
         when issued in accordance with the terms of the Warrants duly
         authorized and validly issued and are outstanding as fully paid and
         non-assessable and no holder of the Shares, Warrants or Underlying
         Shares is or will be subject to personal liability for any act,
         default, obligation or liability of the Company solely by reason of
         being such a holder.

11.      All corporate action required to be taken for the authorization,
         issuance, sale and delivery of the Shares, Underlying Shares and
         Warrants has been validly taken.

12.      Based solely on a review of the Company's constating documents and a
         certificate of the Company, the issuance of the Shares, Underlying
         Shares and Warrants is not subject to the pre-emptive rights of any
         shareholder of the Company.

13.      A Decision Document has been obtained for the Final Prospectus from the
         Reviewing Authority evidencing that receipts have been issued by each
         Qualifying Authority for the Final Prospectus and a Warrant Decision
         Document has been issued by the Reviewing Authority for the Canadian
         Warrant Prospectus and all necessary documents have been filed, all
         necessary proceedings have been taken and all necessary authorizations,
         approvals, permits, consents and orders have been obtained under the
         securities laws of the Qualifying Provinces to permit the Shares and
         Warrants comprising the Units to be offered, sold and delivered in the
         Qualifying Provinces by or through persons registered under such laws
         and no other authorization, approval, permit or license of any
         government, governmental instrumentality or court of any Qualifying
         Province or of Canada is required for the issuance, sale and delivery
         of the Shares and Warrants.

14.      The issue, sale and delivery by the Company of the Underlying Shares is
         exempt from the prospectus and registration requirements of the
         securities laws of the Qualifying Provinces provided that no commission
         or other remuneration is paid or given to others in respect of such
         issuance and delivery, except for ministerial, administrative or
         professional services, or for services performed by a registered
         dealer, subject to the receipt of necessary exemptive orders under the
         laws of New Brunswick and subject to customary qualifications.

15.      The first trade of the Warrant Shares following their issue, sale and
         delivery by the Company is not subject to the prospectus requirements
         of the securities laws of the



                                       2
<Page>

         Qualifying Provinces subject to customary qualifications and
         restrictions under applicable securities legislation;

16.      All descriptions in the U.S. Prospectus and the Canadian Prospectus of
         contracts and other documents to which the Company or its subsidiaries
         are a party are accurate in all material respects; to such counsel's
         knowledge, there are no contracts, indentures, mortgages, loan
         agreements, notes, leases or other instruments that in accordance with
         the requirements of the Qualifying Authorities must be made publicly
         available in connection with the offering of the Units that have not
         been made publicly available as required; and, to such counsel's
         knowledge, there are no documents required to be filed with the
         Qualifying Authorities in connection with the Canadian Preliminary
         Prospectus or the Canadian Prospectus that have not been filed as
         required.

17.      The statements made in the Registration Statement under Part II -
         Information Not Required To Be Delivered To Offerees or Purchasers -
         Indemnification, the statement made in the Canadian Prospectus and the
         U.S. Prospectus under the headings "Share Capital" and "Canadian
         Federal Income Tax Considerations" and the statements made in the
         Canadian Prospectus under the heading "Eligibility for Investment", to
         the extent that they constitute matters of law or legal conclusions,
         have been reviewed by us and fairly present the information disclosed
         therein in all material respects.

18.      The attributes of the Common Shares and the Warrants conform in all
         material respects to the description thereof contained in the U.S
         Prospectus and the Canadian Prospectus.

19.      The form of definitive certificate representing the Shares has been
         duly approved and adopted by the Company and complies with the
         provisions of the OBCA relating thereto and with the applicable
         requirements of the TSX.

20.      The form of definitive certificate representing the Warrants has been
         duly approved and adopted by the Company.

21.      To such counsel's knowledge, based solely on a certificate of an
         officer of the Company, no default exists in the performance or
         observance of any material obligation, agreement, covenant or condition
         in any contract, indenture, loan agreement, note, lease or other
         agreement or instrument to which the Company or any subsidiary is a
         party that is described or referred to in the U.S. Prospectus and the
         Canadian Prospectus or filed as an exhibit to the Registration
         Statement (collectively referred to as "Contracts") that is referred to
         in Exhibit A to this Schedule B (the "Contracts Exhibit"). For greater
         certainty, the aforementioned certificate of officer shall include
         confirmation that none of the Contracts which are not also referred to
         in the Contract Exhibit are material to the business or operations of
         the Company.



                                       3
<Page>

22.      The Shares, Warrants and Underlying Shares have been approved for
         listing on the TSX, subject to the Company fulfilling the requirements
         of such exchange set forth in the conditional approval letter on or
         before the date referred to in such letter, and in the case of the
         Warrants, subject also to meeting the requirements of the TSX that a
         minimum number of holders hold such Warrants.

23.      To such counsel's knowledge, based solely on a certificate of an
         officer of the Company, there is not pending or threatened any action,
         suit, proceeding, inquiry, or investigation, to which the Company or
         any subsidiary is a party, or to which the property of the Company or
         any subsidiary is subject, before or brought by any court or
         governmental agency or body, domestic or foreign, which might
         reasonably be expected to result in a Material Adverse Effect, or which
         might reasonably be expected to materially and adversely affect the
         properties or assets of the Company or any subsidiary or the
         consummation of the transactions contemplated in the Underwriting
         Agreement or the performance by the Company of its obligations
         thereunder.

24.      To such counsel's knowledge, no order having the effect of ceasing or
         suspending the distribution of the Shares, Underlying Shares and
         Warrants or the trading in the Common Shares has been issued by any
         securities commission or securities regulatory authority in Canada and
         no proceedings for that purpose have been instituted or are pending or
         contemplated.

25.      The execution, delivery and performance of the Underwriting Agreement,
         the Warrant Indenture and the consummation by the Company of the
         transactions contemplated in the Underwriting Agreement, the Warrant
         Indenture, the Registration Statement, the U.S. Prospectus, and the
         Canadian Prospectus and compliance by the Company with its obligations
         under each of the Underwriting Agreement and the Warrant Indenture do
         not and will not result in any violation of the constating documents of
         the Company or Sudbury, and do not and will not, whether with or
         without the giving of notice or lapse of time or both, conflict with or
         result in a breach of, a default under, or Repayment Event (as defined
         in the Underwriting Agreement) or result in the creation or imposition
         of any lien, charge or encumbrance upon any properties or assets of the
         Company or any subsidiary under (a) any indenture, mortgage, loan
         agreement or other agreement or instrument referred to in the Contracts
         Exhibit (provided that such counsel is not required to express an
         opinion with respect to real property, mining leases and subleases,
         mining licenses, claims, rights and concessions) except for such
         conflicts, breaches or defaults or liens, charges or encumbrances that
         would not have a Material Adverse Effect; (b) any existing applicable
         Canadian federal statute or regulation or statute or regulation of the
         Province of Ontario; or (c) to such counsel's knowledge, any judgment,
         order or decree of any government, governmental, regulatory or
         administrative agency, authority, commission or instrumentality or
         court having jurisdiction over the Company or Sudbury or any of their
         properties, assets or operations.



                                       4
<Page>

26.      The Common Shares and Warrants comprising the Units are qualified
         investments under the INCOME TAX ACT (Canada) for trusts governed by
         registered retirement savings plans, registered retirement income
         funds, registered education savings plans and deferred profit sharing
         plans, and are not "foreign property" for the purposes of the tax
         imposed under Part XI of the INCOME TAX ACT (Canada).


27.      Each of the Canadian Prospectus, the Canadian Warrant Prospectus and
         the Supplementary Material in connection with the offering of the Units
         (excluding the financial statements and other financial data included
         or incorporated therein or omitted therefrom, as to which such counsel
         need express no opinion) comply as to form with the requirements of the
         securities laws, rules and regulations of the Province of Ontario as
         interpreted and applied by the Reviewing Authority.


28.      The provisions of the Quebec Securities Act relating to the use of the
         French language and of the Charter of the French Language, R.S.Q.c.
         C-11 (other than those relating to verbal communications, as to which
         we express no opinion) will have been complied with in respect of the
         Prospectus and forms of order and confirmation (the "Offering
         Documents") to be delivered to purchasers in the Province of Quebec in
         connection with the sale of the Units, when issued, to the extent such
         purchasers receive a copy of the Offering Documents in the French
         language (on the assumption that the Offering Documents constitute the
         entire contract for the Units), provided that the Offering Documents in
         the English language may be delivered without delivery of the French
         language versions thereof to those physical persons in the Province of
         Quebec who have expressly requested in writing to receive such Offering
         Documents in the English language only.


29.      The Company is eligible to file a short form prospectus with the
         Reviewing Authority.


30.      The filing of the Final Prospectus and the Final Warrant Prospectus
         with the Reviewing Authority and the Qualifying Authorities, in each
         case, have been duly authorized by and on behalf of the Company.


31.      The filing of the Registration Statement and the Warrant Registration
         Statement with the Commission has been duly authorized by and on behalf
         of the Company.


         Such opinion shall additionally state that such counsel have
participated in the preparation of the Registration Statement, the U.S.
Prospectus, the Canadian Prospectus, and the Supplementary Material in
connection with the offering of the Units, if any, and in conferences with
officers and other representatives of the Company, representatives of the
independent chartered accountants for the Company, and representatives of the
Underwriters, at which the contents of the Registration Statement, the U.S.
Prospectus and the Canadian Prospectus and related matters were discussed and
are familiar with or have participated in the preparation of the documents
incorporated by reference in the U.S. Prospectus and the Canadian Prospectus
and,



                                       5
<Page>

although such counsel are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Canadian Prospectus, except as set forth in paragraphs 5 and 15 above, on the
basis of the foregoing, no facts have come to such counsel's attention which
gave such counsel reason to believe that the Canadian Prospectus and such
Supplementary Material (except for the financial statements and other financial
data included or incorporated therein or omitted therefrom, as to which such
counsel need not comment), at the time the Canadian Prospectus was filed with
the Qualifying Authorities, at the time any such Supplementary Material filed
before the Closing Time was filed with the Qualifying Authorities, or at the
Closing Time, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.


         In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the laws of the Province of
Ontario and the federal laws of Canada applicable therein, upon opinions of
local counsel, who shall be counsel satisfactory to counsel for the
Underwriters, in which case the opinion shall state that they believe the
Underwriters and they are entitled to so rely. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
certificates of public officials; provided that such certificates have been
delivered to the Underwriters. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions.




                                       6
<Page>


                             EXHIBIT A TO SCHEDULE B

                                CONTRACTS EXHIBIT

1.       Credit Agreement dated November 13, 2001 among Agnico-Eagle Mines
         Limited and a syndicate of lenders led by The Bank of Nova Scotia;

2.       Indenture dated as of February 15, 2002 among Agnico-Eagle Mines
         Limited and Computershare Trust Company of Canada, as trustee relating
         to the issuance of 4.50% convertible subordinated debentures due 2012;

3.       Net Profits Royalty Agreement dated June 21, 1999 among Barrick Gold
         Corporation, Lac Exploration Inc., and Agnico-Eagle Mines Limited;

4.       Net Smelter Royalty Agreement dated June 21, 1999 among Barrick Gold
         Corporation, Lac Exploration Inc., and Agnico-Eagle Mines Limited;

5.       Employment Agreement between Agnico-Eagle Mines Limited and Anton
         Adamcik dated March 1, 2002;

6.       Employment Agreement between Agnico-Eagle Mines Limited and Sean Boyd
         dated June 12, 1998;

7.       Employment Agreement between Agnico-Eagle Mines Limited and David
         Garofalo dated June 8, 1998;

8.       Employment Agreement between Agnico-Eagle Mines Limited and Barry
         Landen dated March 1, 2002; and

9.       Employment Agreement between Agnico-Eagle Mines Limited and Eberhard
         Scherkus dated June 12, 1998.



                                       7
<Page>



                                  EXHIBIT 1 TO

                                   SCHEDULE B

                           AGNICO-EAGLE MINES LIMITED

                                  SUBSIDIARIES


<Table>
<Caption>
                                           NUMBER OF VOTING SHARES BENEFICIALLY
LEGAL NAME OF SUBSIDIARY                   OWNED BY AGNICO-EAGLE MINES LIMITED
- ------------------------                   -----------------------------------

<S>                                                    <C>
Sudbury Contact Mines Limited                          13,813,778

Telbel Mines Limited                                    2,200,003

</Table>

                                      8


<Page>
                                   SCHEDULE C

                             QUEBEC COUNSEL OPINION

1.       The Company is the registered owner of the mining rights, leases
         ("Leases") and concessions (collectively, "Mining Rights") referred to
         in a schedule (the "Schedule") to such opinion and has title thereto,
         subject to the provisions of the MINING ACT (Quebec) and there are no
         registered liens or encumbrances against such Mining Rights except as
         set forth in the Schedule to such opinion and the Leases are valid and
         enforceable in accordance with their respective terms.

2.       Such counsel has been informed by letter received from the Minister of
         Energy and Resources (Quebec) and addressed to such counsel, that the
         Company, as holders of the Leases, have complied with their obligations
         with respect to the Leases pursuant to the MINING ACT (Quebec).

3.       The execution and delivery of each of the Underwriting Agreement and
         the Warrant Indenture by the Company, the authorization, issuance and
         delivery of the Shares, Underlying Shares and Warrants, the
         consummation by the Company of the transactions contemplated in the
         Underwriting Agreement, the Warrant Indenture, the Registration
         Statement, the U.S. Prospectus and the Canadian Prospectus, and
         compliance by the Company with the terms of the Underwriting Agreement
         do not and will not result in a breach of any of the terms or
         provisions of, or constitute a default under, or result in the creation
         or imposition of any lien, charge or encumbrance upon any property or
         assets of the Company under (a) the Leases; or (b) any existing
         applicable law, rule or regulation of the Province of Quebec.










<Page>



                                   SCHEDULE D

                    FORM OF OPINION OF COMPANY'S U.S. COUNSEL


1.       Each of the Registration Statement and the Warrant Registration
         Statement filed in connection with the offering and sale of the Common
         Shares and Warrants issuable in respect of the Units and the Underlying
         Shares in the United States, respectively, is effective under the
         Securities Act of 1933 (the "1933 Act"), the Company is eligible to
         file the Registration Statement and Warrant Registration Statement on
         Form F-10 and the Form F-X and Warrant Form F-X were filed with the
         Commission prior to the effectiveness of the Registration Statement and
         Warrant Registration Statement; and, to the best of such counsel's
         knowledge, no stop order suspending the effectiveness of the
         Registration Statement or Warrant Registration Statement has been
         issued and no proceedings for that purpose have been instituted or are
         pending or threatened under the 1933 Act. The required filing of the
         supplement to the Warrant Registration Statement pursuant to General
         Instruction II.L of Form F-10 has been made in the manner and in the
         time period required by such General Instruction.


2.       The Registration Statement, Warrant Registration Statement, the U.S.
         Prospectus and the U.S. Warrant Prospectus, excluding the documents
         incorporated by reference therein, and each amendment or supplement
         thereto (except for the financial statements and other financial data
         included therein or omitted therefrom as to which such counsel need
         express no opinion), as of their respective effective or issue dates,
         comply as to form with the requirements of the 1933 Act and the
         Regulations under the 1933 Act; the Form F-X and Warrant Form F-X
         comply as to form with the requirements of the 1933 Act and the
         Regulations under the 1933 Act.

3.       No consent, approval, authorization, license, order, registration,
         qualification or decree of or with any court or governmental authority,
         agency or body, domestic or foreign, other than as have been obtained
         under the 1933 Act is necessary or required in connection with the due
         authorization, execution and delivery of the Underwriting Agreement,
         the Warrant Indenture or for the offering, issuance, sale or delivery
         of the Shares, the Underlying Shares and the Warrants under the federal
         securities laws of the United States of America.

4.       To such counsel's knowledge, there is not pending or threatened any
         action, suit, proceeding, inquiry, or investigation, to which the
         Company or any subsidiary is a party, or to which the property of the
         Company or any subsidiary is subject, before or brought by any court or
         governmental agency or body, domestic or foreign.

5.       The statements in the U.S. Prospectus under the caption "United States
         Federal Income Tax Considerations", to the extent they constitute legal
         matters with respect to United States taxation, have been reviewed by
         such counsel and fairly present the information stated therein in all
         material respects.

6.       All descriptions in the Registration Statement of (i) U.S. statutes,
         regulations, legal or governmental proceedings are fairly summarized in
         all material respects and to the best of


<Page>

         such counsel's knowledge, there are no U.S. statutes or regulations,
         pending or threatened legal or governmental proceedings, franchises,
         contracts, indentures, mortgages, loan agreements, notes, leases or
         other instruments required to be described or referred to in the
         Registration Statement other than those described or referred to
         therein or filed or incorporated by reference as exhibits thereto, and
         the summaries thereof or references thereto are correct in all material
         respects.

7.       To such counsel's knowledge, based solely on a certificate of an
         officer of the Company, no default exists in the performance or
         observance of any material obligation, agreement, covenant or condition
         contained in any contract, indenture, loan agreement, note, lease or
         other agreement or instrument that is described or referred to in the
         Registration Statement, the U.S. Prospectus or the Canadian Prospectus
         or filed as an exhibit to the Registration Statement (collectively
         referred to as "Contracts") that is referred to in Exhibit A to this
         Schedule C (the "Contracts Exhibit"). For greater certainty, the
         aforementioned certificate of officer shall include confirmation that
         none of the Contracts which are not also referred to in the Contracts
         Exhibit are material to the business or operations of the Company.


8.       The forms of certificate used to evidence the Common Shares comply in
         all material respects with the requirements of the NYSE and the
         Warrants comply in all material respects with the requirements of
         NASDAQ.

9.       The Shares and Underlying Shares have been approved for listing on the
         NYSE, subject to notice of issuance of the Shares and Underlying Shares
         and the Warrants have been approved for listing on NASDAQ.

The Company is not, and upon the issuance and sale of the Units and the
application of the net proceeds therefrom as described in the Canadian
Prospectus and the U.S. Prospectus will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").

         Such opinion shall additionally state that such counsel have
participated in the preparation of the Registration Statement and the U.S.
Prospectus and in conferences with officers and other representatives of the
Company, representatives of the independent chartered accountants for the
Company, and representatives of the Underwriters, at which the contents of the
Registration Statement and the U.S. Prospectus and related matters were
discussed and, although such counsel are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the U.S. Prospectus except as set
forth in paragraphs (5) and (6) above, on the basis of the foregoing no fact has
come to such counsel's attention which gave such counsel reason to believe that,
as of its effective date, (A) the Registration Statement or any amendment
thereto made prior to the Closing Time (except for the financial statements and
other financial data included or incorporated therein or omitted therefrom, as
to which such counsel need not comment), at the time the Registration Statement
or any such amendment became effective, contained an untrue



                                       2
<Page>

statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or (B)
the U.S. Prospectus or any amendment or supplement thereto made prior to the
Closing Time (except for the financial statements and other financial data
included or incorporated therein or omitted therefrom, as to which such counsel
need not comment), at the time the U.S. Prospectus was issued, at the time any
such amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.

         In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the Commonwealth of
Virginia and the federal law of the United States, upon opinions of local
counsel, in which case the opinion shall state that they believe the
Underwriters and they are entitled to so rely. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
certificates of public officials; provided that such certificates have been
delivered to the Underwriters. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).






                                       3
<Page>





                             EXHIBIT A TO SCHEDULE D

                                CONTRACTS EXHIBIT


1.       Credit Agreement dated November 13, 2001 among Agnico-Eagle Mines
         Limited and a syndicate of lenders led by The Bank of Nova Scotia;

2.       Indenture dated as of February 15, 2002 among Agnico-Eagle Mines
         Limited and Computershare Trust Company of Canada, as trustee relating
         to the issuance of 4.50% convertible subordinated debentures due 2012;

3.       Net Profits Royalty Agreement dated June 21, 1999 among Barrick Gold
         Corporation, Lac Exploration Inc., and Agnico-Eagle Mines Limited;

4.       Net Smelter Royalty Agreement dated June 21, 1999 among Barrick Gold
         Corporation, Lac Exploration Inc., and Agnico-Eagle Mines Limited;

5.       Employment Agreement between Agnico-Eagle Mines Limited and Anton
         Adamcik dated March 1, 2002;

6.       Employment Agreement between Agnico-Eagle Mines Limited and Sean Boyd
         dated June 12, 1998;

7.       Employment Agreement between Agnico-Eagle Mines Limited and David
         Garofalo dated June 8, 1998;

8.       Employment Agreement between Agnico-Eagle Mines Limited and Barry
         Landen dated March 1, 2002; and

9.       Employment Agreement between Agnico-Eagle Mines Limited and Eberhard
         Scherkus dated June 12, 1998.




<Page>

                                   SCHEDULE E

                            FORM OF LOCK-UP AGREEMENT



                                                                October 31, 2002


TD SECURITIES INC.
MERRILL LYNCH CANADA INC.
on behalf of the several Underwriters
named in the within-mentioned
Underwriting Agreement

c/o  TD Securities Inc.
     66 Wellington Street West
     8th Floor, P.O. Box 1
     TD Tower
     Toronto, Ontario
     M5X 1A2

Ladies and Gentlemen:

         The undersigned director or senior officer of Agnico-Eagle Mines
Limited, an Ontario company (the "Company"), understands that an Underwriting
Agreement (the "Underwriting Agreement") will be executed by the Company and TD
Securities Inc. and Merrill Lynch Canada Inc. (the "Underwriters"), providing
for the public offering (the "Offering") of 12,000,000 units of the Company
("Units") in the United States pursuant to the Company's registration statement
on Form F-10 (File No. 333-100850), as amended or supplemented, and in all
provinces of Canada pursuant to a short form prospectus to be filed by the
Company, as amended or supplemented.

         This Lock-up Letter Agreement is being entered into in accordance with
paragraph 5(k) of the Underwriting Agreement at the request of the Underwriters.

         For good and valuable consideration, receipt of which is hereby
acknowledged, the undersigned agrees that without the prior written consent of
each of TD Securities Inc. and Merrill Lynch Canada Inc., on behalf of the
Underwriters, the undersigned will not, directly or indirectly, sell (including
any sale pursuant to Rule 144 under the Securities Act of 1933, as amended),
offer to sell, pledge, file a registration statement or prospectus, announce any
intention to sell or grant any option for the sale of any Common Shares
(including, without limitation, Common Shares which may be deemed to be
beneficially owned by such shareholder in accordance with the rules and
regulations of the Securities and Exchange Commission or the securities
legislation of any province or territory of Canada and shares of Common Stock
which may be issued upon exercise of any option or warrant) or any securities
convertible into or exchangeable or exercisable for Common Shares for a period
(the "Lock-up Period") commencing the date of the Underwriting Agreement and
ending 90 days thereafter; provided


<Page>

that during the Lock-up Period, the undersigned may make gifts of Common Shares
or securities convertible into Common Shares, or may transfer to its affiliates
shares of Common Shares convertible into Common Shares, upon the condition that
such donees or transferees agree to be bound by the foregoing restriction in the
same manner as it applies to the undersigned.

         The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-up Letter Agreement.

         The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary or
desirable in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the successors and assigns of the undersigned.

         This Lock-up Letter Agreement has been entered into on the date first
written above.



                                        Yours very truly,


                                        ------------------------------------
                                        Name of Director or Senior Officer
Names of Directors and
Senior Officers:
Anton Adamcik, P. Eng.
Donald Allan
Douglas R. Beaumont
Alain Blackburn
Sean Boyd, C.A.
John T. Clement, Q.C.
Irving Dobbs
David Garofalo
Dr. Alan Green
Wencel Hubacheck
Bernard Kraft, C.A.
Barry Landen
James D. Nasso
Eberhard Scherkus, P. Eng.
Ernest Sheriff



                                       2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-7.1
<SEQUENCE>4
<FILENAME>a2092806zex-7_1.txt
<DESCRIPTION>EXHIBIT 7.1
<TEXT>
<PAGE>

                                                                     EXHIBIT 7.1








                           AGNICO-EAGLE MINES LIMITED

                                       AND

                      COMPUTERSHARE TRUST COMPANY OF CANADA

















              ----------------------------------------------------
                                WARRANT INDENTURE

                PROVIDING FOR THE ISSUE OF UP TO 6,900,000 COMMON
                             SHARE PURCHASE WARRANTS
              ----------------------------------------------------








                                NOVEMBER 14, 2002




<PAGE>


                                TABLE OF CONTENTS


                                    ARTICLE 1
                                 INTERPRETATION

<TABLE>
<S>      <C>                                                                 <C>

1.1      Definitions...........................................................2
1.2      Construction..........................................................6
1.3      Business Day..........................................................6
1.4      Time of the Essence...................................................6
1.5      Applicable Law........................................................6
1.6      Severability..........................................................7
1.7      Schedule..............................................................7

                                    ARTICLE 2
                                ISSUE OF WARRANTS

2.1      Issue of Warrants.....................................................8
2.2      Form and Terms of Warrants............................................8
2.3      Signing of Warrant Certificates.......................................8
2.4      Certification.........................................................9
2.5      Warrantholder Not a Shareholder, Etc..................................9
2.6      Issue in Substitution for Lost Warrant Certificates...................9
2.7      Warrants to Rank Pari Passu..........................................10
2.8      Register for Warrants................................................10
2.9      Transferee Entitled to Registration..................................10
2.10     Registers Open for Inspection........................................11
2.11     Exchange of Warrants.................................................11
2.12     Ownership of Warrants................................................11
2.13     Adjustment of Exercise Rights........................................12
2.14     Adjustment Rules.....................................................16
2.15     Postponement of Subscription.........................................17
2.16     Notice of Adjustment of Exercise Rights..............................18
2.17     No Action after Notice...............................................18
2.18     No Duty to Inquire...................................................18
2.19     Rights Issued in Respect of Underlying Securities Issued on Exercise.19

                                    ARTICLE 3
                              EXERCISE OF WARRANTS

3.1      Method of Exercise of Warrants.......................................19
3.2      Expiration of Warrants...............................................20
3.3      Effect of Exercise of Warrants.......................................20
3.4      Redemption of Warrants Held by U.S. Persons..........................21
3.5      Cancellation of Warrant Certificates.................................22
3.6      No Fractional Shares.................................................22
</TABLE>
                                      -i-
<PAGE>

<TABLE>
<S>      <C>                                                                 <C>
3.7      Securities Restrictions; Legends.....................................23
</TABLE>

                                    ARTICLE 4
                                    COVENANTS
<TABLE>
<S>      <C>                                                                 <C>
4.1      General Covenants....................................................23
4.2      Trustee Remuneration and Expenses....................................25
4.3      Performance of Covenants by Trustee..................................25
</TABLE>

                                    ARTICLE 5
                                   ENFORCEMENT
<TABLE>
<S>      <C>                                                                 <C>
5.1      Suits by Warrantholders..............................................25
5.2      Immunity of Shareholders, Etc........................................26
5.3      Limitation of Liability..............................................26
</TABLE>

                                    ARTICLE 6
                           MEETINGS OF WARRANTHOLDERS
<TABLE>
<S>      <C>                                                                 <C>
6.1      Right to Convene Meetings............................................26
6.2      Notice...............................................................26
6.3      Chair................................................................27
6.4      Quorum...............................................................27
6.5      Power to Adjourn.....................................................27
6.6      Show of Hands........................................................28
6.7      Poll and Voting......................................................28
6.8      Regulations..........................................................28
6.9      Company, Trustee and Counsel May Be Represented......................29
6.10     Powers Exercisable by Extraordinary Resolution.......................29
6.11     Meaning of Extraordinary Resolution..................................30
6.12     Powers Cumulative....................................................31
6.13     Minutes..............................................................31
6.14     Instruments in Writing...............................................31
6.15     Binding Effect of Resolutions........................................32
6.16     Holdings by the Company or Subsidiaries Disregarded..................32
</TABLE>

                                    ARTICLE 7
                             SUPPLEMENTAL INDENTURES
<TABLE>
<S>      <C>                                                                 <C>
7.1      Supplemental Indentures..............................................32
7.2      Successor Corporations...............................................33
</TABLE>

                                    ARTICLE 8
                             CONCERNING THE TRUSTEES
<TABLE>
<S>      <C>                                                                 <C>
8.1      Trust Indenture Legislation..........................................33
8.2      Rights and Duties of Trustee.........................................34
</TABLE>
                                      -ii-
<PAGE>
<TABLE>
<S>      <C>                                                                 <C>
8.3      Evidence, Experts and Advisers.......................................35
8.4      Documents Held by Trustee............................................35
8.5      Actions by Trustee to Protect Interests..............................36
8.6      Trustee Not Required to Give Security................................36
8.7      Protection of Trustee................................................36
8.8      Replacement of Trustee...............................................37
8.9      Conflict of Interest.................................................38
8.10     Acceptance of Trusts.................................................38
8.11     Trustee Not to Be Appointed Receiver.................................38
8.12     Indemnity of Trustee.................................................38
8.13     Notice...............................................................38
</TABLE>

                                    ARTICLE 9
                                     GENERAL
<TABLE>
<S>      <C>                                                                 <C>
9.1      Notice...............................................................39
9.2      Accidental Failure to Give Notice to Warrantholders..................41
9.3      Counterparts and Formal Date.........................................41
9.4      Satisfaction and Discharge of Indenture..............................41
9.5      Provisions of Indenture and Warrants for the Sole Benefit of Parties
           and Warrantholders.................................................41
9.6      Language.............................................................41
9.7      Purchase of Warrants by Company......................................42
9.8      Assignment...........................................................42
9.9      No Waiver, etc.......................................................42
9.10     Further Assurances...................................................42
</TABLE>

                                     -iii-
<PAGE>


                  THIS WARRANT INDENTURE dated November 14, 2002.

B E T W E E N:

                  AGNICO-EAGLE MINES LIMITED,
                  a corporation existing under the laws of the Province of
                  Ontario,

                  (hereinafter referred to as the "COMPANY"),

                  - and -

                  COMPUTERSHARE TRUST COMPANY OF CANADA,
                  a trust company organized and existing under the laws of
                  Canada and duly authorized to carry on the trust business in
                  each province of Canada,

                  (hereinafter referred to as the "TRUSTEE"),



                  WHEREAS the Company is duly authorized to create and issue the
common share purchase warrants to be issued as herein provided;

                  AND WHEREAS all things necessary have been done and performed
to make the common share purchase warrants, when certified by the Trustee and
issued as in this Indenture provided, legal, valid and binding upon the Company
with the benefits of and subject to the terms of this Indenture;

                  AND WHEREAS the Trustee has agreed to enter into this
Indenture and to hold all rights, interests and benefits contained herein for
and on behalf of those persons who from time to time become holders of common
share purchase warrants issued pursuant to this Indenture;

                  NOW THEREFORE THIS INDENTURE WITNESSES that for good and
valuable consideration mutually given, the receipt and sufficiency of which are
hereby acknowledged, the Company hereby appoints the Trustee as warrant trustee
for the holders of common share purchase warrants, to hold all rights, interests
and benefits contained herein for and on behalf of those persons who from time
to time become holders of common share purchase warrants issued pursuant to this
Indenture, and it is hereby agreed and declared as follows:

<PAGE>
                                      -2-

                                    ARTICLE 1
                                 INTERPRETATION

1.1      DEFINITIONS

                  In this Indenture, unless there is something in the subject
matter or context inconsistent therewith, the following phrases and words shall
have the meanings set out below and grammatical variations of such terms shall
have corresponding meanings:

"APPLICABLE LEGISLATION" has the meaning set out in Section 8.1(a);

"BUSINESS DAY" means a day other than a Saturday, Sunday or civic or statutory
holiday in Toronto, Ontario or the City of New York, New York;

"CAPITAL REORGANIZATION" has the meaning set out in Section 2.13(e);

"COMMON SHARES" means the fully paid and non-assessable common shares in the
capital of the Company, as currently constituted;

"COMPANY" means Agnico-Eagle Mines Limited, a corporation existing under the
laws of the Province of Ontario, and its successors from time to time;

"COMPANY'S AUDITORS" means Ernst & Young LLP or any other independent chartered
accountant or firm of chartered accountants duly appointed as auditors of the
Company from time to time;

"COUNSEL" means a barrister or solicitor or a firm of barristers or solicitors
(who may be counsel for the Company) acceptable to the Trustee, acting
reasonably;

"CURRENT MARKET PRICE PER COMMON SHARE" means, at any date, the U.S. dollar
volume-weighted-average closing price per Common Share for the 20 consecutive
Trading Days commencing on the Trading Day immediately before such date on the
NYSE or, if the Common Shares are not then listed on the NYSE then on such other
U.S. stock exchange or Nasdaq on which the Common Shares are then listed or
quoted as may be selected by the directors of the Company or, if the Common
Shares are not then listed or quoted on any U.S. stock exchange or Nasdaq then
on such other stock exchange on which the Common Shares are then listed as may
be selected by the directors of the Company or, if the Common Shares are not
then listed on a stock exchange, on the over-the-counter market (provided that,
in each case, if such average price is not in U.S. dollars, such price will be
translated into U.S. dollars using the then applicable Exchange Rate); provided
that, if there is no market for the Common Shares during all or part of such
period during which the Current Market Price per Common Share would otherwise be
determined, the Current Market Price per Common Share shall in respect of all or
such part of the period be determined by a nationally-recognized firm of
chartered accountants appointed by the Company (who may be the Company's
auditors), in each case appropriately

<PAGE>
                                      -3-

adjusted to take into account the occurrence during such 20-Trading Day period
of any event that would result in an adjustment of the Exercise Price pursuant
to Section 2.13;

"DIRECTOR" means a director of the Company for the time being and, unless
otherwise specified herein, reference herein to an "ACTION OF THE DIRECTORS"
means an action by the directors of the Company as a board or, whenever duly
empowered, an action by a committee of directors;

"DIVIDENDS PAID IN ORDINARY COURSE" means such dividends paid in cash on the
Common Shares in any fiscal year of the Company to the extent that such
dividends in the aggregate do not exceed in amount or value the greatest of:

   (a)   110% of the aggregate amount or value of the dividends paid by the
         Company on its Common Shares in the 12 consecutive months ended
         immediately prior to the first day of such fiscal year;

   (b)   25% of the consolidated net earnings of the Company before
         extraordinary items and after dividends paid on any and all preferred
         shares of the Company for the most recently completed fiscal year (such
         consolidated net earnings to be shown in the audited financial
         statements of the Company prepared in accordance with United States
         generally accepted accounting principles); and

   (c)   10% of the Shareholders' Equity.

"ELIGIBLE INSTITUTION" means a Canadian chartered bank, a major trust company in
Canada, a firm which is a member of a recognized stock exchange in Canada, a
member of the Investment Dealers Association of Canada, a national securities
exchange in the United States or the National Association of Securities Dealers,
Inc., or a participant in the Securities Transfer Agents Medallion (STAMP)
Program;

"EXCHANGE RATE" means, on any date for determination, the rate at which United
States dollars may be exchanged into Canadian dollars calculated using the noon
buying rate in The City of New York for cable transfers in Canadian dollars as
certified for customs purposes by the Federal Reserve Bank of New York; provided
that in the event that such rate is not quoted or published by the Federal
Reserve Bank of New York, the Exchange Rate shall be determined by reference to
such other publicly available service for displaying exchange rates as may be
determined by the Company;

"EXERCISE DATE", with respect to any Warrant, means the date during the Exercise
Period on which such Warrant is surrendered for exercise in accordance with the
provisions of Article 3;

"EXERCISE PERIOD", with respect to any Warrant, means the period beginning at
the date hereof and ending at the Expiry Time;

<PAGE>
                                      -4-

"EXERCISE PRICE" means, at any time, US$19.00 per Common Share, unless such
price shall have been adjusted in accordance with the provisions of Sections
2.13 and 2.14, in which case it shall mean the adjusted price in effect at such
time;

"EXPIRY DATE", with respect to any Warrant, means November 14, 2007;

"EXPIRY TIME" means 5:00 p.m. (Toronto time) on the Expiry Date;

"EXTRAORDINARY RESOLUTION" has the meaning set out in Section 6.11;

"ISSUER BID" has the meaning set out in Section 2.13(d);

"NASDAQ" means the Nasdaq National Market;

"NYSE" means the New York Stock Exchange, Inc.;

"PERSON" includes, without limitation, an individual, corporation, partnership,
joint venture, trust, firm, unincorporated organization or any other legal or
business entity;

"REDEMPTION FORM" has the meaning set out in Section 4.1(i);

"REGISTRATION STATEMENT" means the Company's shelf registration statement on
Form F-10 (File No. 333-100902), or another, shelf registration statement filed
with the United States Securities and Exchange Commission under the 1933 Act,
relating to the Common Shares issuable upon exercise of the Warrants;

"RIGHTS OFFERING" has the meaning set out in Section 2.13(b);

"RIGHTS PERIOD" has the meaning set out in Section 2.13(b);

"SHARE REORGANIZATION" has the meaning set out in Section 2.13(a);

"SHAREHOLDER" means a holder of record on the books of the Company of one or
more Common Shares;

"SHAREHOLDERS' EQUITY" means the aggregate of all classes of share capital,
other paid-in-capital, retained earnings/deficit and any and all surplus
accounts and reserves as shown on the audited financial statements of the
Company for the most recently ended fiscal year prepared in accordance with
United States generally accepted accounting principles;

"SPECIAL DISTRIBUTION" has the meaning set out in Section 2.13(c);

"SUCCESSOR" has the meaning set out in Section 7.2, unless the context otherwise
requires;

<PAGE>
                                      -5-

"TRADING DAY" means any day on which trading occurs on the NYSE (or such other
exchange or market provided for in the definition of "Current Market Price"),
and at least one trade of at least one board lot of Common Shares occurs on such
day;

"TRUSTEE" means Computershare Trust Company of Canada, a trust company organized
and existing under the laws of Canada, or its successors for the time being in
the trusts hereby created;

"TSX" means The Toronto Stock Exchange;

"UNDERLYING SECURITIES" means the Common Shares issuable upon the exercise of
the Warrants, including the shares or other securities or property issuable upon
the exercise of the Warrants as a result of any adjustment of exercise rights
pursuant to Sections 2.13 and 2.14;

"U.S. PERSON" means a "U.S. person" as defined in Rule 902(k) of Regulation S
under the 1933 Act;

"U.S. AGENT" means Computershare Trust Company of New York or any replacement
agent of the Trustee designated by the Trustee, with the approval of the
Company, from time to time;

"WARRANT CERTIFICATES" has the meaning set out in Section 2.1;

"WARRANTHOLDER" or "HOLDER" means a person whose name is entered for the time
being in the register maintained pursuant to Section 2.8(b) and, for greater
certainty, in respect of any action to be taken by a holder in respect of his
Warrants, means the holder or his successors, executors, administrators or other
legal representatives or his or their attorney duly appointed by instrument in
writing in form, substance and execution satisfactory to the Trustee with
signatures guaranteed by an Eligible Institution;

"WARRANTHOLDERS' REQUEST" means an instrument signed in one or more counterparts
by Warrantholders holding in the aggregate not fewer than 25% of the then
outstanding Warrants, requesting the Trustee to take some action or proceeding
specified therein;

"WARRANTS" means the up to 6,900,000 common share purchase warrants of the
Company issuable hereunder;

"WRITTEN ORDER OF THE COMPANY", "WRITTEN REQUEST OF THE COMPANY", "WRITTEN
CONSENT OF THE COMPANY", "CERTIFICATE OF THE COMPANY" and any other document
required to be signed by the Company means, respectively, a written order,
request, consent, certificate or other document signed in the name of the
Company by any one of the chairman of the board of directors, chief executive
officer, president, secretary, or any vice-president of the Company, and may
consist of one or more instruments so executed; and

"1933 ACT" means the United States Securities Act of 1933, as amended.

<PAGE>
                                      -6-

1.2      CONSTRUCTION

         In this Indenture, unless otherwise expressly stated or the context
otherwise requires:

   (a)   the division of this Indenture into Articles and Sections, the
         provision of a table of contents and the insertion of headings are for
         convenience of reference only and shall not affect the construction or
         interpretation of this Indenture;

   (b)   the terms, "this Indenture", "herein", "hereby", "hereof" and
         "hereunder" and similar expressions refer to this warrant indenture and
         not to any particular Article, Section or other portion hereof and
         include any agreement or instrument supplemental or ancillary hereto;

   (c)   references to Articles, Sections and Schedules are to the specified
         Articles or Sections of or Schedules to this Indenture;

   (d)   words importing the singular include the plural and VICE VERSA and
         words importing any gender shall include the masculine, feminine and
         neutral genders;

   (e)   all references herein and in the Warrant Certificates to dollar amounts
         are references to United States dollars; and

   (f)   the words "includes" and "including", when following any general term
         or statement, is not to be construed as limiting the general term or
         statement to the specific items or matters set forth or to similar
         items or matters, but rather as referring to all other items or matters
         that could reasonably fall within the broadest possible scope of the
         general term or statement.

1.3      BUSINESS DAY

         In the event that any day on or before which any action is required or
permitted to be taken hereunder is not a Business Day, then such action shall be
required or permitted to be taken on or before the requisite time on the next
succeeding day that is a Business Day.

1.4      TIME OF THE ESSENCE

         Time shall be of the essence in all respects in this Indenture and the
Warrants.

1.5      APPLICABLE LAW

         This Indenture (and any amendments hereto and instruments supplemental
hereto), and the Warrants shall be governed by and construed and enforced in
accordance with the laws of Ontario and the federal laws of Canada applicable in
that province and shall be treated in all respects as Ontario contracts. The
parties irrevocably attorn and submit to the non-

<PAGE>
                                      -7-

exclusive jurisdiction of the courts of Ontario with respect to any matter
arising under or related to the Indenture.

1.6      AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER OF IMMUNITIES

         By the execution and delivery of this Indenture, the Company (i)
acknowledges that it has, by separate written instrument, irrevocably designated
and appointed David J. Levenson (or any successor) (together with any successor,
the "Agent for Service"), as its authorized agent upon which process may be
served in any suit or proceeding arising out of or relating to this Indenture or
Warrants or the Underlying Securities, that may be instituted in any federal or
state court in the State of New York, or brought under federal or state
securities laws, and acknowledges that the Agent for Service has accepted such
designation, (ii) submits to the jurisdiction of any such court in any such suit
or proceeding, and (iii) agrees that service of process upon the Agent for
Service (or any successor) and written notice of said service to the Company
(mailed or delivered to its Chief Financial Officer at its principal office in
Toronto, Ontario, Canada), shall be deemed in every respect effective service of
process upon the Company in any such suit or proceeding. The Company further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of the Agent for Service in full force and effect so
long as any of the Warrants shall be outstanding.

         To the extent that the Company has or hereafter may acquire any
immunity from the jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.

1.7      SEVERABILITY

         If any provision of this Indenture shall be held by any court of
competent jurisdiction to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remaining provisions, or part thereof, of this Indenture and such
remaining provisions, or part thereof, shall remain enforceable and binding.

1.8      SCHEDULE

         The following schedule is attached to and forms part of this Indenture:

         Schedule A - Form of Warrant Certificate

<PAGE>
                                      -8-

                                    ARTICLE 2
                                ISSUE OF WARRANTS

2.1      ISSUE OF WARRANTS

         A maximum of 6,900,000 Warrants entitling the holders thereof to
purchase an aggregate maximum of 6,900,000 Common Shares (or such other kind and
amount of Underlying Securities determined pursuant to the provisions of
Sections 2.13 and 2.14, if applicable) are hereby created and authorized to be
issued hereunder upon the terms and conditions herein set forth. Certificates
evidencing the Warrants (the "WARRANT CERTIFICATES") shall be executed by the
Company and certified by or on behalf of the Trustee upon written order of the
Company and delivered by the Company in accordance with Sections 2.3 and 2.4.

2.2      FORM AND TERMS OF WARRANTS

   (a)   The Warrant Certificates shall be substantially in the form set out in
Schedule A hereto, shall be dated as of the date hereof (regardless of their
actual date of issue), shall be fully registered and shall have such
distinguishing letters and numbers as the Company may, with the approval of the
Trustee, prescribe and may include a translation into the French language.
Warrant Certificates may be typewritten, engraved, lithographed, printed or
mimeographed as the Company may determine. No change in the form of the Warrant
Certificate shall be required by reason of any adjustment made pursuant to this
Article 2.

   (b)   Each Warrant authorized to be issued hereunder shall entitle the holder
thereof to purchase (subject to Sections 2.13, 2.14 and 3.1), for the Exercise
Price, one Common Share, or such other kind and amount of Underlying Securities
calculated pursuant to the provisions of Sections 2.13 and 2.14, as the case may
be, at any time after the issuance of such Warrant and prior to the Expiry Time
in accordance with the provisions of this Indenture.

   (c)   Any legends to be typed on to the Warrant Certificates or the
Underlying Securities shall be typed thereon in accordance with the provisions
of this Indenture upon the written direction of the Company. The Trustee and the
Company shall have no duty to ensure that the Warrantholders comply with the
provisions of any such legend.

2.3      SIGNING OF WARRANT CERTIFICATES

         The Warrant Certificates shall be signed by any officer of the Company,
and may but need not be under the corporate seal of the Company or a
reproduction thereof. The signature of such officer may be mechanically
reproduced in facsimile, and Warrant Certificates bearing such facsimile
signatures shall be binding upon the Company as if they had been manually signed
by such officer. Notwithstanding that the person whose manual or facsimile
signature appears on any Warrant Certificate as such officer may no longer hold
office at the date of issue of such Warrant Certificate or at the date of
certification or delivery thereof, any Warrant Certificate signed as aforesaid
shall, subject to Section 2.4, be valid and binding upon the Company and the
registered holder thereof shall be entitled to the benefits of this Indenture.

<PAGE>
                                      -9-

2.4      CERTIFICATION BY THE TRUSTEE

   (a) No Warrant Certificate shall be issued or, if issued, shall be valid for
any purpose or entitle the registered holder to the benefit hereof or thereof
until it has been certified by manual signature by or on behalf of the Trustee
in the form of the certificate set out in Schedule A and such certification by
the Trustee upon any Warrant Certificate shall be conclusive evidence as against
the Company that the Warrant Certificate so certified has been duly issued
hereunder and the holder is entitled to the benefits hereof.

   (b) The certification of the Trustee on Warrant Certificates issued hereunder
shall not be construed as a representation or warranty by the Trustee as to the
validity of this Indenture or the Warrants (except the due certification
thereof), and the Trustee shall in no respect be liable or answerable for the
use made of the Warrants or any of them or of the consideration therefor except
as otherwise specified herein.

2.5      WARRANTHOLDER NOT A SHAREHOLDER, ETC.

         The holding of a Warrant shall not be construed as conferring upon a
Warrantholder any right or interest whatsoever as a Shareholder nor entitle the
holder to any right or interest in respect thereof (including the right to vote
at, to receive notice of or to attend meetings of Shareholders or any other
proceedings of the Company, or any right to receive dividends and other
distributions) except as expressly provided herein or in the Warrants.

2.6      ISSUE IN SUBSTITUTION FOR LOST WARRANT CERTIFICATES

   (a) In the case where any Warrant Certificate shall become mutilated or be
lost, destroyed or stolen, the Company, subject to applicable law and Section
2.6(b), shall issue and thereupon the Trustee shall certify and deliver a new
Warrant Certificate of like tenor as the one mutilated, lost, destroyed or
stolen in exchange for and in place of and upon cancellation of such mutilated
certificate, or in lieu of and in substitution for such lost, destroyed or
stolen certificate, and the substituted certificate shall be in a form approved
by the Trustee and shall be entitled to the benefits hereof and such substituted
certificate shall rank equally in accordance with its terms with all other
Warrant certificates issued or to be issued hereunder.

   (b) The applicant for the issue of a new Warrant Certificate pursuant to this
Section 2.6 shall bear the cost of the issue thereof and in case of loss,
destruction or theft shall, as a condition precedent to the issue thereof,
furnish to the Company and to the Trustee such evidence of ownership and of the
loss, destruction or theft of the certificate so lost, destroyed or stolen as
shall be satisfactory to the Company and to the Trustee in their sole
discretion, and such applicant also may be required to furnish an indemnity or
security in amount and form satisfactory to the Company and the Trustee in their
sole discretion and shall pay the reasonable charges of the Company and the
Trustee in connection therewith.

<PAGE>
                                     -10-

2.7      WARRANTS TO RANK PARI PASSU

         All Warrants shall rank PARI PASSU, whatever may be the actual date of
issue of the Warrant Certificates evidencing same.

2.8      REGISTER FOR WARRANTS

   (a) The Company hereby appoints the Trustee as registrar of the Warrants. The
Company may hereafter, with the consent of the Trustee, appoint one or more
additional registrars of the Warrants.

   (b) The Company shall cause to be kept by the Trustee at its principal office
in the City of Toronto, Ontario:

         (i)  a register of holders of Warrants in which shall be entered the
              names and addresses of the holders of the Warrants and of the
              number of Warrants held by them; and

         (ii) a register of transfers of Warrants in which shall be entered the
              date and other particulars of each transfer of Warrants.

   (c) No transfer of a Warrant shall be valid unless made by:

         (i)  the holder or his successors, executors, administrators or other
              legal representatives or his or their attorney duly appointed by
              an instrument in writing in form and execution satisfactory to the
              Trustee with signatures guaranteed by an Eligible Institution; or

         (ii) the liquidator of, or a trustee in bankruptcy for, a
              Warrantholder,

and in compliance with such reasonable requirements as the Trustee and the
Company may prescribe (including the requirement to provide evidence of
satisfactory compliance with applicable securities laws) and recorded on the
register of transfers maintained by the Trustee pursuant to Section 2.8(b), nor
until all stamp taxes or governmental or other charges arising by reason of such
transfer have been paid by the Warrantholder. Subject to the Trustee complying
with the provisions of this Indenture, the Trustee may assume compliance with
applicable securities laws unless otherwise notified in writing by the Company.

2.9      TRANSFEREE ENTITLED TO REGISTRATION

         The transferee of a Warrant shall, after the transfer form printed on
the Warrant Certificate and any other form of transfer acceptable to the Trustee
is duly completed and the Warrant is lodged with the Trustee at its principal
office in the City of Toronto, Ontario, or at the principal office of the U.S.
Agent in the Borough of Manhattan, City of New York, New York (or at such
additional place or places as may be designated by the Company from time to time

<PAGE>
                                     -11-

with the approval of the Trustee) and upon compliance with all other conditions
in that regard required by this Indenture or by law, be entitled to have his
name entered on the register of holders as the owner of such Warrant free from
all equities or rights of set-off or counterclaim between the Company and the
transferor or any previous holder of such Warrant, save in respect of equities
of which the Company or the transferee is required to take notice by statute or
by order of a court of competent jurisdiction.

2.10     REGISTERS OPEN FOR INSPECTION

         The registers referred to in Section 2.8 shall be open at all
reasonable times during business hours on a Business Day for inspection by the
Company, the Trustee or any Warrantholder. The Trustee shall, from time to time
when requested to do so by the Company, furnish the Company with a list of the
names and addresses of holders of Warrants entered in the register of holders
kept by the Trustee and showing the number of Underlying Securities that might
then be acquired upon the exercise of the Warrants held by each such holder.

2.11     EXCHANGE OF WARRANTS

   (a) Warrant Certificates may, upon compliance with the reasonable
requirements of a Trustee, be exchanged for Warrant Certificates in any other
authorized denomination representing in the aggregate the same number of
Warrants. The Company shall sign and the Trustee shall certify, in accordance
with Sections 2.3 and 2.4, all Warrant Certificates necessary to carry out the
exchanges contemplated herein.

   (b) Warrant Certificates may be exchanged at the principal stock and bond
transfer office of the Trustee in the City of Toronto, Ontario and may be
tendered for exchange at the principal office of the U.S. Agent in the Borough
of Manhattan, City of New York, New York or at any other place that is
designated by the Company with the approval of the Trustee. Any Warrant
Certificates tendered for exchange shall be surrendered to the Trustee and
cancelled.

   (c) No charge will be levied by the Company or the Trustee upon a presenter
of a Warrant Certificate pursuant to this Indenture for the transfer of any
Warrant or for the exchange of any Warrant Certificate but reimbursement to the
Trustee or the Company for any and all taxes or governmental or other charges
required to be paid shall be made by the person requesting such exchange as a
condition precedent to such exchange.

2.12     OWNERSHIP OF WARRANTS

         The Company and the Trustee shall deem and treat the registered holder
of any Warrant Certificate as the absolute owner of the Warrant represented
thereby for all purposes, and the Company and the Trustee shall not be affected
by any notice or knowledge to the contrary except where such person is required
to take notice by statute or by order of a court of competent jurisdiction.

<PAGE>
                                     -12-

2.13     ADJUSTMENT OF EXERCISE RIGHTS

         The Exercise Price per Common Share and the number of Common Shares
which may be subscribed for upon exercise of a Warrant shall be subject to
adjustment from time to time upon the occurrence of any of the events and in the
manner provided as follows:

   (a)   If and whenever at any time prior to the Expiry Time the Company shall:

         (i)   declare a dividend or make a distribution on its Common Shares in
               each case payable in Common Shares (or securities exchangeable
               for or convertible into Common Shares), or

         (ii)  subdivide or change its outstanding Common Shares into a greater
               number of Common Shares, or

         (iii) reduce, combine or consolidate its outstanding Common Shares into
               a lesser number,

         (any of such events in these clauses 2.13(a)(i), (ii) and (iii) being
         called a "SHARE REORGANIZATION"), then effective immediately after the
         record date or effective date, as the case may be, at which the holders
         of Common Shares are determined for the purposes of the Share
         Reorganization, the Exercise Price shall be adjusted to a price
         determined by multiplying the applicable Exercise Price in effect on
         such effective date or record date by a fraction, the numerator of
         which shall be the number of Common Shares outstanding on such
         effective date or record date before giving effect to such Share
         Reorganization and the denominator of which shall be the number of
         Common Shares outstanding immediately after giving effect to such Share
         Reorganization (including, in the case where securities exchangeable
         for or convertible into Common Shares are distributed, the number of
         additional Common Shares that would have been outstanding had such
         securities been exchanged for or converted into Common Shares
         immediately after giving effect to such Share Reorganization).

   (b)   If and whenever at any time prior to the Expiry Time the Company shall
         fix a record date for the issuing of rights, options or warrants to all
         or substantially all of the holders of the Common Shares entitling them
         for a period expiring not more than 45 days after such record date (the
         "RIGHTS PERIOD") to subscribe for or purchase Common Shares (or
         securities convertible into or exchangeable for Common Shares) at a
         price per share (or having a conversion or exchange price per share)
         which is less than 95% of the Current Market Price per Common Share on
         the record date for such issue (any of such events being called a
         "RIGHTS OFFERING"), then effective immediately after the end of the
         Rights Period the Exercise Price shall be adjusted to a price
         determined by multiplying the applicable Exercise Price in effect at
         the end of the Rights Period by a fraction the numerator of which shall
         be the sum of:

<PAGE>
                                     -13-

         (i)  the number of Common Shares outstanding as of the record date for
              the Rights Offering, and

         (ii) a number determined by dividing (A) either the product of (i) the
              number of Common Shares issued during the Rights Period upon
              exercise of the rights, warrants or options under the Rights
              Offering and (ii) the price at which such Common Shares are
              issued, or, as the case may be, the product of (iii) the number of
              Common Shares for or into which the convertible or exchangeable
              securities issued during the Rights Period upon exercise of the
              rights, warrants or options under the Rights Offering are
              exchangeable or convertible and (iv) the exchange or conversion
              price of the convertible or exchangeable securities so issued, by
              (B) the Current Market Price per Common Share as of the record
              date for the Rights Offering, and

         the denominator of which shall be the number of Common Shares
         outstanding (including the number of Common Shares actually issued or
         subscribed for during the Rights Period upon exercise of the rights,
         warrants or options under the Rights Offering) or which would be
         outstanding upon the conversion or exchange of all convertible or
         exchangeable securities issued during the Rights Period upon exercise
         of the rights, warrants or options under the Rights Offering, as
         applicable, in each case after giving effect to the Rights Offering.

         Common Shares owned by or held (otherwise than as security) for the
         account of the Company or any subsidiary of the Company shall be deemed
         not to be outstanding for the purpose of any such computation. In order
         to give effect to the provisions of Section 2.13(f) in the
         circumstances described below, any holder who shall have exercised his
         right to purchase Common Shares during the period beginning immediately
         after the record date for a Rights Offering and ending on the last day
         of the Rights Period therefor, in addition to the Common Shares to
         which he is otherwise entitled upon such exercise, shall be entitled to
         that number of additional Common Shares equal to the result obtained
         when the difference, if any, between the Exercise Price per Common
         Share in effect immediately prior to the end of such Rights Offering
         and the Exercise Price per Common Share, as adjusted for such Rights
         Offering pursuant to this Section 2.13(b), is multiplied by the number
         of Common Shares purchased upon exercise of the Warrant held by such
         holder during such period, and the resulting product is divided by the
         Exercise Price per Common Share, as adjusted for such Rights Offering
         pursuant to this Section 2.13(b). Such additional Common Shares shall
         be deemed to have been issued to the holder immediately following the
         end of the Rights Period and a certificate for such additional Common
         Shares shall be delivered to such holder within 10 Business Days
         following the end of the Rights Period.

   (c)   If and whenever at any time prior to the Expiry Time the Company shall
         fix a record date for the payment, issue or distribution to all or
         substantially all of the

<PAGE>
                                     -14-

         holders of the Common Shares of (i) a dividend, (ii) cash or assets
         (including evidences of the Company's indebtedness), or (iii) rights,
         options, warrants or other securities (including securities convertible
         into or exchangeable for Common Shares), and such payment, issue or
         distribution does not constitute a Dividend Paid in Ordinary Course, a
         Share Reorganization or a Rights Offering (any of such non-excluded
         events being herein called a "SPECIAL DISTRIBUTION"), the Exercise
         Price shall be adjusted effective immediately after such record date to
         a price determined by multiplying the applicable Exercise Price in
         effect on such record date by a fraction:

         (i)  the numerator of which shall be:

              (A) the product of the number of Common Shares outstanding on such
                  record date and the Current Market Price per Common Share on
                  such record date; less

              (B) the fair market value, as determined in good faith by action
                  of the directors (whose determination shall be conclusive), to
                  the holders of the Common Shares of such dividend, cash,
                  assets, rights or securities so paid, issued or distributed
                  less the fair market value, as determined in good faith by
                  action of the directors (whose determination shall be
                  conclusive), of the consideration, if any, received therefor
                  by the Company, and

         (ii) the denominator of which shall be the number of Common Shares
              outstanding on such record date multiplied by the Current Market
              Price per Common Share on such record date.

         Such adjustment shall be made successively whenever such a record date
         is fixed. To the extent that such payment, issuance or distribution is
         not so made, the Exercise Price shall be readjusted effective
         immediately to the Exercise Price which would then be in effect based
         upon such payment, issuance or distribution actually made.

   (d)   If and whenever at any time prior to the Expiry Time an issuer bid or a
         tender or exchange offer (other than an odd lot offer or a normal
         course issuer bid) made by the Company or a subsidiary of the Company
         to all or substantially all of the shareholders of the Company for all
         or any portion of the Common Shares where the cash and the value of any
         other consideration included in such payment per Common Share exceeds
         the Current Market Price per Common Share on the Trading Day
         immediately preceding the commencement of the issuer bid or tender or
         exchange offer (any such issuer bid or tender or exchange offer being
         called an "Issuer Bid"), the Exercise Price shall be adjusted to a
         price determined by multiplying the applicable Exercise Price in effect
         on the date of the completion of such Issuer Bid by a fraction, the
         numerator of which shall be the

<PAGE>
                                     -15-

         product of (i) the number of Common Shares outstanding immediately
         prior to the completion of the Issuer Bid (without giving effect to any
         reduction in respect of any tendered or exchanged shares) and, (ii) the
         Current Market Price per Common Share on the Trading Day immediately
         preceding the commencement of the Issuer Bid, and the denominator of
         which shall be the sum of (i) the fair market value (determined in good
         faith by the board of directors of the Company whose determination
         shall be conclusive and described in a resolution of the board of
         directors of the Company) of the aggregate consideration paid by the
         Company or subsidiary to holders of Common Shares upon the completion
         of such Issuer Bid, and (ii) the product of (A) the difference between
         the number of Common Shares outstanding immediately prior to the
         completion of the Issuer Bid (without giving effect to any reduction in
         respect of tendered or exchanged shares) and the number of Common
         Shares actually purchased by the Company or subsidiary pursuant to the
         Issuer Bid, and (B) the Current Market Price Per Common Share on the
         Trading Day immediately preceding the commencement of the Issuer Bid.

   (e)   If and whenever at any time prior to Expiry Time there shall be a
         reorganization, reclassification or other change of Common Shares
         outstanding at such time or change of the Common Shares into other
         shares or into other securities (other than a Share Reorganization), or
         a consolidation, amalgamation, arrangement or merger of the Company
         with or into any other corporation or other entity (other than a
         consolidation, amalgamation, arrangement or merger which does not
         result in any reclassification of the outstanding Common Shares or a
         change of the Common Shares into other shares), or a sale, conveyance
         or transfer of the undertaking or assets of the Company as an entirety
         or substantially as an entirety to another corporation or entity in
         which the holders of Common Shares are entitled to receive shares,
         other securities or property, including cash (any of such events being
         herein called a "CAPITAL REORGANIZATION"), any holder who exercises his
         right to subscribe for and purchase Common Shares pursuant to the
         exercise of Warrants after the effective date of such Capital
         Reorganization shall be entitled to receive, and shall accept for the
         same aggregate consideration in lieu of the number of Common Shares to
         which such holder was theretofore entitled upon such exercise, the
         aggregate number of shares, other securities or other property which
         such holder would have received as a result of such Capital
         Reorganization had he exercised his right to acquire Underlying
         Securities immediately prior to the effective date or record date, as
         the case may be, of the Capital Reorganization and had he been the
         registered holder of such Underlying Securities on such effective date
         or record date, as the case may be, subject to adjustment thereafter in
         accordance with provisions the same, as nearly as may be possible, as
         those contained in Sections 2.13(b) and (c) hereof. If determined
         appropriate by the directors, acting in good faith, appropriate
         adjustments shall be made as a result of any such Capital
         Reorganization in the application of the provisions set forth in this
         Section 2.13, with respect to the rights and interests thereafter of
         the holder of a Warrant to the end that the provisions set forth in
         this

<PAGE>
                                     -16-

         Section 2.13 shall thereafter correspondingly be made applicable as
         nearly as may be reasonably possible in relation to any shares, other
         securities or other property thereafter deliverable upon the exercise
         of the Warrant. Any such adjustment shall be made by and set forth in
         an agreement supplemental hereto approved by action of the directors,
         acting in good faith, and shall for all purposes be conclusively deemed
         to be an appropriate adjustment.

   (f)   If and whenever at any time prior to the Expiry Time there shall occur
         a Share Reorganization, a Rights Offering, a Special Distribution or an
         Issuer Bid and any such event results in an adjustment to the Exercise
         Price pursuant to the provisions of this Section 2.13, the number of
         Common Shares purchasable upon the exercise of each Warrant (at the
         adjusted Exercise Price) shall be adjusted contemporaneously with the
         adjustment of the Exercise Price by multiplying the number of Common
         Shares theretofore purchasable on the exercise thereof by a fraction,
         the numerator of which shall be the applicable Exercise Price in effect
         immediately prior to such adjustment and the denominator of which shall
         be the applicable Exercise Price resulting from such adjustment.

   (g)   In case the Company after the date of issue of the Warrants shall take
         any action affecting the Common Shares, other than action described in
         this Section 2.13, which in the opinion of the directors, acting
         reasonably, would materially adversely affect the rights of the
         Warrantholders, the Exercise Price or the number of Common Shares
         purchasable upon the exercise of each Warrant shall be adjusted in such
         manner, if any, and at such time, by action of the directors, acting
         reasonably, as they may determine to be equitable in the circumstances,
         but subject in all cases to any necessary regulatory approvals.

2.14     ADJUSTMENT RULES

         For the purposes of Section 2.13, any adjustment shall be made
successively whenever an event referred to therein shall occur, subject to the
following provisions:

   (a)   all calculations shall be made to the nearest 1/100th of a Common
         Share;

   (b)   no adjustment to an Exercise Price shall be required unless such
         adjustment would result in a change of at least one per cent in the
         prevailing Exercise Price and no adjustment shall be made in the number
         of Common Shares which may be subscribed for upon exercise of the
         Warrant unless it would require a change of at least 1/100th of a
         Common Share; provided, however, that any adjustments which, except for
         the provisions of this Section 2.14(b) would otherwise have been
         required to be made shall be carried forward and taken into account in
         any subsequent adjustment;

   (c)   if any question shall arise with respect to adjustments provided for in
         this Article 2, such question shall, absent manifest error, be
         conclusively determined

<PAGE>
                                     -17-

         by a firm of chartered accountants appointed by the Company (who may be
         the Company's auditors) and acceptable to the Trustee, acting
         reasonably; such chartered accountants shall have access to all
         necessary records of the Company and such determination shall be
         binding on the Company, the Trustee and the Warrantholders, absent
         manifest error. In the event that any such determination is made, the
         Company shall deliver a certificate to the Trustee describing such
         determination and confirming such consent;

   (d)   if the Company shall set a record date to determine the holders of its
         Common Shares for the purpose of entitling them to receive any dividend
         or distribution or any subscription or purchase rights, options or
         warrants and shall thereafter and before the distribution to such
         Shareholders of any such dividend, distribution or subscription or
         purchase rights legally abandon its plan to pay or deliver such
         dividend, distribution or subscription or purchase rights, then no
         adjustment in the Exercise Price or the number of Common Shares
         purchasable upon exercise of the warrant shall be required by reason of
         the setting of such record date; and

   (e)   as a condition precedent to the taking of any action which would
         require any adjustment in any of the subscription rights pursuant to
         any of the Warrants, the Company shall take any corporate action which
         may, in the opinion of counsel, be necessary in order that the Company
         have unissued and reserved in its authorized capital, and may validly
         and legally issue as fully paid and non-assessable, all of the
         Underlying Securities that the Warrantholders are entitled to receive
         on full exercise thereof in accordance with the provisions hereof.

2.15     POSTPONEMENT OF SUBSCRIPTION

         In any case where the application of Section 2.13 results in an
increase in the number of Common Shares issuable upon the exercise of the
Warrants taking effect immediately after the record date for a specific event,
if any Warrant is exercised after that record date and prior to completion of
the event, the Company may postpone the issuance to the holder of the Warrant of
the Common Shares to which such Warrantholder is entitled by reason of such
adjustment but such Common Shares shall be so issued and delivered to that
holder upon completion of that event, with the number of such Common Shares
calculated on the basis of the number of Common Shares on the date that the
Warrant was adjusted for completion of that event and the Company shall deliver
to the person or persons in whose name or names the Common Shares are to be
issued an appropriate instrument evidencing the right of such person or persons
to receive such Common Shares and the right to receive any dividends or other
distributions which, but for the provisions of this Section 2.15, such person or
persons would have been entitled to receive in respect of such Common Shares
from and after the date that the Warrant was exercised in respect thereof.

<PAGE>
                                     -18-

2.16     NOTICE OF ADJUSTMENT OF EXERCISE RIGHTS

   (a)   At least 10 days prior to the effective date or record date, as the
         case may be, of any event that requires or that may require an
         adjustment in any of the exercise rights pursuant to any of the
         Warrants, including the number of Underlying Securities that may be
         acquired upon the exercise thereof, the Company shall:

         (i)  file with the Trustee a certificate of the Company specifying the
              particulars of such event (including the record date or the
              effective date for such event) and, if determinable, the required
              adjustment and the computation of such adjustment; and

         (ii) give notice to the Warrantholders of the particulars of such event
              (including the record date or the effective date for such event)
              and, if determinable, the required adjustment, in accordance with
              the provisions set out in Section 9.1.

   (b)   In case any adjustment for which a notice in Section 2.16(a) has been
         given is not then determinable, the Company shall promptly after such
         adjustment is determinable:

         (i)  file a certificate of the Company with the Trustee showing how
              such adjustment was computed; and

         (ii) give notice to the Warrantholders of the adjustment , in
              accordance with the provisions set out in Section 9.1.

   (c)   The Trustee may act and rely for all purposes upon any certificates and
         any other documents filed by the Company pursuant to this Section 2.16.

2.17     NO ACTION AFTER NOTICE

         The Company shall not take any other corporate action that might
deprive any Warrantholder of the opportunity to exercise Warrants during the
10-day period after the giving of the notice set forth in Section 2.16(a).

2.18     NO DUTY TO INQUIRE

         Except as provided in Section 8.2, the Trustee shall not at any time be
under any duty or responsibility to any Warrantholder to determine whether any
facts exist which may require any adjustment contemplated by Sections 2.13 and
2.14, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed in making the same. The Trustee shall not
be accountable with respect to the validity or value (or the kind or amount) of
any securities or property which may at any time be issued or delivered upon the
exercise of any Warrant.

<PAGE>
                                     -19-

2.19     RIGHTS ISSUED IN RESPECT OF UNDERLYING SECURITIES ISSUED ON EXERCISE

         Each Common Share issued on the exercise of Warrants shall be entitled
to receive the appropriate number of purchase rights ("Rights"), if any, that
all Common Shares are entitled to receive, and the certificates representing
such Common Shares shall bear such legends, if any, in each case as may be
provided by the terms of any shareholder rights agreement adopted by the
Company, as the same may be amended from time to time (a "Rights Agreement")
provided that such Rights Agreement requires that each Common Share issued on
exercise of Warrants at any time prior to the distribution of separate
certificates representing the Rights be entitled to receive such Rights, then,
not withstanding anything else to the contrary in this Indenture, there shall
not be any adjustment made pursuant to this Article 2 as a result of the
issuance of Rights, the distribution of separate certificates representing the
Rights, the exercise or redemption of such Rights in accordance with any such
Rights Agreement, or the termination or invalidation of such Rights.

                                   ARTICLE 3
                              EXERCISE OF WARRANTS

3.1      METHOD OF EXERCISE OF WARRANTS

   (a) Subject to Section 3.1(b), the holder of any Warrant may during the
Exercise Period exercise the right thereby conferred on such holder to purchase
the Underlying Securities to which such Warrant entitles the holder, by
surrendering the certificate representing such Warrant to the Trustee at any
time during the Exercise Period at its principal office in the City of Toronto,
Ontario or at the principal office of the U.S. Agent in the Borough of
Manhattan, City of New York, New York (or at such additional place or places as
may be decided by the Company from time to time with the approval of the
Trustee), with: (i) a duly completed and executed exercise form substantially in
the form set out on the Warrant Certificate; and (ii) a certified cheque, bank
draft or money order payable at par to or to the order of Agnico-Eagle Mines
Limited in an amount equal to the Exercise Price multiplied by the number of
Underlying Securities subscribed for. A Warrant Certificate with the duly
completed and executed exercise form shall be deemed to be surrendered only upon
personal delivery thereof to, or if sent by mail or other means of transmission
upon actual receipt thereof by, the Trustee. If the holder subscribes for a
lesser number of Underlying Securities than the aggregate number of Underlying
Securities then issuable pursuant to the exercise of the Warrants represented by
the Warrant Certificate surrendered, the holder shall be entitled to receive a
further Warrant Certificate in respect of the Warrants represented by the
Warrant Certificates that have not been exercised. Any such surrender for
exercise shall be irrevocable.

   (b) Notwithstanding any provision to the contrary contained in this
Indenture, no U.S. Person or person holding such Warrant for the account of a
U.S. Person shall exercise any Warrant at any time when no Registration
Statement is effective. If no Registration Statement is effective, all Warrants
held by U.S. Persons or persons holding such Warrants for the account of U.S.
Persons shall immediately cease to be exercisable for so long as the
Registration Statement

<PAGE>
                                     -20-

is not effective and such Warrants are held by U.S. Persons or persons holding
such Warrants for the account of U.S. Persons. If no Registration Statement is
effective at any time when any Warrant is exercised, as a condition of the
exercise of such Warrant the Company may require that the holder of such Warrant
provide such evidence that it is not a U.S. Person or person holding such
Warrant for the account of a U.S. Person as the Company shall reasonably
request; provided that if the Company, acting reasonably, is not satisfied in
such circumstance that the holder is not a U.S. Person or person holding such
Warrant for the account of a U.S. Person, such Warrantholder shall be notified
forthwith by the Trustee that such Warrantholder is entitled, at his or her
option, to redeem his or her Warrant, in whole or in part, in accordance with
Section 3.4.

   (c) Any exercise form referred to in Section 3.1(a) shall be signed by the
Warrantholder and shall specify the person or persons in whose name or names the
Underlying Securities to be issued upon exercise are to be registered, such
person's or persons' address or addresses and the number of Underlying
Securities to be issued to each person if more than one is so specified. If any
of the Underlying Securities issuable upon the exercise of Warrants by a holder
are to be issued to a person or persons other than the Warrantholder, the
signature(s) set out in the exercise form referred to in Section 3.1(a) shall be
guaranteed by an Eligible Institution, and the Warrantholder shall pay to the
Company or the Trustee all applicable transfer or similar taxes and the Company
shall not be required to issue or deliver certificates evidencing Underlying
Securities unless or until such Warrantholder shall have paid to the Company or
the Trustee on behalf of the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid or
that no tax is due. No such Underlying Securities shall be issued to any U.S.
Person at any time when the Registration Statement is not effective, and during
such period such U.S. Person shall be entitled to the redemption right set out
in Section 3.4.

   (d) Any Warrantholder may elect to make payment of the Exercise Price
pursuant to Section 3.1(a) in Canadian dollars. In such an event, the Exercise
Price payable by such Warrantholder shall be the Canadian dollar equivalent of
the Exercise Price payable in Canadian dollars based on the Exchange Rate on the
Business Day immediately preceding the date on which the relevant Warrant is
exercised, rounded to the nearest tenth of a cent. At the request of the
Trustee, the Company shall provide a certificate to the Trustee setting out the
applicable Exchange Rate.

3.2      EXPIRATION OF WARRANTS

   (a) After the Expiry Time, all rights under any Warrant in respect of which
the right of subscription and purchase herein and therein provided for shall not
theretofore have been exercised shall wholly cease and terminate, and such
Warrant shall be void and of no effect.

   (b) Not less than 90 and not more than 120 days prior to the Expiry Date
the Company shall issue a press release and publish a notice in a newspaper
of general circulation in the City of Toronto, Ontario and a newspaper of
general circulation in the City of New York, New York to the effect that the
Warrants will terminate and become void as of the Expiry Time; provided that
accidental failure to issue such press release or publish such notice shall
not extend the Exercise Period or give rise to any claim against or liability
of the Company whatsoever arising from such failure.

3.3      EFFECT OF EXERCISE OF WARRANTS

   (a) Upon compliance by the Warrantholder with the provisions of Section 3.1,
the Underlying Securities issuable upon the exercise of the Warrants shall be
deemed to have been

<PAGE>
                                     -21-

issued and the person to whom such Underlying Securities are to be issued shall
be deemed to have become the holder of record of such Underlying Securities on
the Exercise Date unless the transfer registers of the Company for the
Underlying Securities shall be closed on such date, in which case the Underlying
Securities subscribed for shall be deemed to have been issued and such person
shall be deemed to have become the holder of record of such Underlying
Securities on the date on which such transfer registers are reopened.

   (b) Forthwith following the due exercise by a Warrantholder in accordance
with Section 3.1 and the surrender of the Warrant Certificate(s) representing
such Warrants as required by the terms thereof, the Trustee shall deliver to the
Company a notice setting out the particulars of the Warrants exercised, the
person in whose name the Underlying Securities are to be issued and the address
of such person.

   (c) Funds in an amount equal to the aggregate Exercise Price of the Warrants
exercised shall be forwarded by the Trustee to the Company forthwith upon the
exercise of the Warrants.

   (d) Within three Business Days of receipt of the notice referred to in
Section 3.3(b), the Company shall cause to be mailed to the person in whose name
the Underlying Securities issuable upon the exercise of the Warrants are to be
issued, as specified in the completed exercise form attached to the Warrant
Certificate, at the address specified in such exercise form, or, if so specified
in such exercise form, cause to be made available for pick-up by such person at
the office of the Trustee or cause to be mailed to the office of the U.S. Agent
to be made available for pick-up by such person, a certificate or certificates
for the Underlying Securities to which the Warrantholder is entitled. In
addition, if it is required by law, the Company shall cause to be delivered to
any U.S. Person in whose name the Underlying Securities issuable upon the
exercise of the Warrants are to be issued a prospectus that complies with
section 9 of the 1933 Act.

3.4      REDEMPTION OF WARRANTS HELD BY U.S. PERSONS

   (a) If the Registration Statement ceases to be effective, prior to the Expiry
Time and for so long as the Registration Statement is not effective, subject to
applicable law any holder of any Warrant that is a U.S. Person may, at its
option, cause the Company to redeem such Warrant by surrendering the certificate
representing such Warrant at any time during such period to the Trustee at its
principal office in the City of Toronto, Ontario or at the principal office of
the U.S. Agent in the Borough of Manhattan, City of New York, New York (or at
such additional place or places as may be designated by the Company from time to
time with the approval of the Trustee), with a duly completed and executed
Redemption Form. As a condition of such redemption, the Company may require that
the holder of such Warrant provides such evidence that it is a U.S. Person as
the Company shall reasonably request, provided that if the Company, acting
reasonably, is not satisfied in such circumstance that such Warrantholder is a
U.S. Person or person holding such Warrant for the account of a U.S. Person,
such Warrantholder shall be notified forthwith by the Trustee that such
Warrantholder is entitled to exercise his or her Warrant, in whole or in part,
in accordance with Section 3.1. A Warrant Certificate with the duly

<PAGE>
                                     -22-

completed and executed redemption form shall be deemed to be surrendered only
upon personal delivery thereof to, or sent by mail or other means of
transmission upon actual receipt thereof by, the Trustee, such date of actual
receipt by the Trustee being referred to as the "Redemption Date". If the holder
exercises the redemption right provided for in this Section 3.4(a) in respect of
a lesser number of Warrants than the aggregate number of Warrants represented by
the Warrant Certificate surrendered, the holder shall be entitled to receive a
further Warrant Certificate in respect of the Warrants represented by the
Warrant Certificates that have not been redeemed. Any such surrender for
redemption shall be irrevocable.

   (b) Forthwith following the due exercise by a Warrantholder of the redemption
right in accordance with Section 3.4(a), the Trustee shall deliver to the
Company a notice setting out the particulars of the Warrants to be redeemed and
the name and address of the Warrantholder.

   (c) Within three Business Days of receipt of the notice referred to in
Section 3.4(b), the Company shall cause a cheque in the amount of money
determined by multiplying the number of Common Shares that would have been
issued if the Warrants to be redeemed were exercised on the Redemption Date by
the difference between the Current Market Price per Common Share on the Trading
Day immediately preceding the Redemption Date and the Exercise Price on the
Redemption Date to be mailed to such Warrantholder at the address specified in
such redemption form, or, if so specified in such redemption form, to be made
available for pick-up by such Warrantholder at the office of the Trustee or
cause to be mailed to the office of the U.S. Agent to be made available for
pick-up by such Warrantholder.

3.5      CANCELLATION OF WARRANT CERTIFICATES

         All Warrant Certificates surrendered to the Trustee pursuant to Section
2.6, 2.11, 3.1, 3.4 or 9.7 shall be cancelled by the Trustee and the Trustee
shall record the cancellation of such Warrant Certificates on the register of
holders maintained by the Trustee pursuant to Section 2.8. The Trustee shall, if
required by the Company, furnish the Company with a certificate identifying the
Warrant Certificates so cancelled and deemed to have been cancelled. All
Warrants represented by Warrant Certificates that have been cancelled or have
been deemed to have been cancelled pursuant to this Section 3.5 shall be without
further force or effect whatsoever.

3.6      NO FRACTIONAL SHARES

         Notwithstanding anything herein contained, including any adjustment
provided for in Article 2, the Company shall not be required, upon the exercise
of any Warrants, to issue fractional Underlying Securities or to distribute
certificates which evidence fractional Underlying Securities. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Warrantholder, the number of full Underlying Securities shall be issuable upon
the exercise thereof shall be computed on the basis of the aggregate number of
Underlying Securities purchasable on exercise of the Warrants so presented. If
any fraction of an Underlying Security would, except for the provisions of this
Section 3.6, be issuable upon the exercise of any such Warrants (or specified
portion thereof), the Company shall notify the Trustee in writing of the

<PAGE>
                                     -23-

amount to be paid in lieu of a fraction of an Underlying Security and
concurrently pay or provide to the Trustee for payment to the Warrantholder, an
amount in cash equal to the Current Market Price per Common Share on the Trading
Day immediately preceding the day the Warrant is surrendered for exercise,
multiplied by such fraction, computed to the nearest whole cent.

3.7      SECURITIES RESTRICTIONS; LEGENDS

         Notwithstanding any provision to the contrary contained in this
Indenture, no Common Shares will be issued pursuant to the exercise of any
Warrant if the issuance of such securities would constitute a violation of the
securities laws of any applicable jurisdiction, and, without limiting the
generality of the foregoing, the Company will legend the certificates
representing the Common Shares if, in the opinion of counsel to the Company such
legend is necessary in order to avoid a violation of any securities laws of any
applicable jurisdiction or to comply with the requirements of any stock exchange
on which the Common Shares are listed, provided that if, at any time, in the
opinion of outside counsel to the Company, acting reasonably, such legends are
no longer necessary in order to avoid a violation of any such laws, or the
holder of any such legended certificate, at his expense, provides the Company
with evidence satisfactory in form and substance to the Company (which may
include an opinion of counsel of recognized standing satisfactory to the
Company) to the effect that such holder is entitled to sell or otherwise
transfer such securities in a transaction in which such legends are not
required, such legended certificates may thereafter be surrendered to the
Company in exchange for a certificate which does not bear such legends. For
greater certainty, should no Registration Statement be effective, the Company
shall permit the redemption of Warrants held by U.S. Persons as set forth in
Section 3.4 and shall not be permitted to issue legended Underlying Securities
in lieu thereof.

                                    ARTICLE 4
                                    COVENANTS

4.1      GENERAL COVENANTS

         The Company covenants with the Trustee that so long as any Warrants
remain outstanding:

   (a)   It will at all times maintain its corporate existence and carry on and
         conduct its business in a proper and business-like manner;

   (b)   It will reserve a sufficient number of Common Shares to satisfy the
         rights of acquisition provided for herein.

   (c)   It will cause the Common Shares from time to time subscribed and paid
         for pursuant to the Warrants in the manner herein provided and the
         certificates representing such Common Shares to be duly issued and
         delivered in accordance with the Warrants and the terms hereof.

<PAGE>
                                     -24-

   (d)   All Common Shares that shall be issued upon exercise of the right to
         purchase provided for herein, upon payment of the Exercise Price, shall
         be issued as fully paid and non-assessable.

   (e)   It will use its best efforts to maintain the listing of the Warrants on
         the TSX.

   (f)   It will use its reasonable efforts to effect and maintain the quotation
         of the Warrants on Nasdaq.

   (g)   It will use its reasonable efforts to maintain the listing of the
         Common Shares on the TSX and the NYSE.

   (h)   It will use its reasonable efforts to maintain its status as a
         reporting issuer or equivalent not in default, and not be in default in
         any material respect of the applicable requirements of, the applicable
         securities laws of each of the provinces of Canada and the federal
         securities laws of the United States.

   (i)   If at any time no Registration Statement is effective, the Company will
         give notice to the Trustee forthwith and will give notice, in
         accordance with the provisions set out in Section 9.1, together with a
         form for the exercise of the redemption right set out in Section 3.4
         (the "Redemption Form") to each Warrantholder having an address in the
         United States shown on the register of holders of Warrants kept by the
         Trustee pursuant to Section 2.8 of such fact as soon as reasonably
         practicable, but in any event such notice must be sent within
         5 Business Days, after learning that no Registration Statement is
         effective. Such notice must be sent by fax if possible to any
         securities depositary that is a registered holder.

   (j)   It will use its reasonable efforts to maintain the Registration
         Statement continuously effective under the 1933 Act.

   (k)   If, in the opinion of outside counsel, any instrument is required to be
         filed with, or any permission, order or ruling is required to be
         obtained from any securities administrator, regulatory agency or
         governmental authority in Canada or the United States or any other step
         is required under any federal or provincial law of Canada or any
         federal or state law of the United States before the Underlying
         Securities may be issued or delivered to a Warrantholder, the Company
         will use its reasonable efforts to file such instrument, obtain such
         permission, order or ruling or take all such other actions, at its
         expense, as are required.

   (l)   It will perform all its covenants and carry out all of the acts or
         things to be done by it as provided in this Indenture.

         The Company and the Trustee acknowledge and agree that: (i) none of the
foregoing covenants shall be interpreted or applied so as to prohibit or
restrict or otherwise limit the Company's ability, right and authority to
implement one or more of the actions contemplated by Section 2.13 or 7.2; and
(ii) the foregoing covenants shall be interpreted and applied

<PAGE>
                                     -25-

following each such action with reference to any successor to the Company and
with reference to any securities into which the Common Shares and/or the
Warrants may be changed or for which they may be exercisable as a result of such
action or actions.

4.2      TRUSTEE REMUNERATION AND EXPENSES

         The Company covenants that it will pay to the Trustee the fees agreed
to by the Company and the Trustee from time to time for its services hereunder
and will pay or reimburse the Trustee upon its request for all reasonable
expenses and disbursements of the Trustee in the administration or execution of
the trusts hereby created (including the reasonable compensation and the
disbursements of its counsel and all other advisers, experts, accountants and
assistants not regularly in its employ) both before any default hereunder and
thereafter until all duties of the Trustee hereunder shall be finally and fully
performed, except any such expense or disbursement in connection with or related
to or required to be made as a result of the negligence, wilful misconduct or
bad faith of the Trustee.

4.3      PERFORMANCE OF COVENANTS BY TRUSTEE

         If the Company should fail to perform any of its covenants contained in
this Indenture and the Company has not rectified such failure within 15 Business
Days after receiving written notice from the Trustee of such failure, the
Trustee may notify the Warrantholders of such failure on the part of the Company
or may itself perform any of the said covenants capable of being performed by
it, but shall be under no obligation to perform said covenants or to notify the
Warrantholders of such performance by it. All reasonable sums expended or
disbursed by the Trustee in so doing shall be repayable as provided in Section
4.2. No such performance, expenditure or disbursement by the Trustee shall be
deemed to relieve the Company of any default hereunder or of its continuing
obligations under the covenants herein contained.

                                    ARTICLE 5
                                   ENFORCEMENT

5.1      SUITS BY WARRANTHOLDERS

         All or any of the rights conferred upon a Warrantholder by the terms of
this Indenture may be enforced by such Warrantholder by appropriate legal
proceedings, but subject to the rights that are hereby conferred upon the
Trustee and subject to the provisions of Section 6.10. No Warrantholder shall
have any right to institute any action, suit or proceeding at law or in equity
for the purpose of enforcing the execution of any trust or power hereunder or
for the appointment of a liquidator or receiver or for a receiving order under
the BANKRUPTCY AND INSOLVENCY ACT (Canada) or to have the Company wound up or to
file a proof of claim in any liquidation or bankruptcy proceedings or for any
other remedy hereunder unless: (i) the Warrantholders by Extraordinary
Resolution shall have made a request to the Trustee and the Trustee shall have
been afforded reasonable opportunity to proceed to complete any action or suit
for any such purpose whether or not on its own; (ii) the Warrantholders or any
of them shall

<PAGE>
                                     -26-

have furnished to the Trustee, once requested by the Trustee, sufficient funds
or security and indemnity satisfactory to it against costs, expenses and
liabilities to be incurred therein or thereby; and (iii) the Trustee shall have
failed to act within a reasonable time or the Trustee shall have failed to have
actively pursued any such action, suit or proceeding.

5.2      IMMUNITY OF SHAREHOLDERS, ETC.

         The Trustee and, by the acceptance of the Warrant Certificates and as
part of the consideration for the issue of the Warrants, the Warrantholders
hereby waive and release any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any person in his capacity as an
incorporator or any past, present or future Shareholder or other securityholder,
director, officer, employee or agent of the Company for the creation and issue
of the Underlying Securities pursuant to any Warrant or on any covenant,
agreement, representation or warranty by the Company contained herein or in the
Warrant Certificates.

5.3      LIMITATION OF LIABILITY

         The obligations hereunder are not personally binding upon, nor shall
resort hereunder be had to, the directors or shareholders of the Company or any
of the past, present or future directors or shareholders of the Company or any
of the past, present or future officers, employees or agents of the Company, but
only the property of the Company shall be bound in respect hereof.

                                    ARTICLE 6
                           MEETINGS OF WARRANTHOLDERS

6.1      RIGHT TO CONVENE MEETINGS

         The Trustee may at any time and from time to time, and shall on receipt
of a written request of the Company or of a Warrantholders' Request, convene a
meeting of the Warrantholders, provided that the Trustee is indemnified and
funded to its reasonable satisfaction by the Company or by the Warrantholders
signing such Warrantholders' Request against the costs, charges, expenses and
liabilities that may be incurred in connection with the calling and holding of
such meeting. If within 15 Business Days after the receipt of a written request
of the Company or a Warrantholders' Request and funding and indemnity given as
aforesaid the Trustee fails to give the requisite notice specified in Section
6.2 to convene a meeting, the Company or such Warrantholders, as the case may
be, may convene such meeting. Every such meeting shall be held in the City of
Toronto, Ontario or at such other place in Canada or the United States as may be
approved by the Trustee.

6.2      NOTICE

         At least 15 days' prior notice of any meeting of Warrantholders shall
be given to the Warrantholders in the manner provided for in Section 9.1, and a
copy of such notice shall be delivered to the Trustee unless the meeting has
been called by it and to the Company unless the

<PAGE>
                                     -27-

meeting has been called by it. Such notice shall state the time and place of the
meeting, the general nature of the business to be transacted and shall contain
such information as is reasonably necessary to enable the Warrantholders to make
a reasoned decision on such matters, but it shall not be necessary for any such
notice to set out the terms of any resolution to be proposed or any of the
provisions of this Article 6. The notice convening any such meeting may be
signed by an appropriate officer of the Trustee or of the Company or the person
designated by the Warrantholders convening the meeting, as the case may be.

6.3      CHAIR

         The Trustee may nominate in writing an individual to be chair of the
meeting and if no individual is so nominated, or if the individual so nominated
is not present within 15 minutes after the time fixed for the holding of the
meeting, the Warrantholders present in person or by proxy shall appoint an
individual present to be chair. The Chair of the meeting need not be a
Warrantholder.

6.4      QUORUM

         Subject to the provisions of Section 6.11, at any meeting of the
Warrantholders a quorum shall consist of Warrantholders present in person or
represented by proxy and holding or representing at least 10% of the aggregate
number of Warrants then unexercised and outstanding, provided that at least two
persons entitled to vote thereat are personally present. If a quorum of the
Warrantholders shall not be present within one half-hour from the time fixed for
holding any meeting, the meeting, if summoned by the Warrantholders or on a
Warrantholders' Request, shall be dissolved; but in any other case the meeting
shall be adjourned to the same day in the next week (unless such day is not a
Business Day in which case it shall be adjourned to the next following Business
Day) at the same time and place to the extent possible and, subject to the
provisions of Section 6.11, no notice of the adjournment need be given. Any
business may be brought before or dealt with at an adjourned meeting which might
have been dealt with at the original meeting in accordance with the notice
calling the same. At the adjourned meeting, the Warrantholders present in person
or represented by proxy shall form a quorum and may transact the business for
which the meeting was originally convened, notwithstanding that they may not
hold or represent at least 10% of the aggregate number of Warrants then
unexercised and outstanding. No business shall be transacted at any meeting
unless a quorum is present at the commencement of business.

6.5      POWER TO ADJOURN

         The chair of any meeting at which a quorum of the Warrantholders is
present may, with the consent of the meeting, adjourn any such meeting, and no
notice of such adjournment need be given except such notice, if any, as the
meeting may prescribe.

<PAGE>
                                     -28-

6.6      SHOW OF HANDS

         Every question submitted to a meeting shall be decided in the first
place by a majority of the votes given on a show of hands except that votes on
an Extraordinary Resolution shall be given in the manner hereinafter provided.
At any such meeting, unless a poll is duly demanded as herein provided, a
declaration by the chair that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact.

6.7      POLL AND VOTING

         On every Extraordinary Resolution, and when demanded by the chair or by
one or more of the Warrantholders acting in person or by proxy on any other
question submitted to a meeting and after a vote by show of hands, a poll shall
be taken in such manner as the chair shall direct. Questions other than those
required to be determined by Extraordinary Resolution shall be decided by a
majority of the votes cast on a poll. On a show of hands, every person who is
present and entitled to vote, whether as a Warrantholder or as proxy for one or
more absent Warrantholders, or both, shall have one vote. On a poll, each
Warrantholder present in person or represented by a proxy duly appointed by
instrument in writing shall be entitled to one vote in respect of each
unexercised Warrant held by him. A proxyholder need not be a Warrantholder. The
chair of any meeting shall be entitled, both on a show of hands and on a poll,
to vote in respect of the Warrants, if any, held or represented by him.

6.8      REGULATIONS

         Subject to the provisions of this Indenture, the Trustee or the Company
with the approval of the Trustee may from time to time make and from time to
time vary such regulations as it shall consider necessary or appropriate:

   (a)   for the deposit of instruments appointing proxies at such place and
         time as the Trustee, the Company or the Warrantholders convening the
         meeting, as the case may be, may in the notice convening the meeting
         direct;

   (b)   for the deposit of instruments appointing proxies at some approved
         place other than the place at which the meeting is to be held and
         enabling particulars of such instruments appointing proxies to be
         mailed or faxed before the meeting to the Company or to the Trustee at
         the place where the same is to be held and for the voting of proxies so
         deposited as though the instruments themselves were produced at the
         meeting;

   (c)   for the form of the instrument of proxy; and

   (d)   generally for the calling of meetings of Warrantholders and the conduct
         of business thereat.

<PAGE>
                                     -29-

         Any regulations so made shall be binding and effective and the votes
given in accordance therewith shall be valid and shall be counted. Save as such
regulations may provide, the only persons who shall be recognized at any meeting
as a Warrantholder, or be entitled to vote or be present at the meeting in
respect thereof (subject to Section 6.9), shall be Warrantholders or persons
holding proxies of Warrantholders.

6.9      COMPANY, TRUSTEE AND COUNSEL MAY BE REPRESENTED

         The Company and the Trustee, by their respective employees, directors
and officers, and the counsel for each of the Company, the Warrantholders and
the Trustee may attend any meeting of the Warrantholders and speak thereto but
shall have no vote as such.

6.10     POWERS EXERCISABLE BY EXTRAORDINARY RESOLUTION

         In addition to all other powers conferred upon them by any other
provisions of this Indenture or by law, the Warrantholders at a meeting shall
have the power, exercisable from time to time by Extraordinary Resolution:

   (a)   to agree with the Company to any modification, abrogation, alteration,
         compromise or arrangement of the rights of Warrantholders and/or,
         subject to the prior consent, the Trustee in its capacity as trustee
         hereunder or on behalf of the Warrantholders against the Company
         whether such rights arise under this Indenture or otherwise.

   (b)   to amend or repeal any Extraordinary Resolution previously passed or
         sanctioned by the Warrantholders;

   (c)   to direct or authorize the Trustee, subject to receipt of funding and
         indemnity, to enforce any of the covenants on the part of the Company
         contained in this Indenture or to enforce any of the rights of the
         Warrantholders in any manner specified in such Extraordinary Resolution
         or to refrain from enforcing any such covenant or right;

   (d)   to waive and direct the Trustee to waive any default on the part of the
         Company in complying with any provisions of this Indenture or Warrants,
         either unconditionally or upon any conditions specified in such
         Extraordinary Resolution;

   (e)   to assent to any change in or omission from the provisions contained
         herein or in the Warrant Certificates or any ancillary or supplemental
         instrument which is agreed to by the Company and to authorize the
         Trustee to concur in and execute any ancillary or supplemental
         indenture embodying the change or omission;

<PAGE>
                                     -30-

   (f)   to assent to a compromise or arrangement with a creditor or creditors
         or a class or classes of creditors, whether secured or otherwise, and
         with holders of any shares or other securities of the Company;

   (g)   to restrain any Warrantholder from taking or instituting any suit,
         action or proceeding against the Company for the enforcement of any of
         the covenants on the part of the Company contained in this Indenture or
         Warrants or to enforce any of the rights of the Warrantholders;

   (h)   to direct any Warrantholder who, as such, has brought any suit, action
         or proceeding to stay or discontinue or otherwise deal with any such
         suit, action or proceeding, upon payment of the costs, charges and
         expenses reasonably and properly incurred by such Warrantholder in
         connection therewith; and

   (i)   power from time to time and at any time to remove the Trustee and
         appoint a successor trustee;

provided, however, that Trustee shall be bound by any Extraordinary Resolution
varying the rights or protections of the Trustee hereunder without its consent.

6.11     MEANING OF EXTRAORDINARY RESOLUTION

   (a) The expression "EXTRAORDINARY RESOLUTION" when used in this Indenture
means, subject as hereinafter in this Section 6.11 and in Section 6.14 provided,
a resolution proposed at a meeting of Warrantholders duly convened for that
purpose and held in accordance with the provisions of this Article 6 at which
there are present in person or represented by proxy Warrantholders holding at
least 25% (50% for any Extraordinary Resolution that would increase the Exercise
Price, reduce the number of Underlying Securities issuable upon exercise of
Warrants (other than pursuant to adjustments provided for herein) or shorten the
Exercise Period) of the aggregate number of then outstanding unexercised
Warrants and passed by the affirmative votes of Warrantholders holding not less
than 66-2/3% of the aggregate number of the then outstanding unexercised
Warrants represented at the meeting and voted on a poll upon such resolution.

   (b) If, at any meeting called for the purpose of passing an Extraordinary
Resolution, Warrantholders holding at least 25% (50% for any Extraordinary
Resolution that would increase the Exercise Price, reduce the number of
Underlying Securities issuable upon exercise of Warrants (other than pursuant to
adjustments provided for herein) or shorten the Exercise Period) of the
aggregate number of then outstanding unexercised Warrants are not present in
person or by proxy within one half-hour after the time appointed for the
meeting, then the meeting, if convened by Warrantholders or on a Warrantholders'
Request, shall be dissolved; but in any other case it shall stand adjourned to
such day, being not less than four or more than 10 Business Days later, and to
such place in Canada and the United States and time as may be appointed by the
Chairman. Not less than three Business Days' prior notice shall be given of the
time and place of such adjourned meeting in the manner provided in Article 9.
Such notice shall state that

<PAGE>
                                     -31-

at the adjourned meeting the Warrantholders present in person or represented by
proxy shall form a quorum but it shall not be necessary to set forth the
purposes for which the meeting was originally called or any other particulars.
At the adjourned meeting the Warrantholders present in person or represented by
proxy shall form a quorum and may transact the business for which the meeting
was originally convened and a resolution proposed at such adjourned meeting and
passed by the requisite vote as provided in Section 6.11(a) shall be an
Extraordinary Resolution within the meaning of this Indenture notwithstanding
that Warrantholders holding at least 25% or 50%, as the case may be, of the
aggregate number of then outstanding unexercised Warrants are not present in
person or represented by proxy at such adjourned meeting.

   (c) Votes on an Extraordinary Resolution shall always be given on a poll and
no demand for a poll on an Extraordinary Resolution shall be necessary.

6.12     POWERS CUMULATIVE

         It is hereby declared and agreed that any one or more of the powers or
any combination of the powers in this Indenture stated to be exercisable by the
Warrantholders by Extraordinary Resolution or otherwise may be exercised from
time to time and the exercise of any one or more of such powers or any
combination of powers from time to time shall not be deemed to exhaust the right
of the Warrantholders to exercise such powers or combination of powers then or
thereafter from time to time.

6.13     MINUTES

         Minutes of all resolutions and proceedings at every meeting of
Warrantholders shall be made and duly entered in books to be from time to time
provided for that purpose by the Trustee at the reasonable expense of the
Company, and any such minutes as aforesaid, if signed by the chair of the
meeting at which such resolutions were passed or proceedings held, or by the
chair of the next succeeding meeting of the Warrantholders, shall be PRIMA FACIE
evidence of the matters therein stated and, until the contrary is proved, every
such meeting in respect of the proceedings of which minutes shall have been made
shall be deemed to have been duly convened and held, and all resolutions passed
thereat or proceedings taken shall be deemed to have been duly passed and taken.

6.14     INSTRUMENTS IN WRITING

         All actions that may be taken and all powers that may be exercised by
the Warrantholders at a meeting held as provided in this Article 6 also may be
taken and exercised by Warrantholders holding, in the case of such actions and
powers not requiring an Extraordinary Resolution, at least 51%, and, in the case
of such actions and powers requiring an Extraordinary Resolution, at least
66-2/3%, of the aggregate number of then outstanding unexercised Warrants by an
instrument in writing signed in one or more counterparts by such Warrantholders
in person or by attorney duly appointed in writing, and the expression
"EXTRAORDINARY RESOLUTION" when used in this Indenture shall include an
instrument so signed.

<PAGE>
                                     -32-

6.15     BINDING EFFECT OF RESOLUTIONS

         Every resolution and every Extraordinary Resolution passed in
accordance with the provisions of this Article 6 at a meeting of Warrantholders
shall be binding upon all the Warrantholders, whether present at or absent from
such meeting, and every instrument in writing signed by Warrantholders in
accordance with Section 6.14 shall be binding upon all the Warrantholders,
whether signatories thereto or not, and each and every Warrantholder and the
Trustee (subject to the provisions for indemnity herein contained) shall be
bound to give effect accordingly to every such resolution and instrument in
writing. In the case of an instrument in writing, the Trustee shall give notice
in the manner contemplated in Section 9.1 of the effect of the instrument in
writing to all Warrantholders and the Company as soon as is reasonably
practicable.

6.16     HOLDINGS BY THE COMPANY OR SUBSIDIARIES DISREGARDED

         In determining whether Warrantholders holding the required number of
outstanding and unexercised Warrants there are present in person or represented
by proxy at a meeting of Warrantholders for the purpose of determining a quorum
or have concurred in any consent, waiver, Extraordinary Resolution,
Warrantholders' Request or other action under this Indenture, Warrants owned
legally or beneficially by the Company or any subsidiary (as that term is
defined in the SECURITIES ACT (Ontario)) of the Company shall be disregarded.
The Company shall provide to the Trustee, upon request, a certificate of the
Company detailing the number of Warrants owned legally or beneficially by the
Company or any subsidiary (as that term is defined in the SECURITIES ACT
(Ontario)) of the Company, together with the registration thereof.

                                    ARTICLE 7
                             SUPPLEMENTAL INDENTURES

7.1      SUPPLEMENTAL INDENTURES

         From time to time the Company and the Trustee may, subject to the
provisions of this Indenture, and shall, when so directed by this Indenture,
execute and deliver by their proper officers, indentures or instruments
supplemental hereto, which thereafter shall form part hereof, for any one or
more or all of the following purposes:

   (a)   setting forth adjustments in the application of Article 2;

   (b)   adding to the provisions hereof such additional covenants and
         enforcement provisions as in the opinion of counsel are necessary or
         advisable, provided that the same are not in the opinion of the Trustee
         prejudicial to the interests of the Warrantholders as a group;

   (c)   giving effect to any Extraordinary Resolution passed as provided in
         Article 6;

<PAGE>
                                     -33-

   (d)   making such provisions not inconsistent with this Indenture as may be
         necessary or desirable with respect to matters or questions arising
         hereunder, provided that such provisions are not, in the opinion of the
         Trustee, relying on the opinion of counsel, prejudicial to the
         interests of the Warrantholders as a group;

   (e)   adding to or amending the provisions hereof in respect of the transfer
         of Warrants, making provision for the exchange of Warrants, and making
         any modification in the forms of the certificates for the Warrants that
         does not affect the substance thereof;

   (f)   making any additions to, deletions from or alterations of the
         provisions of this Indenture which, in the opinion of the Trustee do
         not materially and adversely affect the interests of the Warrantholders
         and are necessary or advisable in order to incorporate, reflect or
         comply with any Applicable Legislation; and

   (g)   for any other purpose not inconsistent with the terms of this
         Indenture, including the correction or rectification of any
         ambiguities, defective or inconsistent provisions, errors or omissions
         herein, provided that, in the opinion of the Trustee, the rights of the
         Trustee and of the Warrantholders as a group are not prejudiced
         thereby,

provided, however, that no amendment may be made to this Indenture, by
supplement or otherwise, without the prior written consent of each of the TSX
and Nasdaq (to the extent required by the rules and regulations thereof).

7.2      SUCCESSOR CORPORATIONS

         In the case of the consolidation, amalgamation, arrangement, merger or
transfer of the undertaking or assets of the Company as an entirety or
substantially as an entirety to another person (a "SUCCESSOR"), forthwith
following the occurrence of such event the successor resulting from such
consolidation, amalgamation, arrangement, merger or transfer (if not the
Company) shall expressly assume, by supplemental indenture satisfactory in form
to the Trustee and executed and delivered to the Trustee, the due and punctual
performance and observance of each and every covenant and condition of this
Indenture to be performed and observed by the Company, and in any event, shall
be bound by the provisions hereof and all obligations for the due and punctual
performance and observance of each and every covenant and obligation contained
in this Indenture to be performed by the Company.

                                    ARTICLE 8
                             CONCERNING THE TRUSTEE

8.1      TRUST INDENTURE LEGISLATION

   (a) In this Article, the term "APPLICABLE LEGISLATION" means the provisions,
if any, of the BUSINESS CORPORATION ACT (Ontario) and any statute of Canada or a
province or territory of

<PAGE>
                                     -34-

Canada and the regulations under any such named or other statute relating to
trust indentures and/or to the rights, duties and obligations of trustees and of
corporations under trust indentures, to the extent that such provisions are at
the time in force and applicable to this Indenture.

   (b) If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with a mandatory requirement of Applicable Legislation,
such mandatory requirement shall prevail.

   (c) The Company and the Trustee agree that each will at all times in relation
to this Indenture and any action to be taken hereunder observe and comply with
and be entitled to the benefit of Applicable Legislation.

8.2      RIGHTS AND DUTIES OF TRUSTEE

   (a) In the exercise of the rights and duties prescribed or conferred by the
terms of this Indenture, the Trustee shall act honestly and in good faith with a
view to the best interests of the Warrantholders and shall exercise the degree
of care, diligence and skill that a reasonably prudent trustee would exercise in
comparable circumstances. No provision of this Indenture shall be construed to
relieve the Trustee from, or require any other person to indemnify the Trustee
against, liability for its own negligence, wilful misconduct or bad faith.

   (b) Subject only to Section 8.2(a), the Trustee shall not be bound to do or
take any act, action or proceeding for the enforcement of any of the obligations
of the Company under this Indenture unless and until it shall have received a
Warrantholders' Request specifying the act, action or proceeding that the
Trustee is requested to take. The obligation of the Trustee to commence or
continue any act, action or proceeding for the purpose of enforcing any rights
of the Trustee or the Warrantholders hereunder shall be conditional upon the
Warrantholders furnishing, when required by notice in writing by the Trustee,
sufficient funds to commence or continue such act, action or proceeding and an
indemnity reasonably satisfactory to the Trustee to protect and hold harmless
the Trustee against the costs, charges, expenses and liabilities to be incurred
thereby and any loss and damage it may suffer by reason thereof. None of the
provisions contained in this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers unless
indemnified as aforesaid.

   (c) The Trustee may, before commencing or at any time during the continuance
of any such act, action or proceeding, require the Warrantholders, at whose
instance it is acting, to deposit with the Trustee the Warrants held by them,
for which Warrants the Trustee shall issue receipts.

   (d) Every provision of this Indenture that by its terms relieves the Trustee
of liability or entitles it to rely upon any evidence submitted to it is subject
to the provisions of Applicable Legislation, of this Section 8.2 and of Section
8.3.

<PAGE>
                                     -35-

8.3      EVIDENCE, EXPERTS AND ADVISERS

   (a) In addition to the reports, certificates, opinions and other evidence
required by this Indenture, the Company shall furnish to the Trustee such
additional evidence of compliance with any provision hereof in such form as may
be prescribed by Applicable Legislation, or as the Trustee may reasonably
require by written notice to the Company.

   (b) In the exercise of its rights and duties hereunder, the Trustee may, if
it is acting in good faith, rely as to the truth of the statements and the
accuracy of the opinions expressed therein, upon statutory declarations,
opinions, reports, written requests, consents or orders of the Company,
certificates of the Company or other evidence furnished to the Trustee, provided
that such evidence complies with Applicable Legislation and the Trustee examines
the same and determines that such evidence complies with the applicable
requirements of this Indenture.

   (c) Whenever Applicable Legislation requires that evidence referred to in
Section 8.3(a) be in the form of a statutory declaration, the Trustee may accept
such statutory declaration in lieu of a certificate of the Company required by
any provision hereof. Any such statutory declaration may be made by one or more
of the chairman of the board of directors, the chief executive officer, the
president, the secretary, a senior vice-president or a vice-president of the
Company.

   (d) Proof of the execution of an instrument in writing, including a
Warrantholders' Request, by any Warrantholder may be made by the certificate of
a notary public, or other officer with similar powers, that the person signing
such instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such execution or in any other manner that the Trustee may consider
adequate.

   (e) The Trustee may employ or retain such counsel, accountants or other
experts or advisers as it may reasonably require for the purpose of determining
and discharging its duties hereunder, may act on and rely upon the advice or
opinions so obtained and may pay reasonable remuneration for all services so
performed by any of them, and shall not be responsible for any misconduct on the
part of such experts or advisors who have been appointed with due care by the
Trustee. The Company shall pay, or reimburse the Trustee for, the costs of
obtaining such advice in accordance with Section 4.2.

8.4      DOCUMENTS HELD BY TRUSTEE

   (a) Any securities, documents of title or other instruments that may at any
time be held by the Trustee subject to the trusts hereof may be placed in the
deposit vaults of the Trustee or of any Canadian chartered bank or trust company
or deposited for safekeeping with any such bank or trust company.

   (b) Unless herein otherwise expressly provided, any money held pending the
application or withdrawal thereof under any provision of this Indenture may be
deposited in the

<PAGE>
                                     -36-

name of the Trustee in any Schedule A Canadian chartered bank at the rate of
interest then current on similar deposits or, with the consent of the Company,
may be:

         (i)  deposited in the deposit department of the Trustee or of any other
              loan or trust company authorized to accept deposits under the laws
              of Canada or a province thereof; or

         (ii) invested in securities issued or guaranteed by the Government of
              Canada or a province thereof or in obligations, maturing not more
              than one year from the date of investment, of any Schedule A
              Canadian chartered bank.

   (c) All interest or other income received by the Trustee in respect of
deposits and investments will belong to the Company.

8.5      ACTIONS BY TRUSTEE TO PROTECT INTERESTS

         The Trustee shall have the power to institute and to maintain such
actions and proceedings as it may consider necessary or expedient to preserve,
protect or enforce its interests and the interests of the Warrantholders.

8.6      TRUSTEE NOT REQUIRED TO GIVE SECURITY

         Subject to the provisions of this Indenture and Applicable Legislation,
the Trustee shall not be required to give any bond or security in respect of the
execution of the trusts and powers of this Indenture or otherwise.

8.7      PROTECTION OF TRUSTEE

         By way of supplement to the provisions of any law for the time being
relating to trustees, it is expressly declared and agreed as follows:

   (a)   The Trustee shall not be liable for or by reason of any statements of
         fact or recitals in this Indenture (except the representation contained
         in Section 8.9) or be required to verify the same.

   (b)   Nothing herein contained shall impose any obligation on the Trustee to
         see to or to require evidence of the registration or filing (or renewal
         thereof) of this Indenture or any instrument ancillary or supplemental
         hereto.

   (c)   The Trustee shall not be bound to give notice to any person of the
         execution hereof.

   (d)   The Trustee shall not incur any liability or responsibility whatsoever
         or be in any way responsible for the consequence of any breach on the
         part of the Company of any of the covenants herein contained or of any
         acts of any directors, officers, employees, agents or servants of the
         Company.

<PAGE>
                                     -37-

8.8      REPLACEMENT OF TRUSTEE

   (a) The Trustee may resign its trust and be discharged from all further
duties and liabilities hereunder by giving to the Company not less than 45 days'
prior notice in writing or such shorter prior notice as the Company may accept
as sufficient. The Warrantholders by Extraordinary Resolution shall have the
power at any time to remove the existing Trustee and to appoint a new trustee.
In the event of the Trustee resigning or being removed as aforesaid or being
dissolved, becoming bankrupt, going into liquidation or otherwise becoming
incapable of acting hereunder, the Company shall forthwith appoint a new trustee
unless a new trustee has already been appointed by the Warrantholders; failing
such appointment by the Company, within 10 days the retiring Trustee or any
Warrantholder may apply to a justice of the Ontario Court (General Division) at
the Company's expense, on such notice as such justice may direct, for the
appointment of a new trustee; but any new trustee so appointed by the Company or
by the Court shall be subject to removal as aforesaid by the Warrantholders. Any
new trustee appointed under any provision of this Section 8.8 shall be a
corporation authorized to carry on the business of a trust company in the
Province of Ontario and, if required by Applicable Legislation of any other
province, in such other province and shall maintain an office or agency in the
Borough of Manhattan, City of New York, New York where Warrants may be exercised
pursuant to Section 3.1, redeemed pursuant to Section 3.4 or transferred
pursuant to Section 2.9. On any such appointment, the new trustee shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named herein as Trustee without any further assurance,
conveyance, act or deed; but there shall be immediately executed, at the expense
of the Company, all such conveyances or other instruments as may, in the opinion
of counsel, be necessary or advisable for the purpose of assuring the same to
the new trustee, provided that any resignation or removal of the Trustee and
appointment of a successor trustee shall not become effective until the
successor trustee shall have executed an appropriate instrument accepting such
appointment and, at the request of the Company, the predecessor Trustee, upon
payment of its outstanding remuneration and expenses, shall execute and deliver
to the successor trustee an appropriate instrument transferring to such
successor trustee all rights and powers of the predecessor Trustee hereunder.

   (b) Upon the appointment of a successor trustee, the Company shall promptly
notify the Warrantholders thereof.

   (c) Any corporation into or with which the Trustee may be merged or
consolidated or amalgamated, or any corporation succeeding to the trust business
of the Trustee, shall be the successor to the Trustee hereunder without any
further act on its part or of any of the parties hereto, provided that such
corporation would be eligible for appointment as a new trustee under Section
8.8(a).

   (d) Any Warrants certified but not delivered by a predecessor trustee may be
certified by the successor trustee in the name of the predecessor or successor
trustee.

<PAGE>
                                     -38-

8.9      CONFLICT OF INTEREST

   (a) The Trustee represents to the Company that at the time of execution and
delivery hereof no material conflict of interest exists which it is aware of in
the Trustee's role as a fiduciary hereunder and agrees that in the event of a
material conflict of interest arising which it becomes aware of hereafter it
will, within 90 days after ascertaining that it has such a material conflict of
interest, either eliminate the same or resign its trust hereunder to a successor
trustee approved by the Company. If any such material conflict of interest
exists or hereafter shall exist, the validity and enforceability of this
Indenture and the Warrants shall not be affected in any manner whatsoever by
reason thereof.

   (b) Subject to Section 8.9(a), the Trustee, in its personal or any other
capacity, may buy, lend upon and deal in securities of the Company and generally
may contract and enter into financial transactions with the Company or any
subsidiary of the Company without being liable to account for any profit made
thereby.

8.10     ACCEPTANCE OF TRUSTS

         The Trustee hereby accepts the trusts in this Indenture declared and
provided for and agrees to perform the same upon the terms and conditions herein
set forth, and to hold all rights, interests and benefits contained herein for
and on behalf of those persons who become Warrantholders from time to time.

8.11     TRUSTEE NOT TO BE APPOINTED RECEIVER

         Neither the Trustee nor any person related to the Trustee shall be
appointed a receiver or receiver and manager or liquidator of all or any part of
the assets or undertaking of the Company.

8.12     INDEMNITY OF TRUSTEE

         The Company hereby indemnifies and holds harmless the Trustee and its
officers from and against all reasonable costs, liabilities, expenses and
disbursements (including reasonable legal fees and disbursements) that it might
incur or to which it might have become subject in any action, suit or other
similar legal proceeding that might be instituted against the Trustee arising
from or out of any act, omission or error of the Trustee arising pursuant to
this Indenture, provided that the Trustee acted in accordance with the standards
set forth in Section 8.2 and that any such act, omission or error did not
constitute negligence, wilful misconduct or bad faith on the part of the
Trustee. This Section 8.12 shall survive the resignation or removal of the
Trustee or the termination of this Indenture.

8.13     NOTICE

   (a) The Trustee shall not be bound to give any notice or to do or take any
act, action, or proceeding by virtue of the powers conferred on it hereby unless
and until it shall have been

<PAGE>
                                     -39-

required so to do under the terms hereof and the Trustee shall not be required
to take notice of any default of the Company hereunder unless and until notified
in writing of the default (which notice must specify the nature of the default)
and, in the absence of such notice, the Trustee may for all purposes hereunder
conclusively assume that no default by the Company hereunder has occurred. The
giving of any notice shall in no way limit the discretion of the Trustee
hereunder as to whether any action is required to be taken in respect of any
default hereunder.

   (b) Whenever any confirmation or instruction is required to be given to the
Trustee pursuant to this Indenture, such confirmation or instruction must be in
writing to be valid and effectively given.

                                    ARTICLE 9
                                     GENERAL

9.1      NOTICE

   (a) Unless herein otherwise expressly provided, any notice, document or thing
required or permitted to be given or delivered hereunder shall be deemed to be
properly given or delivered if:

         (i)   delivered in person to the address set out below and acknowledged
               by written receipt signed by the person receiving such notice;

         (ii)  telecopied and confirmed by prepaid registered letter addressed
               to the party receiving such notice at its respective addresses
               set out below; or

         (iii) sent by prepaid registered letter (provided that any notice to be
               so given is not unlikely to reach its destination as a result of
               any actual or threatened interruption of mail services) or
               courier delivery addressed to the party receiving such notice at
               its respective address set out below:

the Company:   Agnico-Eagle Mines Limited
               145 King Street East
               Suite 500
               Toronto, Ontario
               M5C 1G6

               Attention:  David Garofalo, Vice President, Finance and Chief
                           Financial Officer
               Fax No.:    (416) 367-4681

with a         Davies Ward Phillips & Vineberg LLP
copy (which    Barristers & Solicitors
shall not      P.O. Box 63, Suite 4400
constitute     1 First Canadian Place

<PAGE>
                                     -40-

notice) to:       Toronto, Ontario
                  M5X 1B1

                  Attention:  Patricia Olasker
                  Fax:        (416) 863-0871


the Trustee:      Computershare Trust Company of Canada
                  100 University Avenue
                  9th Floor, North Tower
                  Toronto, ON  M5J 2Y1

                  Attention:  Manager, Corporate Trust
                  Fax:        (416) 981-9777


a Warrantholder:  the address appearing in the register of holders

   (b) Any notice or delivery given in accordance with this Section 9.1 shall be
deemed to have been given and received:

         (i)   if delivered in person in accordance with Section 9.1(a)(i), on
               the day of delivery in person (provided that such day is a
               Business Day at the place of receipt and delivery occurs prior to
               4:00 p.m. (local time of the recipient) and, if it is not, on the
               next following Business Day);

         (ii)  if telecopied in accordance with Section 9.1(a)(ii) during the
               business hours of the recipient, on the date of receipt of the
               telecopy (provided that such day is a Business Day at the place
               of receipt and, if it is not, on the next following Business Day)
               and if telecopied other than during business hours, on the next
               following Business Day; and

         (iii) if sent by prepaid registered letter or courier delivery in
               accordance with Section 9.1(a)(iii), on the date the letter is
               actually received by the addressee.

   (c) For greater certainty, a letter delivered by courier where such courier
obtains a written acknowledgment of receipt from the party receiving the letter
shall be considered a delivery in person in accordance with Section 9.1(a)(i)
rather than the sending of a letter in accordance with Section 9.1(a)(iii).

   (d) The Company or the Trustee, as the case may be, may from time to time by
notice in writing delivered in accordance with Section 9.1 change its address
for purposes hereof.

<PAGE>
                                     -41-

9.2      ACCIDENTAL FAILURE TO GIVE NOTICE TO WARRANTHOLDERS

         Accidental error or omission in giving notice or accidental failure to
give notice to any Warrantholder shall not invalidate any action or proceeding
founded thereon.

9.3      COUNTERPARTS AND FORMAL DATE

         This Indenture may be executed in several counterparts, each of which
when so executed shall be deemed to be an original and such counterparts
together shall constitute one and the same instrument and notwithstanding their
date of execution shall be deemed to be dated as of the date hereof.

9.4      SATISFACTION AND DISCHARGE OF INDENTURE

         Upon the earlier of: (i) the date by which all Warrants theretofore
certified hereunder have been cancelled or deemed to be cancelled in accordance
with Section 3.5; and (ii) the Expiry Time, this Indenture, except to the extent
that Underlying Securities and certificates therefor have not been issued and
delivered hereunder or the Company has not performed any of its obligations
hereunder, shall cease to be of further effect in respect of the Company, and
the Trustee, on written demand of and at the cost and expense of the Company,
and upon delivery to the Trustee of a certificate of the Company stating that
all conditions precedent to the satisfaction and discharge of this Indenture
have been complied with and upon payment to the Trustee of the expenses, fees
and other remuneration payable to the Trustee, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; provided that if
the Trustee has not then performed any of its obligations hereunder, any such
satisfaction and discharge of the Company's obligations hereunder shall not
affect or diminish the rights of any Warrantholder or the Company against the
Trustee.

9.5      PROVISIONS OF INDENTURE AND WARRANTS FOR THE SOLE BENEFIT OF PARTIES
         AND WARRANTHOLDERS

         Except as provided in Sections 5.2 and 5.3, nothing in this Indenture,
expressed or implied, shall give or be construed to give to any person other
than the parties hereto and the holders from time to time of the Warrants any
legal or equitable right, remedy or claim under this Indenture, or under any
covenant or provision herein contained, all such covenants and provisions being
for the sole benefit of the parties hereto and the Warrantholders.

9.6      LANGUAGE

         The parties hereto confirm their express wish that this Indenture and
all documents and agreements directly or indirectly relating thereto be drawn up
in the English language. Notwithstanding such express wish, the parties agree
that any such document or agreement, or any part thereof or of this Indenture,
may be drawn up in the French language.

<PAGE>
                                     -42-

         Les parties aux presentes confirment leur volonte expresse que la
presente convention ainsi que tous les documents et conventions s'y rattachant
directement ou indirectement soient rediges en anglais. Nonobstant cette volonte
expresse, les parties aux presentes conviennent que la presente convention ainsi
que tous les documents et conventions s'y rattachant directement ou
indirectement, ou toute partie de ceux-ci, puissent etre rediges en francais.

9.7      PURCHASE OF WARRANTS BY COMPANY

         Subject to applicable law, the Company may from time to time purchase
on any stock exchange in the open market, by invitation for tender, by private
contract or otherwise any of the Warrants, on such terms as the Company may
determine. Any such purchase may be made in such manner, from such persons, on
such other terms and at such prices as the Company in its sole discretion may
determine. The Warrant Certificates representing the Warrants purchased pursuant
to this Section 9.7 shall forthwith be delivered to and cancelled by the
Trustee. If requested by the Company, the Trustee shall furnish the Company with
a certificate as to such destruction.

9.8      ASSIGNMENT

         This Indenture may not be assigned by either party hereto without the
consent in writing of the other party. This Indenture shall enure to and bind
the parties and their lawful successors and permitted assigns.

9.9      NO WAIVER, ETC.

         No act, omission, delay, acquiescence or course of conduct on the part
of the party hereto, other than a specific written instrument, shall constitute
a waiver of or consent to any breach or default by the other party hereto, or
affect or limit the right of the party to insist on strict or timely performance
of the obligation of the other party.

9.10     FURTHER ASSURANCES

         Each of the parties hereto shall do or cause to be done all such acts
and things and execute such further documents, agreements and assurances as may
reasonably be necessary or advisable from time to time to carry out the
provisions of this Indenture in accordance with their true intent.

<PAGE>
                                     -43-

         IN WITNESS WHEREOF the parties hereto have executed this Indenture
under the hands of their proper officers in that behalf.

                                           AGNICO-EAGLE MINES LIMITED

                                           by
                                              ----------------------------------
                                              Name:  David Garofalo
                                              Title: Vice President, Finance
                                                     and Chief Financial Officer

                                           COMPUTERSHARE TRUST COMPANY OF CANADA

                                           by
                                              ----------------------------------
                                              Name:
                                              Title:

                                           by
                                              ----------------------------------
                                              Name:
                                              Title:


<PAGE>


                                   SCHEDULE A

                           FORM OF WARRANT CERTIFICATE

TEXT FOR WARRANT CERTIFICATE

THIS CERTIFIES that, for value received, the holder hereof, is the registered
holder of the number of common share purchase warrants (the "Warrants") stated
above and is entitled at any time at or after the date hereof and prior to 5:00
p.m. (Toronto time) on November 14, 2007 (the "Expiry Time") to purchase in
accordance with the provisions of the Indenture (as defined below) one common
share (a "Common Share") of Agnico-Eagle Mines Limited (the "Company") for each
such Warrant represented hereby at a price of U.S.$19.00 per Common Share (the
"Exercise Price") by surrendering to Computershare Trust Company of Canada (the
"Trustee) at its principal office in the City of Toronto, Ontario or at the
principal office of Computershare Trust Company of New York (the "U.S. Agent")
in the Borough of Manhattan, City of New York, New York this certificate
together with an executed exercise form (the "Exercise Form") in the form of the
attached Exercise Form or any other written notice in a form satisfactory to the
applicable Trustee, in either case duly completed and executed, and a certified
cheque, bank draft or money order payable at par to or to the order of
Agnico-Eagle Mines Limited in the amount equal to the exercise price multiplied
by the number of Common Shares subscribed for; PROVIDED THAT UNLESS THE HOLDER
HAS SURRENDERED THE WARRANTS REPRESENTED HEREBY FOR EXERCISE PURSUANT TO THE
PROVISIONS HEREOF AND OF THE INDENTURE ON OR PRIOR TO THE EXPIRY TIME, THE
WARRANTS REPRESENTED HEREBY SHALL BE VOID AND OF NO EFFECT.

Upon the exercise of the Warrants evidenced hereby, the Company shall cause to
be issued to the person(s) in whose name(s) the Common Shares so subscribed for
are to be issued (provided that if the Common Shares are to be issued to a
person other than a holder of this Warrant certificate, the holder's signature
on the Exercise Form herein shall be guaranteed by a Canadian chartered bank, a
major trust company in Canada, a firm which is a member of a recognized stock
exchange in Canada, a member of the Investment Dealers Association of Canada, a
national securities exchange in the United States, or the National Association
of Securities Dealers, Inc. or a participant in the Securities Transfer Agents
Medallion (STAMP) Program (an "Eligible Institution")) the number of Common
Shares to be issued to such person(s), and such person(s) shall become a holder
in respect of Common Shares with effect from the date of such exercise and upon
the due surrender of this Warrant certificate the Company will cause a
certificate(s) representing such Common Shares to be made available for pick-up
by such person(s) at the principal office of the Trustee in the City of Toronto,
Ontario or mailed to be made available for pick-up at the principal office of
the U.S. Agent in the Borough of Manhattan, City of New York, New York or mailed
to such person(s) at the address(es) specified in such Exercise Form, within
three Business Days after receipt of notice from the Trustee of the exercise of
such Warrant.

The Warrants evidenced hereby shall not be exercised by any "U.S. person" (a
"U.S. Person"), as defined in Rule 902(k) of Regulation S under the United
States Securities Act of 1933, as amended (the "1933 Act") or any person holding
such Warrants for the account of a U.S. Person at any time when no registration
statement under the 1933 Act registering the Common Shares issuable upon
exercise of the Warrants evidenced hereby is effective. During such time and
prior

<PAGE>
                                      -2-

to the Expiry Time, any U.S. Person holding such Warrants shall have the right
to cause the Company to redeem such Warrants in accordance with the provisions
of the Indenture.

This Warrant Certificate represents Warrants of the Company issued under the
provisions of a Indenture (which indenture together with all other instruments
supplemental or ancillary thereto is herein referred to as the "Indenture")
dated November 14, 2002 between the Company and the Trustee, to which Indenture
reference is hereby made for particulars of the rights of the holders and the
Company and of the Trustee in respect thereof and the terms and conditions upon
which the Warrants are issued and held, all to the same effect as if the
provisions of the Indenture were herein set forth, to all of which the holder by
acceptance hereof assents. A copy of the Indenture will be provided at no cost
to a holder who makes a request for such copy to the Company or to the Trustee.
IF ANY CONFLICT EXISTS BETWEEN THE PROVISIONS CONTAINED HEREIN AND THE
PROVISIONS OF THE INDENTURE, THE PROVISIONS OF THE INDENTURE SHALL GOVERN.

The Indenture provides for adjustments to the right of exercise, including the
amount of and class and kind of securities or other property issuable upon
exercise, upon the happening of certain stated events, including the subdivision
or consolidation of the Common Shares, certain distributions of Common Shares or
securities convertible into Common Shares or of other securities or assets of
the Company, certain offerings of rights, warrants or options and certain
reorganizations.

No fractional Common Shares are issuable upon the exercise of this Warrant. The
Company will pay an amount in cash in lieu of issuing fractional Common Shares,
in accordance with the Indenture. Holders of Warrants will not have any rights
as shareholders of the Company by virtue of holding such Warrants.

Upon presentation to the Trustee at its principal office in the City of Toronto,
Ontario or at the principal office of the U.S. Agent in the Borough of
Manhattan, City of New York, New York, subject to the provisions of the
Indenture and upon compliance with the reasonable requirements of the Trustee,
this Warrant certificate may be exchanged for Warrant certificates entitling the
holder thereof to purchase an equal aggregate number of Common Shares upon
payment of the aggregate Exercise Price. If the holder subscribes for a lesser
number of Common Shares than the number of shares referred to in this Warrant
certificate, the holder shall be entitled to receive a further Warrant
certificate in respect of Common Shares referred to in this Warrant certificate
but not subscribed for. The Company and the Trustee may treat the registered
holder of this Warrant certificate for all purposes as the absolute owner
hereof. The holding of this Warrant certificate shall not constitute the holder
thereof a holder of Common Shares or entitle him to any right or interest in
respect thereof except as herein and in the Indenture expressly provided.

Warrants may be transferred upon compliance with the conditions described in the
Indenture, on the register to be kept at the principal office of the Trustee in
the City of Toronto, by the registered holder thereof or his executors or
administrators or other legal representatives, or his or their attorney
appointed by instrument in writing in form and execution satisfactory to the
Trustee with a signature guaranteed by an Eligible Institution and upon
compliance with such reasonable requirements as the Trustee may prescribe
(including the requirement to provide evidence of satisfactory compliance with
applicable securities laws).

<PAGE>
                                      -3-

The Indenture contains provisions making binding upon the holders of Warrants
outstanding thereunder resolutions passed at meetings of such holders held in
accordance with such provisions and instruments in writing signed by the holders
holding a specified percentage of the then unexercised Warrants.

This Warrant certificate and the Indenture shall be governed by the laws of the
Province of Ontario and the federal laws of Canada applicable in that province.
Time shall be of the essence hereof and of the Indenture. This Warrant
certificate shall not be valid for any purpose until it has been certified by or
on behalf of the Trustee for the time being under the Indenture.

         IN WITNESS WHEREOF the Company has caused this Warrant certificate to
be signed by its duly authorized officer as of November 14, 2002.



<PAGE>


                                  TRANSFER FORM


         FOR VALUE RECEIVED, _________________________________hereby sells,

assigns and transfers unto _____________________________________________________
                            PLEASE PRINT OR TYPE NAME AND ADDRESS  OF ASSIGNEE

Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint

__________________________________________________ attorney to transfer the said
Warrants on the books of the Trustee and/or the Company with full power of
substitution in the premises.


                  DATED this ________ day of__________________ , 2002.




                          ------------------------------------------------------
                          Signature of Warrantholder


                          ------------------------------------------------------
                          Print full name


                          ------------------------------------------------------
                          Address in full


Signature guaranteed by:



                                    Name ______________________________
                                         (Authorized Signature Number)

NOTICE: The signature on this assignment must correspond exactly with the name
as written upon the face of this certificate. If Common Shares are to be issued
to a person other than the registered holder, the registered holder must pay to
the Trustee all exigible taxes and the signature of the registered holder must
be guaranteed by an Eligible Institution. The guarantor must affix a stamp
bearing the actual words "Signature Guarantee".


<PAGE>

                                  EXERCISE FORM

TO:      Agnico-Eagle Mines Limited

         The undersigned holder of the within Warrants hereby irrevocably
exercises the Warrants represented hereby and subscribes for the maximum number
of Common Shares (or other shares or securities or property issuable in
accordance with the Indenture) of Agnico-Eagle Mines Limited issuable pursuant
to the within Warrants on the terms specified in the said Warrants and the
Indenture.

         The undersigned hereby directs that the said Common Shares be issued in
the name of the undersigned and delivered to the address of the undersigned as
shown on the register of holders of Warrants, unless otherwise specified in the
space provided below.

<TABLE>
<CAPTION>
<S>                      <C>                    <C>

- ------------------------ ---------------------- --------------------------------
    NAME(S) IN FULL            ADDRESS(ES)          NUMBER OF COMMON SHARES
                          (include Postal Code)
- ------------------------ ---------------------- --------------------------------
- ------------------------ ---------------------- --------------------------------






- ------------------------ ---------------------- --------------------------------
- ------------------------ ---------------------- --------------------------------






- ------------------------ ---------------------- --------------------------------
(Please Print)
</TABLE>


Number of Warrants being Exercised:  _____________________________


[ ]      Please check box if these certificates are to be delivered to the
         office where this Warrant Certificate is surrendered, failing which the
         certificates will be mailed to the address shown on the register.

         Please note that if Common Shares are to be issued to a person other
than the registered holder, the registered holder must pay to the Trustee all
exigible taxes and duly execute the form of transfer and the signature of the
registered holder must be guaranteed.

<PAGE>
                                      -2-


                  DATED this ________ day of ____________________ , 2002.



                          ------------------------------------------------------
                          Signature of Warrantholder


                          ------------------------------------------------------
                          Print full name


                          ------------------------------------------------------
                          Address in full





                                ------------------------------------------------
                                         (Signature of Guarantor)

                          Name:
                                ------------------------------------------------
                                       (Authorized Signature Number)

Note: If the signature of the person executing this form is to be guaranteed, it
      must be guaranteed by an Eligible Institution.




</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
