EX-99.1 2 a2236286zex-99_1.htm EX-99.1
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Exhibit 99.1

Second Quarter Report 2018

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

This Management's Discussion and Analysis ("MD&A") dated July 26, 2018 of Agnico Eagle Mines Limited ("Agnico Eagle" or the "Company") should be read in conjunction with the Company's condensed interim consolidated financial statements for the three and six months ended June 30, 2018 that were prepared in accordance with International Accounting Standard 34 Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB"). This MD&A should also be read in conjunction with the MD&A and consolidated financial statements included in the Company's Annual Report on Form 40-F for the year ended December 31, 2017 (the "Form 40-F"), prepared in accordance with IFRS. The condensed interim consolidated financial statements and this MD&A are presented in United States dollars ("US dollars", "$" or "US$") and all units of measurement are expressed using the metric system, unless otherwise specified. Certain information in this MD&A is presented in Canadian dollars ("C$"), Mexican pesos or European Union euros ("Euros" or "€"). Additional information relating to the Company, including the Company's Annual Information Form for the year ended December 31, 2017 (the "AIF"), is available on the Canadian Securities Administrators' (the "CSA") SEDAR website at www.sedar.com.

Business Overview

Agnico Eagle is a senior Canadian gold mining company that has produced precious metals since its formation in 1972. The Company's mines are located in Canada, Mexico and Finland, with exploration and development activities in Canada, Europe, Latin America and the United States. The Company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983.

Agnico Eagle earns a significant proportion of its revenue and cash flow from the production and sale of gold in both dore bar and concentrate form. The remainder of revenue and cash flow is generated by the production and sale of by-product metals, primarily silver, zinc and copper.

Agnico Eagle's operating mines and development projects are located in what the Company believes to be politically stable countries that are supportive of the mining industry. The political stability of the regions in which Agnico Eagle operates helps to provide confidence in its current and future prospects and profitability. This is important for Agnico Eagle as it believes that many of its new mines and recently acquired mining projects have long-term mining potential.

Financial and Operating Results

Balance Sheet Review

Total assets as at June 30, 2018 of $8,278.7 million increased by $413.1 million compared with total assets of $7,865.6 million as at December 31, 2017. Cash and cash equivalents increased by $75.3 million to $708.3 million between December 31, 2017 and June 30, 2018 primarily due to the issuance of $350.0 million guaranteed senior unsecured notes and cash provided by operating activities of $327.8 million, partially offset by $598.8 million in capital expenditures and acquisitions, $26.3 million for the repurchase of common shares for stock-based compensation plans and $42.1 million in dividends paid during the first six months of 2018. Inventories decreased to $440.0 million at June 30, 2018 compared with $501.0 million at December 31, 2017 primarily due to planned fuel and supplies inventory drawdowns in Nunavut. Equity securities decreased from $122.8 million at December 31, 2017 to $73.2 million at June 30, 2018 due to $39.1 million in unrealized fair value losses and $17.8 million in disposals, partially offset by $7.3 million in new investments during the first six months of 2018. Other current assets increased from $150.6 million at December 31, 2017 to $200.9 million at June 30, 2018 primarily due to a $50.4 million increase in prepaid expenses. Property, plant and mine development increased from $5,626.6 million at December 31, 2017 to $5,990.2 million at June 30, 2018 primarily due to an acquisition and additions capitalized to property, plant and mine development of $639.0 million, partially offset by amortization expense of $272.8 million during the first six months of 2018.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

Total liabilities increased to $3,346.5 million at June 30, 2018 from $2,918.6 million at December 31, 2017 primarily due to the issuance of $350.0 million guaranteed senior unsecured notes on April 5, 2018. Agnico Eagle's reclamation provision increased by $24.2 million between December 31, 2017 and June 30, 2018 primarily due to the re-measurement of the Company's reclamation provisions by applying updated expected cash flows and assumptions at June 30, 2018. Agnico Eagle's net income taxes payable position of $3.2 million at December 31, 2017 was reduced during the first six months of 2018 by payments to tax authorities in excess of the year to date current tax provision, resulting in a net income taxes recoverable position of $14.2 million at June 30, 2018.

Fair Value of Derivative Financial Instruments

The Company occasionally enters into contracts to limit the risk associated with decreased by-product metal prices, increased foreign currency costs (including capital expenditures) and input costs. The contracts act as economic hedges of underlying exposures and are not held for speculative purposes. Agnico Eagle does not use complex derivative contracts to hedge exposures. The fair value of the Company's derivative financial instruments is outlined in the financial instruments note to the condensed interim consolidated financial statements.

Results of Operations

Agnico Eagle reported net income of $5.0 million, or $0.02 per share, in the second quarter of 2018 compared with net income of $54.9 million⁽ⁱ⁾, or $0.24 per share⁽ⁱ⁾, in the second quarter of 2017. Agnico Eagle reported adjusted net income of $2.6 million, or $0.01 per share, in the second quarter of 2018 compared with adjusted net income of $54.8 million⁽ⁱ⁾, or $0.24 per share⁽ⁱ⁾, in the second quarter of 2017. For a reconciliation of adjusted net income to net income as presented in the condensed interim consolidated statements of income in accordance with IFRS, see Non-GAAP Financial Performance Measures in this MD&A.

In the second quarter of 2018, the operating margin (revenues from mining operations less production costs) of $252.6 million decreased compared to $282.2 million in the second quarter of 2017 primarily due to a 13.5% increase in production costs between periods. Gold production decreased to 404,961 ounces in the second quarter of 2018 compared with 427,743 ounces in the second quarter of 2017 primarily due to an expected decrease in the tonnes of ore processed at the Meadowbank mine as it transitions through the last full year of mining at site. Partially offsetting the overall decrease in gold production between the second quarter of 2018 and the second quarter of 2017 was a 21.1% increase in gold grade at the LaRonde mine. Cash provided by operating activities amounted to $120.1 million in the second quarter of 2018 compared with $184.0 million in the second quarter of 2017. Total weighted average cash costs per ounce of gold produced amounted to $656 on a by-product basis and $736 on a co-product basis in the second quarter of 2018 compared with $556 on a by-product basis and $628 on a co-product basis in the second quarter of 2017. For a reconciliation of total cash costs per ounce of gold produced on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (without deducting by-product metal revenues) to production costs as presented in the condensed interim consolidated statements of income in accordance with IFRS, see Non-GAAP Financial Performance Measures in this MD&A.

Agnico Eagle reported net income of $49.9 million or $0.21 per share, in the six months ended June 30, 2018 compared with net income of $130.8 million⁽ⁱ⁾, or $0.57 per share⁽ⁱ⁾, in the six months ended June 30, 2017. Agnico Eagle reported adjusted net income of $36.9 million, or $0.16 per share, in the first six months of 2018 compared with adjusted net income of $118.9 million⁽ⁱ⁾, or $0.52 per share⁽ⁱ⁾, in the first six months of 2017. For a reconciliation of adjusted net income to net income as presented in the condensed interim consolidated statements of income in accordance with IFRS, see Non-GAAP Financial Performance Measures in this MD&A.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

In the first six months of 2018, the operating margin (revenues from mining operations less production costs) decreased to $535.7 million from $589.4 million in the first six months of 2017 primarily due to a 4.2% decrease in gold ounces sold between periods and a 17.9% increase in production costs between periods. Gold production decreased to 794,239 ounces in the first six months of 2018 compared with 845,959 ounces in the first six months of 2017 primarily due to a 12.9% decrease in the tonnes of ore processed at the Meadowbank mine between periods. Partially offsetting the overall decrease in gold production between the first six months of 2018 and the first six months of 2017 was a 20.2% and 12.1% higher gold grade between periods at the LaRonde and Canadian Malartic mines, respectively. Cash provided by operating activities amounted to $327.8 million in the first six months of 2018 compared with $406.6 million in the first six months of 2017. Total weighted average cash costs per ounce of gold produced amounted to $652 on a by-product basis and $735 on a co-product basis in the first six months of 2018 compared with $548 on a by-product basis and $622 on a co-product basis in the first six months of 2017. For a reconciliation of total cash costs per ounce of gold produced on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (without deducting by-product metal revenues) to production costs as presented in the condensed interim consolidated statements of income in accordance with IFRS, see Non-GAAP Financial Performance Measures in this MD&A.

The table below sets out variances in the key drivers of net income for the three and six months ended June 30, 2018 compared with the three and six months ended June 30, 2017:

(millions of United States dollars)	Three Months Ended June 30, 2018 vs. Three Months Ended June 30, 2017			Six Months Ended June 30, 2018 vs. Six Months Ended June 30, 2017

Increase in gold revenue	$	0.3		$	24.4
Decrease in silver revenue		(2.5	)		(2.8	)
Increase in net copper revenue		5.3			9.9
Increase in net zinc revenue		3.3			5.8
Increase in production costs due to effects of foreign currencies		(10.6	)		(29.3	)
Increase in production costs		(25.5	)		(61.6	)
Increase in exploration and corporate development expenses		(4.6	)		(9.5	)
Increase in amortization of property, plant and mine development		(10.0	)		(11.9	)
Increase in general and administrative expenses		(2.9	)		(5.6	)
Decrease in impairment loss on equity securities		5.8			5.8
Increase in finance costs		(7.5	)		(9.6	)
Change in loss (gain) on derivative financial instruments⁽ⁱ⁾		(7.0	)		(9.5	)
Increase in environmental remediation costs		(0.2	)		(0.1	)
Change in non-cash foreign currency translation		(1.2	)		3.1
Increase in income and mining taxes⁽ⁱ⁾		(26.6	)		(24.4	)
Other		34.0			34.4

Total net income variance⁽ⁱ⁾	$	(49.9	)	$	(80.9	)

Three Months Ended June 30, 2018 vs. Three Months Ended June 30, 2017

Revenues from mining operations increased to $556.3 million in the second quarter of 2018 compared with $549.9 million in the second quarter of 2017 primarily due to a 19.0% and 19.4% increase in the realized price of zinc and copper, respectively. In addition, sales volume increased by 81.1% and 6.8% for zinc and copper, respectively.

Production costs were $303.7 million in the second quarter of 2018, a 13.5% increase compared with $267.6 million in the second quarter of 2017 primarily due to increased underground mining and maintenance

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

costs at the LaRonde and Goldex mines, increased underground mining costs at the Pinos Altos mine and the impact of a stronger Canadian dollar and Euro relative to the US dollar.

Weighted average total cash costs per ounce of gold produced increased to $656 on a by-product basis and $736 on a co-product basis in the second quarter of 2018 compared with $556 on a by-product basis and $628 on a co-product basis in the second quarter of 2017 primarily due to decreased gold production as a result of lower gold grades and tonnes processed at the Meadowbank mine. For a reconciliation of total cash costs per ounce of gold produced on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (without deducting by-product metal revenues) to production costs as presented in the condensed interim consolidated statements of income in accordance with IFRS, see Non-GAAP Financial Performance Measures in this MD&A.

Exploration and corporate development expenses increased to $38.9 million in the second quarter of 2018 compared with $34.3 million in the second quarter of 2017 primarily due to an increase in spending at the Amaruq and Santa Gertrudis projects.

Amortization of property, plant and mine development increased by $10.0 million to $138.5 million between the second quarter of 2017 and the second quarter of 2018 primarily due to the timing of inventory at the Meadowbank and Pinos Altos mines.

General and administrative expense increased to $30.6 million during the second quarter of 2018 compared with $27.8 million during the second quarter of 2017 primarily due to increased compensation and benefits expenses between periods.

Other income increased to $29.5 million during the second quarter of 2018 compared with other expenses of $4.5 million during the second quarter of 2017 primarily due to a net gain from the sale of certain non-core properties.

During the second quarter of 2018, there was a non-cash foreign currency translation loss of $3.9 million attributable to a weakening of the Canadian dollar, Mexican Peso and Euro relative to the US dollar at June 30, 2018 compared to March 31, 2018 on the Company's net monetary assets denominated in foreign currencies. A non-cash foreign currency translation loss of $2.6 million was recorded during the comparative second quarter of 2017.

In the second quarter of 2018, the Company recorded income and mining taxes expense of $35.4 million on income before income and mining taxes of $40.4 million, resulting in an effective tax rate of 87.6%. In the second quarter of 2017, the Company recorded income and mining taxes expense of $8.8 million⁽ⁱ⁾ on income before income and mining taxes of $63.7 million⁽ⁱ⁾, resulting in an effective tax rate of 13.8%. The increase in the effective tax rate between the second quarter of 2017 and the second quarter of 2018 is primarily due to an increase in permanent differences and an increase in foreign exchange rate movements.

There are a number of factors that can significantly impact the Company's effective tax rate including varying rates in different jurisdictions, the non-recognition of certain tax assets, mining allowances, foreign currency exchange rate movements, changes in tax laws, the impact of specific transactions and assessments and the relative distribution of income in the Company's operating jurisdictions. As a result of these factors, the Company's effective tax rate is expected to fluctuate significantly in future periods.

Six Months Ended June 30, 2018 vs. Six Months Ended June 30, 2017

Revenues from mining operations increased to $1,134.7 million during the first six months of 2018 compared with $1,097.3 million during the first six months of 2017 primarily due to a 20.5% and 16.6% increase in the realized price of zinc and copper, respectively. In addition, sales volume increased by 45.7% and 5.6% for zinc and copper, respectively.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

Production costs were $599.0 million during the first six months of 2018, a 17.9% increase compared with $508.0 million in the first six months of 2017 primarily due to increased underground mining and mill maintenance costs at the LaRonde and Goldex mines, increased underground mining costs at the Pinos Altos mine and increased mill maintenance costs at the Kittila mine. Partially offsetting the total increase in production costs between the first six months of 2017 and the first six months of 2018 was lower mining costs from the Lapa mine as it approaches the end of operations.

Weighted average total cash costs per ounce of gold produced increased to $652 on a by-product basis and $735 on a co-product basis during the first six months of 2018 compared with $548 on a by-product basis and $622 on a co-product basis during the first six months of 2017 primarily due to decreased gold production as a result of lower gold grades and tonnes processed at the Meadowbank mine. For a reconciliation of total cash costs per ounce of gold produced on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before by-product metal revenues) to production costs as presented in the condensed interim consolidated statements of income in accordance with IFRS, see Non-GAAP Financial Performance Measures in this MD&A.

Exploration and corporate development expenses increased to $69.2 million during the first six months of 2018 compared with $59.6 million during the first six months of 2017 primarily due to an increase in spending at the Amaruq and Santa Gertrudis projects.

Amortization of property, plant and mine development increased by $11.9 million to $272.8 million between the first six months of 2017 and the first six months of 2018 due to the timing of inventory at the Meadowbank and Pinos Altos mines.

General and administrative expense increased to $64.1 million during the first six months of 2018 compared with $58.5 million during the first six months of 2017 primarily due to increased compensation and benefits expenses between periods.

Other income increased to $31.0 million during the first six months of 2018 compared with other expenses of $3.3 million during the first six months of 2017 primarily due to a net gain from the sale of certain non-core properties.

During the first six months of 2018, there was a non-cash foreign currency translation loss of $0.4 million attributable to a weakening of the Canadian dollar, Mexican peso and European Euro versus the US dollar at June 30, 2018 relative to December 31, 2017 on the Company's net monetary assets denominated in foreign currencies. A non-cash foreign currency translation loss of $3.5 million was recorded during the comparative first six months of 2017.

In the first six months of 2018, the Company recorded income and mining taxes expense of $59.9 million on income before income and mining taxes of $109.8 million, resulting in an effective tax rate of 54.6%. In the first six months of 2017, the Company recorded income and mining taxes expense of $35.5 million⁽ⁱ⁾ on income before income and mining taxes of $166.3 million⁽ⁱ⁾, resulting in an effective tax rate of 21.3%. The increase in the effective tax rate between the first six months of 2017 and the first six months of 2018 is due primarily to an increase in permanent differences and an increase in foreign exchange rate movements.

LaRonde mine

At the LaRonde mine, gold production increased by 17.3% to 84,526 ounces in the second quarter of 2018 compared with 72,090 ounces in the second quarter of 2017, primarily due to higher gold grade ore being processed. Production costs at the LaRonde mine were $62.9 million in the second quarter of 2018, an increase of 34.9% compared with production costs of $46.6 million in the second quarter of 2017, driven primarily by increased underground mining and mill maintenance costs and the timing of inventory sales.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

Gold production increased by 15.4% to 174,311 ounces in the first six months of 2018 compared with 151,002 ounces in the first six months of 2017 at the LaRonde mine, primarily due to higher gold grade ore being processed. Production costs at the LaRonde mine were $127.8 million in the first six months of 2018, an increase of 40.5% compared with production costs of $91.0 million in the first six months of 2017, driven primarily by increased underground mining and mill maintenance costs and the timing of inventory sales.

LaRonde Zone 5 mine

The LaRonde Zone 5 mine achieved commercial production on June 1, 2018. In the second quarter of 2018, the LaRonde Zone 5 mine produced 4,601 ounces of gold and incurred production costs of $0.5 million.

Lapa mine

At the Lapa mine, gold production decreased by 8.5% to 14,533 ounces in the second quarter of 2018 compared with 15,881 ounces in the second quarter of 2017, primarily due to a decrease in the tonnes of ore being processed. Production costs at the Lapa mine were $10.8 million in the second quarter of 2018, a decrease of 8.6% compared with the production costs of $11.8 million in the second quarter of 2017 driven primarily by the expected decrease in underground mining and development costs as the mine approaches the end of operations.

Gold production decreased by 48.0% to 16,255 ounces in the first six months of 2018 compared with 31,241 ounces in the first six months of 2017 at the Lapa mine, primarily due to a decrease in the tonnes of ore being processed. Production costs at the Lapa mine were $11.3 million in the first six months of 2018, a 54.2% decrease compared with production costs of $24.6 million in the first six months of 2017, driven primarily by the expected decrease in mill throughput as the mine approaches the end of operations.

Goldex mine

At the Goldex mine, gold production increased by 0.5% to 30,480 ounces in the second quarter of 2018 compared with 30,337 ounces in the second quarter of 2017, primarily due to higher gold grade ore being processed. Production costs at the Goldex mine were $20.9 million in the second quarter of 2018, an increase of 42.4% compared with production costs of $14.7 million in the second quarter of 2017, driven primarily by an increase in the cost of maintenance contractors and consumables.

Gold production decreased by 7.3% to 58,404 ounces in the first six months of 2018 compared with 63,008 ounces in the first six months of 2017 at the Goldex mine, primarily due to lower gold grade and a decrease in the tonnes of ore being processed. Production costs at the Goldex mine were $39.5 million in the first six months of 2018, an increase of 25.2% compared with production costs of $31.6 million in the first six months of 2017, driven primarily by an increase in the cost of maintenance contractors and consumables.

Meadowbank mine

At the Meadowbank mine, gold production decreased by 37.4% to 59,627 ounces in the second quarter of 2018 compared with 95,289 ounces in the second quarter of 2017, primarily due to lower gold grade ore and a decrease in the tonnes of ore being processed. Production costs at the Meadowbank mine were $56.5 million in the second quarter of 2018, an increase of 3.8% compared with production costs of $54.4 million in the second quarter of 2017, driven primarily by increased maintenance costs on excavation and drilling equipment, increased contractor and re-handling costs.

Gold production decreased by 33.0% to 121,074 ounces in the first six months of 2018 compared with 180,659 ounces in the first six months of 2017 at the Meadowbank mine, primarily due to lower gold grade ore and a decrease in the tonnes of ore being processed. Production costs at the Meadowbank mine were

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

$118.0 million in the first six months of 2018, an increase of 8.9% compared with production costs of $108.4 million in the first six months of 2017, driven primarily by increased maintenance costs on excavation and drilling equipment, increased contractor and re-handling costs.

Canadian Malartic mine

Agnico Eagle and Yamana Gold Inc. ("Yamana") jointly acquired 100.0% of Osisko on June 16, 2014 by way of a statutory plan of arrangement (the "Osisko Arrangement"). As a result of the Osisko Arrangement, Agnico Eagle and Yamana each indirectly own 50.0% of Canadian Malartic Corporation ("CMC") and the Canadian Malartic General Partnership ("the Partnership" or "Canadian Malartic GP" or "CMGP"), which holds the Canadian Malartic mine in northwestern Quebec.

At the Canadian Malartic mine, attributable gold production increased by 11.3% to 91,863 ounces in the second quarter of 2018 compared with 82,509 ounces in the second quarter of 2017, primarily due to higher gold grade and an increase in the tonnes of ore being processed. Attributable production costs at the Canadian Malartic mine were $50.6 million in the second quarter of 2018, a decrease of 4.2% compared with production costs of $52.8 million in the second quarter of 2017, driven primarily by a decrease in contractor costs in the mill, partially offset by higher fuel costs resulting from higher commodity prices.

Attributable gold production increased by 13.9% to 175,266 ounces in the first six months of 2018 compared with 153,891 ounces in the first six months of 2017, primarily due to higher gold grade and an increase in the tonnes of ore being processed. Attributable production costs at the Canadian Malartic mine were $97.9 million in the first six months of 2018, an increase of 14.8% compared with production costs of $85.3 million in the first six months of 2017, driven primarily by higher fuel costs resulting from higher commodity prices, partially offset by lower re-handling costs.

On August 2, 2016, the Partnership was served with a class action lawsuit filed in the Superior Court of Quebec with respect to allegations involving the Canadian Malartic mine. The complaint is in respect of "neighbourhood annoyances" arising from dust, noise, vibrations and blasts at the mine. The plaintiffs are seeking damages in an unspecified amount as well as punitive damages in the amount of C$20 million. The class action was certified in May 2017. In November 2017, a declaratory judgment was issued allowing the Partnership to settle individually with class members for 2017. On December 11, 2017, hearings were completed in respect of certain preliminary matters, including the Partnership's application for partial dismissal of the class action. Judgment was rendered on the preliminary matters and the partial dismissal of the class action was granted, removing the period of August 2013 to June 2014 from the class period. The Company and the Partnership will take all necessary steps to defend themselves from this lawsuit.

On August 15, 2016, the Partnership received notice of an application for injunction relating to the Canadian Malartic mine, which had been filed under the Environment Quality Act (Quebec). A hearing related to an interlocutory injunction was completed on March 17, 2017 and a decision of the Superior Court of Quebec dismissed the injunction. An application for permanent injunction is currently pending. The Company and the Partnership have reviewed the injunction request, consider the request without merit and will take all reasonable steps to defend against this injunction. These measures include a motion for the dismissal of the application for injunction, which has been filed and will be heard at a date that has yet to be determined. While at this time the potential impacts of the injunction cannot be definitively determined, the Company expects that if the injunction were to be granted, there would be a negative impact on the operations of the Canadian Malartic mine, which could include a reduction in production and shift reductions resulting in the loss of jobs.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

application. The hearing on the merits is scheduled to take place in October 2018. While the Company believes it is highly unlikely that the annulment will be granted, the Company expects that if the annulment were to be granted, there would be a negative impact on the operations of the Canadian Malartic mine, which could include a reduction in anticipated future production.

Kittila mine

At the Kittila mine, gold production decreased by 10.8% to 42,049 ounces in the second quarter of 2018 compared with 47,156 ounces in the second quarter of 2017, primarily due to lower gold grade, a decrease in the tonnes of ore processed and a lower mill recovery rate. Production costs at the Kittila mine were $38.8 million in the second quarter of 2018, an increase of 6.4% compared with production costs of $36.4 million in the second quarter of 2017, driven primarily by higher mill maintenance costs during a planned mill shutdown and the strengthening of the Euro relative to the US dollar.

Gold production decreased by 8.7% to 90,167 ounces in the first six months of 2018 compared with 98,777 ounces in the first six months of 2017 at the Kittila mine, primarily due to lower gold grade ore being processed and a lower mill recovery rate. Production costs at the Kittila mine were $81.5 million in the first six months of 2018, an increase of 12.6% compared with production costs of $72.3 million in the first six months of 2017, driven primarily by higher contractor and mill maintenance costs during a planned mill shutdown and the strengthening of the Euro relative to the US dollar.

Pinos Altos mine

At the Pinos Altos mine, gold production decreased by 9.4% to 43,646 ounces in the second quarter of 2018 compared with 48,196 ounces in the second quarter of 2017, primarily due to lower gold grade and a decrease in the tonnes of ore processed through the mill. Production costs at the Pinos Altos mine were $34.7 million in the second quarter of 2018, an increase of 21.2% compared with production costs of $28.7 million in the second quarter of 2017, driven primarily by higher underground mining and re-handling costs, partially offset by the weakening of the Mexican peso relative to the US dollar between periods.

Gold production decreased by 8.6% to 85,482 ounces in the first six months of 2018 compared with 93,556 ounces in the first six months of 2017 at the Pinos Altos mine, primarily due to lower gold grade ore and a decrease in the tonnes of ore processed through the mill. Production costs at the Pinos Altos mine were $69.4 million in the first six months of 2018, an increase of 32.5% compared with production costs of $52.4 million in the first six months of 2017, driven primarily by the timing of inventory sales and an increase in underground mining and mill costs and the strengthening of the Mexican peso relative to the US dollar between periods.

Creston Mascota mine

At the Creston Mascota mine, gold production decreased by 27.8% to 8,716 ounces in the second quarter of 2018 compared with 12,074 ounces in the second quarter of 2017, primarily due to lower gold grade and a decrease in the tonnes of ore processed as the mine operations transition from the Creston Mascota pit to the Bravo pit. Production costs at the Creston Mascota mine were $10.2 million in the second quarter of 2018, an increase of 38.9% compared with production costs of $7.4 million in the second quarter of 2017, driven primarily by the timing of inventory sales, partially offset by a decrease in mining costs and the weakening of the Mexican peso relative to the US dollar between periods.

Gold production decreased by 11.2% to 20,704 ounces in the first six months of 2018 compared with 23,318 ounces in the first six months of 2017 at the Creston Mascota mine, primarily due to lower gold grade and a decrease in the tonnes of ore processed. Production costs at the Creston Mascota mine were $19.9 million in the first six months of 2018, an increase of 38.6% compared with production costs of $14.3 million in the first six

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

months of 2017, driven primarily by the timing of inventory sales and the strengthening of the Mexican peso relative to the US dollar between periods, partially offset by a decrease in mine production costs.

La India mine

At the La India mine, gold production increased by 2.9% to 24,920 ounces in the second quarter of 2018 compared with 24,211 ounces in the second quarter of 2017, primarily due to an increase in the tonnes of ore processed. Production costs at the La India mine were $17.8 million in the second quarter of 2018, an increase of 19.1% compared with production costs of $14.9 million in the second quarter of 2017, driven primarily by the timing of inventory sales and increased heap leach costs resulting from a higher consumption of reagents and general materials to facilitate a higher amount of ore tonnes processed.

Gold production decreased by 5.0% to 47,975 ounces in the first six months of 2018 compared with 50,507 ounces in the first six months of 2017, primarily due to lower heap leach recoveries, partially offset by an increase in the tonnes of ore processed. Production costs at the La India mine were $33.2 million in the first six months of 2018, an increase of 18.3% compared with production costs of $28.1 million in the first six months of 2017, driven primarily by increased heap leach costs resulting from a higher consumption of reagents and general materials to facilitate a higher amount of ore processed and the strengthening of the Mexican peso relative to the US dollar between periods.

Note:

(i): The Company has adopted IFRS 9 — Financial instruments ("IFRS 9") effective January 1, 2018 on a retrospective basis and the comparative amounts have been adjusted accordingly. For more information please see Note 3 in the Company's condensed interim consolidated financial statements.

Liquidity and Capital Resources

As at June 30, 2018, the Company's cash and cash equivalents, short-term investments and current restricted cash totaled $721.6 million compared with $644.3 million at December 31, 2017. The Company's policy is to invest excess cash in highly liquid investments of the highest credit quality to reduce risks associated with these investments. Such investments with remaining maturities of greater than three months and less than one year at the time of purchase are classified as short-term investments. Decisions regarding the length of maturities are based on cash flow requirements, rates of return and various other factors.

Working capital (current assets less current liabilities) decreased to $1,115.9 million at June 30, 2018 compared with $1,127.7 million at December 31, 2017.

Operating Activities

Cash provided by operating activities decreased to $120.1 million in the second quarter of 2018 compared with $184.0 million in the second quarter of 2017 primarily due to a decrease in payable gold ounces sold and less favourable working capital changes, partially offset by higher realized gold prices between periods.

Cash provided by operating activities decreased to $327.8 million in the first six months of 2018 compared with $406.6 million in the first six months of 2017 primarily due to a 4.2% decrease in payable gold ounces sold, partially offset by higher realized gold, zinc and copper prices between periods.

Investing Activities

Cash used in investing activities decreased to $201.4 million in the second quarter of 2018 compared with $203.4 million in the second quarter of 2017 primarily due to a $57.9 million increase in capital expenditures between periods, partially offset by a $35.1 million increase in proceeds from the sale of property, plant and

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

mine development. The increase in capital expenditures between periods is mainly attributable to construction expenditures incurred in the second quarter of 2018 related to the Meliadine project.

In the second quarter of 2018, the Company purchased $3.0 million in equity securities compared with $13.9 million in the second quarter of 2017. In the second quarter of 2018, the Company received net proceeds of $16.3 million from the sale of equity securities compared with nil in the second quarter of 2017. The Company's equity securities consist primarily of investments in common shares of entities in the mining industry.

Cash used in investing activities increased to $556.1 million in the first six months of 2018 compared with $357.1 million in the first six months of 2017 primarily due to an asset acquisition for $162.5 million and a $115.4 million increase in capital expenditures between periods, partially offset by a $35.1 million increase in proceeds from the sale of property, plant and mine development. The increase in capital expenditures between periods is mainly attributable to construction expenditures incurred in the first six months of 2018 related to the Meliadine project.

In the first six months of 2018, the Company purchased $7.5 million in equity securities and other investments compared with $36.4 million in the first six months of 2017. In the first six months of 2018, the Company received net proceeds of $16.3 million from the sale of equity securities compared with $0.2 million in the first six months of 2017.

On June 11, 2018, the Company closed a transaction with a subsidiary of Newmont Mining Corp ("Newmont"), whereby Newmont purchased Agnico Eagle's 51% interest in the West Pequop Joint Venture, and the Company's 100% interest in the Summit and PQX properties in northeastern Nevada (collectively, the "Nevada Properties"). Under the purchase and sale agreement, the Company received a cash payment of $35.0 million and was granted a 0.8% net smelter return ("NSR") royalty on the Nevada Properties held by the West Pequop Joint Venture and a 1.6% NSR on the Summit and PQX properties.

On March 28, 2018, the Company acquired 100% of the Canadian exploration assets of CMC, including the Kirkland Lake and Hammond Reef Gold projects (the "Transaction") by way of an asset purchase agreement (the "Agreement") dated December 21, 2017. On the closing of the transactions relating to the Agreement, Agnico had acquired all of Yamana's indirect 50% interest in the Canadian exploration assets of CMC, giving Agnico Eagle 100% ownership of CMC's interest in the assets on closing of the Transaction. Pursuant to the Agreement, the effective consideration for the exploration assets after the distribution of the sale proceeds by CMC to its shareholders totaled $162.5 million in cash paid on closing. The acquisition was accounted for by the Company as an asset acquisition and transaction costs associated with the acquisition totaling $2.9 million were capitalized to the mining properties acquired.

On February 15, 2018, the Company completed the purchase of 1,740,500 units ("Units") of Orla Mining Ltd. ("Orla") at a price of C$1.75 per Unit for total cash consideration of C$3.0 million. Each Unit is comprised of one common share of Orla (a "Common Share") and one-half of one common share purchase warrant of Orla (each full common share purchase warrant, a "Warrant"). Each Warrant entitles the holder to acquire one Common Share at a price of C$2.35 prior to February 15, 2021. Upon closing of the transaction, the Company held 17,613,835 Common Shares and 870,250 Warrants, representing approximately 9.86% of the issued and outstanding Common Shares on a non-diluted basis and approximately 10.30% of the issued and outstanding Common Shares on a partially-diluted basis assuming exercise of the Warrants held by the Company.

Financing Activities

Cash provided by financing activities was $340.5 million in the second quarter of 2018 compared with cash provided by financing activities of $169.8 million in the second quarter of 2017 primarily due to a $130.4 million decrease in the net repayment of long-term debt and a $50.0 million increase in notes issuances between periods.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

Cash provided by financing activities decreased to $306.2 million in the first six months of 2018 compared with $351.4 million in the first six months of 2017 primarily due to a $221.3 million decrease in net proceeds from the issuance of common shares, partially offset by a $130.4 million decrease in the net repayment of long-term debt and a $50.0 million increase in notes issuances between periods.

The Company issued common shares for net proceeds of $13.0 million in the second quarter of 2018 and $22.9 million in the second quarter of 2017 attributable to employee stock option plan exercises, issuances under the incentive share purchase plan and the dividend reinvestment plan. Net proceeds from the issuance of common shares amounted to $28.6 million in the first six months of 2018 attributable to employee stock option plan exercises, issuances under the incentive share purchase plan and the dividend reinvestment plan. Net proceeds from the issuance of common shares amounted to $249.9 million in the first six months of 2017 attributable to an equity issuance directly to one institutional investor, employee stock option plan exercises, issuances under the incentive share purchase plan and the dividend reinvestment plan.

On April 26, 2018, Agnico Eagle declared a quarterly cash dividend of $0.11 per common share paid on June 15, 2018 to holders of record of the common shares of the Company on June 1, 2018. Agnico Eagle has declared a cash dividend every year since 1983. In the second quarter of 2018, the Company paid dividends of $19.4 million, an increase of $0.6 million compared to $18.8 million paid in the second quarter of 2017. In the first six months of 2018, the Company paid dividends of $42.1 million, an increase of $3.8 million compared to $38.2 million paid in the first six months of 2017. Although the Company expects to continue paying dividends, future dividends will be at the discretion of the Board and will be subject to factors such as income, financial condition and capital requirements.

On April 5, 2018, the Company closed a note purchase agreement with certain institutional investors, providing for the issuance of guaranteed senior unsecured notes consisting of $45.0 million 4.38% Series A senior notes due 2028, $55.0 million 4.48% Series B senior notes due 2030 and $250.0 million 4.63% Series C senior notes due 2033 (collectively, the "2018 Notes"). Upon issuance, the 2018 Notes had a weighted average maturity of 13.9 years and weighted average yield of 4.57%.

On October 25, 2017, the Company amended its $1.2 billion Credit Facility (the "Credit Facility") to extend the maturity date from June 22, 2021 to June 22, 2022. As at June 30, 2018, the Company's outstanding balance under the Credit Facility was nil. Credit Facility availability is reduced by outstanding letters of credit, amounting to $0.8 million at June 30, 2018. As at June 30, 2018, $1,199.2 million was available for future drawdown under the Credit Facility.

On June 29, 2016, the Company entered into a standby letter of credit facility with a financial institution providing for a C$100.0 million uncommitted letter of credit facility (the "Third LC Facility"). Letters of credit issued under the Third LC Facility may be used to support the reclamation obligations or non-financial or performance obligations of the Company or its subsidiaries. The obligations of the Company under the Third LC Facility are guaranteed by certain of its subsidiaries. As at June 30, 2018, total letters of credit outstanding under the Third LC Facility amounted to $39.1 million.

On September 23, 2015, the Company entered into a standby letter of credit facility with a financial institution providing for a C$150.0 million uncommitted letter of credit facility (as amended, the "Second LC Facility"). The Second LC Facility may be used by the Company to support the reclamation obligations of the Company, its subsidiaries or any entity in which the Company has a direct or indirect interest or the performance obligations (other than with respect to indebtedness for borrowed money) of the Company, its subsidiaries or any entity in which the Company has a direct or indirect interest that are not directly related to reclamation obligations. Payment and performance of the Company's obligations under the Second LC Facility are supported by an account performance security guarantee issued by Export Development Canada in favour of the lender. As at June 30, 2018, total letters of credit outstanding under the Second LC Facility amounted to $98.4 million.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

On July 31, 2015, the Company amended its credit agreement with another financial institution relating to its uncommitted letter of credit facility (as amended, the "First LC Facility"). Effective September 27, 2016, the amount available under the First LC Facility was increased to C$350.0 million. The obligations of the Company under the First LC Facility are guaranteed by certain of its subsidiaries. The First LC Facility may be used to support the reclamation obligations or non-financial or performance obligations of the Company or its subsidiaries. As at June 30, 2018, $170.8 million had been drawn under the First LC Facility.

Agnico Eagle's indirect attributable interest in the finance lease obligations of Canadian Malartic GP include secured finance lease obligations provided in separate tranches with remaining maturities up to 2019 and an average effective annual interest rate of 4.3%. As at June 30, 2018, the Company's attributable finance lease obligations were $2.5 million.

The Company was in compliance with all covenants contained in the Credit Facility, 2018 Notes, 2017 Notes, 2016 Notes, 2015 Note, 2012 Notes, 2010 Notes, First LC Facility, Second LC Facility, and the Third LC Facility as at June 30, 2018.

Risk Profile

Volatility remains high in global financial markets and weakness in the global economy continues to have an impact on the profitability and liquidity of many businesses. Although there are signs of stabilization, the timing of a return to historical market conditions is uncertain. Weak economic conditions and volatile financial markets may have a significant impact on Agnico Eagle's cost and availability of financing and overall liquidity. The volatility in gold, silver, zinc and copper prices directly affects Agnico Eagle's revenues, earnings and cash flow. Volatile energy, commodity and consumables prices and currency exchange rates impact production costs. The volatility of global stock markets impacts the valuation of the Company's equity securities.

Disclosure Controls and Procedures and Internal Controls over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting ("ICFR") and disclosure controls and procedures ("DC&P").

ICFR is a framework designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Management has used the Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) in order to assess the effectiveness of the Company's ICFR.

DC&P form a broader framework designed to provide reasonable assurance that information required to be disclosed by the Company in its annual and interim filings and other reports filed under securities legislation is recorded, processed, summarized and reported within the time frame specified in securities legislation and includes controls and procedures designed to ensure that information required to be disclosed by the Company in its annual and interim filings and other reports submitted under securities legislation is accumulated and communicated to the Company's management to allow timely decisions regarding required disclosure.

Together, the ICFR and DC&P frameworks provide internal control over financial reporting and disclosure. The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be disclosed in the Company's annual and interim filings and other reports filed under securities legislation, is accumulated and communicated in a timely fashion. Due to their inherent limitations, the Company acknowledges that, no matter how well designed, ICFR and DC&P can provide only reasonable assurance of achieving the desired control objectives and as such may not prevent or detect all misstatements. Further, the effectiveness of ICFR is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may change.

There have been no significant changes in the Company's internal control over financial reporting in the second quarter of 2018 that have materially affected, or are reasonably likely to materially affect, the reliability of financial reporting.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

Non-GAAP Financial Performance Measures

This MD&A presents certain financial performance measures, including adjusted net income, total cash costs per ounce of gold produced (on both a by-product and co-product basis), minesite costs per tonne and all-in sustaining costs per ounce of gold produced (on both a by-product and co-product basis), that are not recognized measures under IFRS. This data may not be comparable to data presented by other gold producers. Non-GAAP financial performance measures should be considered together with other data prepared in accordance with IFRS.

Adjusted Net Income

Adjusted net income is not a recognized measure under IFRS and this data may not be comparable to data presented by other gold producers. This measure is calculated by adjusting net income as recorded in the condensed interim consolidated statements of income for non-recurring, unusual and other items. The Company believes that this generally accepted industry measure allows the evaluation of the results of continuing operations and is useful in making comparisons between periods. Adjusted net income is intended to provide investors with information about the Company's continuing income generating capabilities. Management uses this measure to monitor and plan for the operating performance of the Company in conjunction with other data prepared in accordance with IFRS. Beginning in 2016, the Company began to exclude stock based compensation expense from the calculation of adjusted net income. Stock option expense for the three months ended June 30, 2018 was $3.8 million (three months ended June 30, 2017 — $3.8 million). Stock option expense for the six months ended June 30, 2018 was $11.6 million (six months ended June 30, 2017 — $11.4 million).

	Three Months Ended June 30,						Six Months Ended June 30,

(thousands of United States dollars)	2018			2017⁽ⁱ⁾			2018			2017⁽ⁱ⁾
Net income for the period	$	4,972		$	54,876		$	49,902		$	130,826
Impairment loss on equity securities		—			5,814			—			5,814
Foreign currency translation loss		3,875			2,647			390			3,499
Loss (gain) on derivative financial instruments		4,440			(2,577	)		3,134			(6,377	)
Income and mining taxes adjustments⁽ⁱⁱ⁾		14,312			(11,602	)		7,848			(22,727	)
Other⁽ⁱⁱⁱ⁾		(24,953	)		5,688			(24,419	)		7,834

Adjusted net income for the period	$	2,646		$	54,846		$	36,855		$	118,869

Net income per share — basic	$	0.02		$	0.24		$	0.21		$	0.57
Net income per share — diluted	$	0.02		$	0.23		$	0.21		$	0.57
Adjusted net income per share — basic	$	0.01		$	0.24		$	0.16		$	0.52
Adjusted net income per share — diluted	$	0.01		$	0.23		$	0.16		$	0.51

Notes:

(i): The Company has adopted IFRS 9 effective January 1, 2018 on a retrospective basis and the comparative amounts above have been adjusted accordingly. For more information please see Note 3 in the Company's condensed interim consolidated financial statements.
(ii): Income and mining tax adjustments reflect foreign currency translation recorded to the income and mining taxes expense, recognition of previously unrecognized capital losses, the result of income and mining tax audits, impact of tax law changes and reflective adjustments to prior period operating results.
(iii): The Company includes certain adjustments in "Other" to the extent that management believes that these items are not reflective of the underlying performance of the Company's core operating business. Examples of items historically included in "Other" include changes in estimates of asset retirement obligations at closed sites, gains and losses on the disposal of assets and other non-recurring items.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

Total Cash Costs per Ounce of Gold Produced and Minesite Costs per Tonne

The Company believes that total cash costs per ounce of gold produced and minesite costs per tonne are realistic indicators of operating performance and facilitate period over period comparisons. However, both of these non-GAAP generally accepted industry measures should be considered together with other data prepared in accordance with IFRS. These measures, taken by themselves, are not necessarily indicative of operating costs or cash flow measures prepared in accordance with IFRS.

Total cash costs per ounce of gold produced is reported on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (without deducting by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the condensed interim consolidated statements of income for by-product revenues, inventory production costs, smelting, refining and marketing charges and other adjustments, and then dividing by the number of ounces of gold produced. Total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as total cash costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made. Accordingly, the calculation of total cash costs per ounce of gold produced on a co-product basis does not reflect a reduction in production costs or smelting, refining and marketing charges associated with the production and sale of by-product metals. Total cash costs per ounce of gold produced is intended to provide information about the cash generating capabilities of the Company's mining operations. Management also uses these measures to monitor the performance of the Company's mining operations. As market prices for gold are quoted on a per ounce basis, using the total cash cost per ounce of gold produced on a by-product basis measure allows management to assess a mine's cash generating capabilities at various gold prices. Management is aware that these per ounce measures of performance can be affected by fluctuations in exchange rates and, in the case of total cash costs per ounce of gold produced on a by-product basis, by-product metal prices. Management compensates for these inherent limitations by using these measures in conjunction with minesite costs per tonne (discussed below) as well as other data prepared in accordance with IFRS. Management also performs sensitivity analysis in order to quantify the effects of fluctuating metal prices and exchange rates.

Agnico Eagle's primary business is gold production and the focus of its current operations and future development is on maximizing returns from gold production, with other metal production being incidental to the gold production process. Accordingly, all metals other than gold are considered by-products.

Total cash costs per ounce of gold produced is reported on a by-product basis because (i) the majority of the Company's revenues are gold revenues, (ii) the Company mines ore, which contains gold, silver, zinc, copper and other metals, (iii) it is not possible to specifically assign all costs to revenues from the gold, silver, zinc, copper and other metals the Company produces and (iv) it is a method used by management and the Board to monitor operations.

Minesite costs per tonne is calculated by adjusting production costs as shown in the condensed interim consolidated statements of income for inventory production costs and other adjustments and then dividing by tonnes of ore processed. As the total cash costs per ounce of gold produced measure can be impacted by fluctuations in by-product metal prices and exchange rates, management believes that the minesite costs per tonne measure provides additional information regarding the performance of mining operations. Management also uses minesite costs per tonne to determine the economic viability of mining blocks. As each mining block is evaluated based on the net realizable value of each tonne mined, in order to be economically viable the estimated revenue on a per tonne basis must be in excess of the minesite costs per tonne. Management is aware that this per tonne measure of performance can be impacted by fluctuations in production levels and compensates for this inherent limitation by using this measure in conjunction with production costs prepared in accordance with IFRS.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

The following tables set out a reconciliation of total cash costs per ounce of gold produced (on both a by-product basis and co-product basis) and minesite costs per tonne to production costs, exclusive of amortization, as presented in the condensed interim consolidated statements of income in accordance with IFRS.

Total Production Costs by Mine

(thousands of United States dollars)	Three Months Ended June 30, 2018		Three Months Ended June 30, 2017		Six Months Ended June 30, 2018		Six Months Ended June 30, 2017

LaRonde mine	$	62,908	$	46,641	$	127,844	$	91,006
LaRonde Zone 5 mine		521		—		521		—
Lapa mine		10,757		11,762		11,285		24,649
Goldex mine		20,943		14,706		39,527		31,571
Meadowbank mine		56,483		54,397		117,973		108,375
Canadian Malartic mine⁽ⁱ⁾		50,557		52,752		97,877		85,253
Kittila mine		38,759		36,420		81,475		72,339
Pinos Altos mine		34,743		28,660		69,442		52,392
Creston Mascota mine		10,226		7,361		19,877		14,339
La India mine		17,798		14,942		33,200		28,056

Production costs per the condensed interim consolidated statements of income	$	303,695	$	267,641	$	599,021	$	507,980

Reconciliation of Production Costs to Total Cash Costs per Ounce of Gold Produced⁽ⁱⁱ⁾ by Mine and Reconciliation of Production Costs to Minesite Costs per Tonne⁽ⁱⁱⁱ⁾ by Mine

(thousands of United States dollars, except as noted)

LaRonde Mine Per Ounce of Gold Produced⁽ⁱⁱ⁾	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017						Six Months Ended June 30, 2018						Six Months Ended June 30, 2017

	(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)
Gold production (ounces)					84,526						72,090						174,311						151,002
Production costs	$	62,908		$	744		$	46,641		$	647		$	127,844		$	733		$	91,006		$	603
Inventory and other adjustments^(iv)		(10,336	)		(122	)		2,839			39			(17,867	)		(102	)		10,679			70

Cash operating costs (co-product basis)	$	52,572		$	622		$	49,480		$	686		$	109,977		$	631		$	101,685		$	673
By-product metal revenues		(19,152	)		(227	)		(14,727	)		(204	)		(38,212	)		(219	)		(30,312	)		(200	)

Cash operating costs (by-product basis)	$	33,420		$	395		$	34,753		$	482		$	71,765		$	412		$	71,373		$	473

LaRonde Mine Per Tonne⁽ⁱⁱⁱ⁾	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017						Six Months Ended June 30, 2018						Six Months Ended June 30, 2017

	(thousands)			($ per tonne)			(thousands)			($ per tonne)			(thousands)			($ per tonne)			(thousands)			($ per tonne)
Tonnes of ore milled (thousands of tonnes)					507						520						1,038						1,079
Production costs	$	62,908		$	124		$	46,641		$	90		$	127,844		$	123		$	91,006		$	84
Production costs (C$)	C$	79,891		C$	158		C$	61,574		C$	118		C$	162,023		C$	156		C$	120,798		C$	112
Inventory and other adjustments (C$)^(v)		(19,335	)		(38	)		(3,055	)		(5	)		(37,320	)		(36	)		(1,559	)		(1	)

Minesite operating costs (C$)	C$	60,556		C$	120		C$	58,519		C$	113		C$	124,703		C$	120		C$	119,239		C$	111

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

LaRonde Zone 5 Mine Per Ounce of Gold Produced^(ii)(vi)	Three Months Ended June 30, 2018				Three Months Ended June 30, 2017				Six Months Ended June 30, 2018				Six Months Ended June 30, 2017

	(thousands)		($ per ounce)		(thousands)		($ per ounce)		(thousands)		($ per ounce)		(thousands)		($ per ounce)
Gold production (ounces)				4,601				—				4,601				—
Production costs	$	521	$	113	$	—	$	—	$	521	$	113	$	—	$	—
Inventory and other adjustments^(iv)		3,141		683		—		—		3,141		683		—		—

Cash operating costs (co-product basis)	$	3,662	$	796	$	—	$	—	$	3,662	$	796	$	—	$	—
By-product metal revenues		—		—		—		—		—		—		—		—

Cash operating costs (by-product basis)	$	3,662	$	796	$	—	$	—	$	3,662	$	796	$	—	$	—

LaRonde Zone 5 Mine Per Tonne^(iii)(vi)	Three Months Ended June 30, 2018				Three Months Ended June 30, 2017				Six Months Ended June 30, 2018				Six Months Ended June 30, 2017

	(thousands)		($ per tonne)		(thousands)		($ per tonne)		(thousands)		($ per tonne)		(thousands)		($ per tonne)
Tonnes of ore milled (thousands of tonnes)				56				—				56				—
Production costs	$	521	$	9	$	—	$	—	$	521	$	9	$	—	$	—
Production costs (C$)	C$	681	C$	12	C$	—	C$	—	C$	681	C$	12	C$	—	C$	—
Inventory and other adjustments (C$)^(v)		4,102		73		—		—		4,102		73		—		—

Minesite operating costs (C$)	$	4,783	$	85	$	—	$	—	$	4,783	$	85	$	—	$	—

Lapa Mine Per Ounce of Gold Produced⁽ⁱⁱ⁾	Three Months Ended June 30, 2018					Three Months Ended June 30, 2017						Six Months Ended June 30, 2018					Six Months Ended June 30, 2017

	(thousands)			($ per ounce)		(thousands)			($ per ounce)			(thousands)			($ per ounce)		(thousands)			($ per ounce)
Gold production (ounces)					14,533					15,881						16,255					31,241
Production costs	$	10,757		$	740	$	11,762		$	741		$	11,285		$	694	$	24,649		$	789
Inventory and other adjustments^(iv)		799			55		(382	)		(24	)		2,094			129		(140	)		(4	)

Cash operating costs (co-product basis)	$	11,556		$	795	$	11,380		$	717		$	13,379		$	823	$	24,509		$	785
By-product metal revenues		(4	)		—		(80	)		(5	)		(9	)		—		(94	)		(4	)

Cash operating costs (by-product basis)	$	11,552		$	795	$	11,300		$	712		$	13,370		$	823	$	24,415		$	781

Lapa Mine Per Tonne⁽ⁱⁱⁱ⁾	Three Months Ended June 30, 2018				Three Months Ended June 30, 2017						Six Months Ended June 30, 2018				Six Months Ended June 30, 2017

	(thousands)		($ per tonne)		(thousands)			($ per tonne)			(thousands)		($ per tonne)		(thousands)			($ per tonne)
Tonnes of ore milled (thousands of tonnes)				109					134					126					264
Production costs	$	10,757	$	99	$	11,762		$	88		$	11,285	$	90	$	24,649		$	93
Production costs (C$)	C$	13,720	C$	126	C$	15,790		C$	118		C$	14,395	C$	114	C$	33,049		C$	125
Inventory and other adjustments (C$)^(v)		980		9		(537	)		(4	)		2,661		21		(476	)		(1	)

Minesite operating costs (C$)	C$	14,700	C$	135	C$	15,253		C$	114		C$	17,056	C$	135	C$	32,573		C$	124

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

Goldex Mine Per Ounce of Gold Produced^(ii)(vii)	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017					Six Months Ended June 30, 2018					Six Months Ended June 30, 2017

	(thousands)			($ per ounce)			(thousands)			($ per ounce)		(thousands)			($ per ounce)		(thousands)			($ per ounce)
Gold production (ounces)					30,480						24,691					58,404					54,967
Production costs	$	20,943		$	687		$	14,706		$	596	$	39,527		$	677	$	31,571		$	574
Inventory and other adjustments^(iv)		(213	)		(7	)		193			7		24			—		(559	)		(10	)

Cash operating costs (co-product basis)	$	20,730		$	680		$	14,899		$	603	$	39,551		$	677	$	31,012		$	564
By-product metal revenues		(10	)		—			(7	)		—		(14	)		—		(15	)		—

Cash operating costs (by-product basis)	$	20,720		$	680		$	14,892		$	603	$	39,537		$	677	$	30,997		$	564

Goldex Mine Per Tonne^(iii)(viii)	Three Months Ended June 30, 2018					Three Months Ended June 30, 2017				Six Months Ended June 30, 2018				Six Months Ended June 30, 2017

	(thousands)			($ per tonne)		(thousands)		($ per tonne)		(thousands)		($ per tonne)		(thousands)			($ per tonne)
Tonnes of ore milled (thousands of tonnes)					640				562				1,298					1,146
Production costs	$	20,943		$	33	$	14,706	$	26	$	39,527	$	30	$	31,571		$	28
Production costs (C$)	C$	27,018		C$	42	C$	19,822	C$	35	C$	50,555	C$	39	C$	42,125		C$	37
Inventory and other adjustments (C$)^(v)		(78	)		—		289		1		324		—		(684	)		(1	)

Minesite operating costs (C$)	C$	26,940		C$	42	C$	20,111	C$	36	C$	50,879	C$	39	C$	41,441		C$	36

Meadowbank Mine Per Ounce of Gold Produced⁽ⁱⁱ⁾	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017						Six Months Ended June 30, 2018						Six Months Ended June 30, 2017

	(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)
Gold production (ounces)					59,627						95,289						121,074						180,659
Production costs	$	56,483		$	947		$	54,397		$	571		$	117,973		$	974		$	108,375		$	600
Inventory and other adjustments^(iv)		(826	)		(14	)		92			1			(4,647	)		(38	)		(2,423	)		(14	)

Cash operating costs (co-product basis)	$	55,657		$	933		$	54,489		$	572		$	113,326		$	936		$	105,952		$	586
By-product metal revenues		(826	)		(13	)		(1,258	)		(13	)		(1,800	)		(15	)		(2,365	)		(13	)

Cash operating costs (by-product basis)	$	54,831		$	920		$	53,231		$	559		$	111,526		$	921		$	103,587		$	573

Meadowbank Mine Per Tonne⁽ⁱⁱⁱ⁾	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017				Six Months Ended June 30, 2018						Six Months Ended June 30, 2017

	(thousands)			($ per tonne)			(thousands)		($ per tonne)		(thousands)			($ per tonne)			(thousands)			($ per tonne)
Tonnes of ore milled (thousands of tonnes)					844					996					1,674						1,922
Production costs	$	56,483		$	67		$	54,397	$	55	$	117,973		$	70		$	108,375		$	56
Production costs (C$)	C$	72,479		C$	86		C$	72,521	C$	73	C$	150,140		C$	90		C$	143,935		C$	75
Inventory and other adjustments (C$)^(v)		(770	)		(1	)		247		—		(5,627	)		(4	)		(2,894	)		(2	)

Minesite operating costs (C$)	C$	71,709		C$	85		C$	72,768	C$	73	C$	144,513		C$	86		C$	141,041		C$	73

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

Canadian Malartic Mine⁽ⁱ⁾ Per Ounce of Gold Produced⁽ⁱⁱ⁾	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017						Six Months Ended June 30, 2018						Six Months Ended June 30, 2017

	(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)
Gold production (ounces)					91,863						82,509						175,266						153,891
Production costs	$	50,557		$	550		$	52,752		$	639		$	97,877		$	558		$	85,253		$	554
Inventory and other adjustments^(iv)		626			7			(6,674	)		(81	)		2,214			13			1,889			12

Cash operating costs (co-product basis)	$	51,183		$	557		$	46,078		$	558		$	100,091		$	571		$	87,142		$	566
By-product metal revenues		(1,878	)		(20	)		(1,513	)		(18	)		(3,546	)		(20	)		(2,866	)		(18	)

Cash operating costs (by-product basis)	$	49,305		$	537		$	44,565		$	540		$	96,545		$	551		$	84,276		$	548

Canadian Malartic Mine⁽ⁱ⁾ Per Tonne⁽ⁱⁱⁱ⁾	Three Months Ended June 30, 2018				Three Months Ended June 30, 2017						Six Months Ended June 30, 2018				Six Months Ended June 30, 2017

	(thousands)		($ per tonne)		(thousands)			($ per tonne)			(thousands)		($ per tonne)		(thousands)		($ per tonne)
Tonnes of ore milled (thousands of tonnes)				2,633					2,603					5,143				5,036
Production costs	$	50,557	$	19	$	52,752		$	20		$	97,877	$	19	$	85,253	$	17
Production costs (C$)	C$	64,801	C$	25	C$	70,868		C$	27		C$	125,303	C$	24	C$	113,864	C$	23
Inventory and other adjustments (C$)^(v)		1,036		—		(9,261	)		(3	)		3,078		1		1,871		—

Minesite operating costs (C$)	C$	65,837	C$	25	C$	61,607		C$	24		C$	128,381	C$	25	C$	115,735	C$	23

Kittila Mine Per Ounce of Gold Produced⁽ⁱⁱ⁾	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017						Six Months Ended June 30, 2018						Six Months Ended June 30, 2017

	(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)
Gold production (ounces)					42,049						47,156						90,167						98,777
Production costs	$	38,759		$	922		$	36,420		$	772		$	81,475		$	904		$	72,339		$	732
Inventory and other adjustments^(iv)		1,017			24			1,450			31			793			8			58			1

Cash operating costs (co-product basis)	$	39,776		$	946		$	37,870		$	803		$	82,268		$	912		$	72,397		$	733
By-product metal revenues		(39	)		(1	)		(40	)		(1	)		(110	)		(1	)		(84	)		(1	)

Cash operating costs (by-product basis)	$	39,737		$	945		$	37,830		$	802		$	82,158		$	911		$	72,313		$	732

Kittila Mine Per Tonne⁽ⁱⁱⁱ⁾	Three Months Ended June 30, 2018				Three Months Ended June 30, 2017				Six Months Ended June 30, 2018				Six Months Ended June 30, 2017

	(thousands)		($ per tonne)		(thousands)		($ per tonne)		(thousands)		($ per tonne)		(thousands)			($ per tonne)
Tonnes of ore milled (thousands of tonnes)				423				439				891					862
Production costs	$	38,759	$	92	$	36,420	$	83	$	81,475	$	91	$	72,339		$	84
Production costs (€)	€	32,853	€	78	€	32,748	€	75	€	67,837	€	76	€	65,852		€	76
Inventory and other adjustments (€)^(v)		911		2		1,118		2		429		1		(222	)		—

Minesite operating costs (€)	€	33,764	€	80	€	33,866	€	77	€	68,266	€	77	€	65,630		€	76

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

Pinos Altos Mine Per Ounce of Gold Produced⁽ⁱⁱ⁾	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017						Six Months Ended June 30, 2018						Six Months Ended June 30, 2017

	(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)
Gold production (ounces)					43,646						48,196						85,482						93,556
Production costs	$	34,743		$	796		$	28,660		$	595		$	69,442		$	812		$	52,392		$	560
Inventory and other adjustments^(iv)		680			16			(8	)		(1	)		(2,307	)		(27	)		3,203			34

Cash operating costs (co-product basis)	$	35,423		$	812		$	28,652		$	594		$	67,135		$	785		$	55,595		$	594
By-product metal revenues		(8,885	)		(204	)		(10,663	)		(221	)		(18,050	)		(211	)		(21,358	)		(228	)

Cash operating costs (by-product basis)	$	26,538		$	608		$	17,989		$	373		$	49,085		$	574		$	34,237		$	366

Pinos Altos Mine Per Tonne⁽ⁱⁱⁱ⁾	Three Months Ended June 30, 2018				Three Months Ended June 30, 2017					Six Months Ended June 30, 2018						Six Months Ended June 30, 2017

	(thousands)		($ per tonne)		(thousands)			($ per tonne)		(thousands)			($ per tonne)			(thousands)		($ per tonne)
Tonnes of ore processed (thousands of tonnes)				603					620					1,122					1,173
Production costs	$	34,743	$	58	$	28,660		$	46	$	69,442		$	62		$	52,392	$	45
Inventory and other adjustments^(v)		503		—		(70	)		—		(2,471	)		(2	)		2,771		2

Minesite operating costs	$	35,246	$	58	$	28,590		$	46	$	66,971		$	60		$	55,163	$	47

Creston Mascota Mine Per Ounce of Gold Produced⁽ⁱⁱ⁾	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017						Six Months Ended June 30, 2018						Six Months Ended June 30, 2017

	(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)
Gold production (ounces)					8,716						12,074						20,704						23,318
Production costs	$	10,226		$	1,173		$	7,361		$	610		$	19,877		$	960		$	14,339		$	615
Inventory and other adjustments^(iv)		(434	)		(50	)		466			38			283			14			435			19

Cash operating costs (co-product basis)	$	9,792		$	1,123		$	7,827		$	648		$	20,160		$	974		$	14,774		$	634
By-product metal revenues		(1,271	)		(145	)		(1,186	)		(98	)		(2,797	)		(135	)		(2,230	)		(96	)

Cash operating costs (by-product basis)	$	8,521		$	978		$	6,641		$	550		$	17,363		$	839		$	12,544		$	538

Creston Mascota Mine Per Tonne⁽ⁱⁱⁱ⁾	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017				Six Months Ended June 30, 2018				Six Months Ended June 30, 2017

	(thousands)			($ per tonne)			(thousands)		($ per tonne)		(thousands)		($ per tonne)		(thousands)		($ per tonne)
Tonnes of ore processed (thousands of tonnes)					255					596				730				1,120
Production costs	$	10,226		$	40		$	7,361	$	12	$	19,877	$	27	$	14,339	$	13
Inventory and other adjustments^(v)		(519	)		(2	)		378		1		110		—		283		—

Minesite operating costs	$	9,707		$	38		$	7,739	$	13	$	19,987	$	27	$	14,622	$	13

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

La India Mine Per Ounce of Gold Produced⁽ⁱⁱ⁾	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017						Six Months Ended June 30, 2018						Six Months Ended June 30, 2017

	(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)			(thousands)			($ per ounce)
Gold production (ounces)					24,920						24,211						47,975						50,507
Production costs	$	17,798		$	714		$	14,942		$	617		$	33,200		$	692		$	28,056		$	555
Inventory and other adjustments^(iv)		39			2			(313	)		(13	)		781			16			373			8

Cash operating costs (co-product basis)	$	17,837		$	716		$	14,629		$	604		$	33,981		$	708		$	28,429		$	563
By-product metal revenues		(622	)		(25	)		(1,268	)		(52	)		(1,376	)		(28	)		(3,547	)		(70	)

Cash operating costs (by-product basis)	$	17,215		$	691		$	13,361		$	552		$	32,605		$	680		$	24,882		$	493

La India Mine Per Tonne⁽ⁱⁱⁱ⁾	Three Months Ended June 30, 2018					Three Months Ended June 30, 2017					Six Months Ended June 30, 2018				Six Months Ended June 30, 2017

	(thousands)			($ per tonne)		(thousands)			($ per tonne)		(thousands)		($ per tonne)		(thousands)			($ per tonne)
Tonnes of ore processed (thousands of tonnes)					1,556					1,329				3,251					2,731
Production costs	$	17,798		$	11	$	14,942		$	11	$	33,200	$	10	$	28,056		$	10
Inventory and other adjustments^(v)		(147	)		—		(687	)		—		313		—		(318	)		—

Minesite operating costs	$	17,651		$	11	$	14,255		$	11	$	33,513	$	10	$	27,738		$	10

Notes:

(i): The information set out in this table reflects the Company's 50% interest in the Canadian Malartic mine.
(ii): Total cash costs per ounce of gold produced is not a recognized measure under IFRS and this data may not be comparable to data reported by other gold producers. Total cash costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (without deducting by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the condensed interim consolidated statements of income for by-product metal revenues, inventory production costs, smelting, refining and marketing charges, other adjustments, and then dividing by the number of ounces of gold produced. Total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as total cash costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made. Accordingly, the calculation of total cash costs per ounce of gold produced on a co-product basis does not reflect a reduction in production costs or smelting, refining and marketing charges associated with the production and sale of by-product metals. The Company believes that these generally accepted industry measures provide a realistic indication of operating performance and provide useful comparison points between periods. Total cash costs per ounce of gold produced is intended to provide information about the cash generating capabilities of the Company's mining operations. Management also uses these measures to monitor the performance of the Company's mining operations. As market prices for gold are quoted on a per ounce basis, using the total cash costs per ounce of gold produced on a by-product basis measure allows management to assess a mine's cash generating capabilities at various gold prices. Management is aware that these per ounce measures of performance can be affected by fluctuations in exchange rates and, in the case of total cash costs of gold produced on a by-product basis, by-product metal prices. Management compensates for these inherent limitations by using these measures in conjunction with minesite costs per tonne as well as other data prepared in accordance with IFRS. Management also performs sensitivity analysis in order to quantify the effects of fluctuating metal prices and exchange rates.
(iii): Minesite costs per tonne is not a recognized measure under IFRS and this data may not be comparable to data reported by other gold producers. This measure is calculated by adjusting production costs as shown in the condensed interim consolidated statements of income for inventory production costs and other adjustments, and then dividing by tonnes of ore milled. As the total cash costs per ounce of gold produced measure can be affected by fluctuations in by-product metal prices and exchange rates, management believes that the minesite costs per tonne measure provides additional information regarding the performance of mining operations, eliminating the impact of varying production levels. Management also uses this measure to determine the economic viability of mining blocks. As each mining block is evaluated based on the net realizable value of each tonne mined, in order to be economically viable the estimated revenue on a per tonne basis must be in excess of the minesite costs per tonne. Management is aware that this per tonne measure of performance can be impacted by fluctuations in processing levels and compensates for this inherent limitation by using this measure in conjunction with production costs prepared in accordance with IFRS.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

(iv): Under the Company's revenue recognition policy, revenue from contracts with customers is recognized upon the transfer of control over metals sold to the customer. As total cash costs per ounce of gold produced are calculated on a production basis, an inventory adjustment is made to reflect the portion of production not yet recognized as revenue. Other adjustments include the addition of smelting, refining and marketing charges to production costs.
(v): This inventory and other adjustment reflects production costs associated with the portion of production still in inventory and smelting, refining and marketing charges associated with production.
(vi): The LaRonde Zone 5 mine achieved commercial production on June 1, 2018. Therefore, no comparative operating results are presented for the three and six months ended June 30, 2017.
(vii): The Goldex mine's data presented on a per ounce of gold produced basis for the three and six months ended June 30, 2017 excludes 5,646 and 8,041 ounces of payable gold production and the associated costs related to the Deep 1 Zone which were produced prior to the achievement of commercial production.
(viii): The Goldex mine's data presented on a per tonne basis for the three and six months ended June 30, 2017 excludes 117,784 and 175,514 tonnes processed and the associated costs related to the Deep 1 Zone which were processed prior to the achievement of commercial production.

All-in Sustaining Costs per Ounce of Gold Produced

All-in sustaining costs per ounce of gold produced is not a recognized measure under IFRS and this data may not be comparable to data reported by other gold producers. The Company believes that this measure provides information about operating performance. However, this non-GAAP measure should be considered together with other data prepared in accordance with IFRS as it is not necessarily indicative of operating costs or cash flow measures prepared in accordance with IFRS.

All-in sustaining costs per ounce of gold produced is reported on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (without deducting by-product metal revenues). All-in sustaining costs per ounce of gold produced on a by-product basis is calculated as the aggregate of total cash costs per ounce of gold produced on a by-product basis and sustaining capital expenditures (including capitalized exploration), general and administrative expenses (including stock options) and non-cash reclamation provision expense per ounce of gold produced. All-in sustaining costs per ounce of gold produced on a co-product basis is calculated in the same manner as all-in sustaining costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made to total cash costs per ounce of gold produced. The calculation of all-in sustaining costs per ounce of gold produced on a co-product basis does not reflect a reduction in production costs or smelting, refining and marketing charges associated with the production and sale of by-product metals.

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

The following table sets out a reconciliation of production costs to all-in sustaining costs per ounce of gold produced for the three and six months ended June 30, 2018 and June 30, 2017 on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (without deducting by-product metal revenues).

Reconciliation of Production Costs to All-in Sustaining Costs per Ounce of Gold Produced

(United States dollars per ounce of gold produced, except where noted)	Three Months Ended June 30, 2018			Three Months Ended June 30, 2017			Six Months Ended June 30, 2018			Six Months Ended June 30, 2017

Production costs per the condensed interim consolidated statements of income (thousands of United States dollars)	$	303,695		$	267,641		$	599,021		$	507,980

Adjusted gold production (ounces)⁽ⁱ⁾		404,961			422,097			794,239			837,918

Production costs per ounce of adjusted gold production⁽ⁱ⁾	$	750		$	634		$	754		$	606
Adjustments:
Inventory and other adjustments⁽ⁱⁱ⁾		(14	)		(6	)		(19	)		16

Total cash costs per ounce of gold produced (co-product basis)⁽ⁱⁱⁱ⁾	$	736		$	628		$	735		$	622
By-product metal revenues		(80	)		(72	)		(83	)		(74	)

Total cash costs per ounce of gold produced (by-product basis)⁽ⁱⁱⁱ⁾	$	656		$	556		$	652		$	548

Adjustments:
Sustaining capital expenditures (including capitalized exploration)		183			160			167			143
General and administrative expenses (including stock options)		76			66			81			70
Non-cash reclamation provision and other		6			3			6			3

All-in sustaining costs per ounce of gold produced (by-product basis)	$	921		$	785		$	906		$	764

By-product metal revenues		80			72			83			74

All-in sustaining costs per ounce of gold produced (co-product basis)	$	1,001		$	857		$	989		$	838

Notes:

(i): Adjusted gold production for the three and six months ended June 30, 2017 excludes 5,646 and 8,041 ounces of payable gold production at the Goldex mine's Deep 1 Zone which were produced prior to the achievement of commercial production.
(ii): Under the Company's revenue recognition policy, revenue from contracts with customers is recognized upon transfer of control over metals sold to the customer. As total cash costs per ounce of gold produced are calculated on a production basis, an inventory adjustment is made to reflect the portion of production not yet recognized as revenue. Other adjustments include the addition of smelting, refining and marketing charges to production costs.
(iii): Total cash costs per ounce of gold produced is not a recognized measure under IFRS and this data may not be comparable to data reported by other gold producers. Total cash costs per ounce of gold produced is presented on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (without deducting by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the condensed interim consolidated statements of income for by-product metal revenues, inventory production costs, smelting, refining and marketing charges, other adjustments, and then dividing by the number of ounces of gold produced. Total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as total cash costs per ounce of gold produced on a by-product basis except that

AGNICO EAGLE MINES LIMITED
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Prepared in accordance with International Financial Reporting Standards)
For the Three and Six Months Ended June 30, 2018

no adjustment for by-product metal revenues is made. Accordingly, the calculation of total cash costs per ounce of gold produced on a co-product basis does not reflect a reduction in production costs or smelting, refining and marketing charges associated with the production and sale of by-product metals. The Company believes that these generally accepted industry measures provide a realistic indication of operating performance and provide useful comparison points between periods. Total cash costs per ounce of gold produced is intended to provide information about the cash generating capabilities of the Company's mining operations. Management also uses these measures to monitor the performance of the Company's mining operations. As market prices for gold are quoted on a per ounce basis, using the total cash costs per ounce of gold produced on a by-product basis measure allows management to assess a mine's cash generating capabilities at various gold prices. Management is aware that these per ounce measures of performance can be affected by fluctuations in exchange rates and, in the case of total cash costs of gold produced on a by-product basis, by-product metal prices. Management compensates for these inherent limitations by using these measures in conjunction with minesite costs per tonne as well as other data prepared in accordance with IFRS. Management also performs sensitivity analysis in order to quantify the effects of fluctuating metal prices and exchange rates.

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

	Three Months Ended June 30,						Six Months Ended June 30,

	2018			2017⁽ⁱ⁾			2018			2017⁽ⁱ⁾
Operating margin⁽ⁱⁱ⁾ by mine:
Northern Business
LaRonde mine	$	74,517		$	54,062		$	164,277		$	124,764
LaRonde Zone 5 mine		334			—			334			—
Lapa mine		6,303			8,189			6,592			14,394
Goldex mine		18,686			15,990			36,738			36,844
Meadowbank mine		21,001			62,668			51,194			120,141
Canadian Malartic mine⁽ⁱⁱⁱ⁾		67,680			51,237			129,941			102,823
Kittila mine		15,312			21,741			38,621			51,582
Southern Business
Pinos Altos mine		29,620			41,138			66,839			83,171
Creston Mascota mine		3,313			8,114			10,949			16,171
La India mine		15,821			19,103			30,211			39,472

Total operating margin⁽ⁱⁱ⁾		252,587			282,242			535,696			589,362
Amortization of property, plant and mine development		138,469			128,440			272,839			260,949
Exploration, corporate and other		73,710			90,122			153,096			162,086

Income before income and mining taxes		40,408			63,680			109,761			166,327
Income and mining taxes expense		35,436			8,804			59,859			35,501

Net income for the period	$	4,972		$	54,876		$	49,902		$	130,826

Net income per share — basic (US$)	$	0.02		$	0.24		$	0.21		$	0.57
Net income per share — diluted (US$)	$	0.02		$	0.23		$	0.21		$	0.57
Cash flows:
Cash provided by operating activities	$	120,087		$	183,950		$	327,793		$	406,561
Cash used in investing activities	$	(201,405	)	$	(203,444	)	$	(556,122	)	$	(357,131	)
Cash provided by financing activities	$	340,498		$	169,836		$	306,150		$	351,407
Realized prices (US$):
Gold (per ounce)	$	1,293		$	1,260		$	1,313		$	1,241
Silver (per ounce)	$	16.43		$	17.03		$	16.61		$	17.33
Zinc (per tonne)	$	3,144		$	2,642		$	3,280		$	2,721
Copper (per tonne)	$	6,760		$	5,660		$	7,014		$	6,018

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

	Three Months Ended June 30,				Six Months Ended June 30,

	2018		2017		2018		2017
Payable production^(iv):
Gold (ounces):
Northern Business
LaRonde mine		84,526		72,090		174,311		151,002
LaRonde Zone 5 mine		4,601		—		4,601		—
Lapa mine		14,533		15,881		16,255		31,241
Goldex mine		30,480		30,337		58,404		63,008
Meadowbank mine		59,627		95,289		121,074		180,659
Canadian Malartic mine⁽ⁱⁱⁱ⁾		91,863		82,509		175,266		153,891
Kittila mine		42,049		47,156		90,167		98,777
Southern Business
Pinos Altos mine		43,646		48,196		85,482		93,556
Creston Mascota mine		8,716		12,074		20,704		23,318
La India mine		24,920		24,211		47,975		50,507

Total gold (ounces)		404,961		427,743		794,239		845,959

Silver (thousands of ounces):
Northern Business
LaRonde mine		234		337		601		609
Lapa mine		1		1		1		2
Goldex mine		1		1		1		1
Meadowbank mine		48		65		108		136
Canadian Malartic mine⁽ⁱⁱⁱ⁾		117		89		223		173
Kittila mine		3		3		6		6
Southern Business
Pinos Altos mine		538		645		1,079		1,228
Creston Mascota mine		77		70		168		126
La India mine		37		74		82		202

Total silver (thousands of ounces)		1,056		1,285		2,269		2,483

Zinc (tonnes)		2,778		1,724		3,824		2,729
Copper (tonnes)		961		907		2,253		2,179

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

	Three Months Ended June 30,				Six Months Ended June 30,

	2018		2017		2018		2017
Payable metal sold:
Gold (ounces):
Northern Business
LaRonde mine		94,868		72,706		196,693		158,162
LaRonde Zone 5 mine		683		—		683		—
Lapa mine		13,286		15,870		13,899		31,277
Goldex mine		30,531		30,165		57,989		63,377
Meadowbank mine		59,126		92,038		127,251		182,593
Canadian Malartic mine^(iii)(v)		84,920		77,380		161,965		141,240
Kittila mine		41,758		46,210		91,538		100,110
Southern Business
Pinos Altos mine		43,653		47,839		90,013		92,972
Creston Mascota mine		9,499		11,414		21,388		23,040
La India mine		25,362		26,251		47,392		51,931

Total gold (ounces)		403,686		419,873		808,811		844,702

Silver (thousands of ounces):
Northern Business
LaRonde mine		249		319		611		607
Lapa mine		1		6		1		6
Goldex mine		1		1		1		1
Meadowbank mine		51		73		109		136
Canadian Malartic mine^(iii)(v)		107		75		194		154
Kittila mine		2		3		6		5
Southern Business
Pinos Altos mine		528		586		1,139		1,192
Creston Mascota mine		81		70		167		120
La India mine		41		86		88		215

Total silver (thousands of ounces):		1,061		1,219		2,316		2,436

Zinc (tonnes)		2,979		1,645		5,509		3,781
Copper (tonnes)		945		885		2,233		2,114

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

	Three Months Ended June 30,				Six Months Ended June 30,

	2018		2017		2018		2017
Total cash costs per ounce of gold produced — co-product basis (US$)^(vi):
Northern Business
LaRonde mine	$	622	$	686	$	631	$	673
LaRonde Zone 5 mine		796		—		796		—
Lapa mine		795		717		823		785
Goldex mine^(vii)		680		603		677		564
Meadowbank mine		933		572		936		586
Canadian Malartic mine⁽ⁱⁱⁱ⁾		557		558		571		566
Kittila mine		946		803		912		733
Southern Business
Pinos Altos mine		812		594		785		594
Creston Mascota mine		1,123		648		974		634
La India mine		716		604		708		563

Weighted average total cash costs per ounce of gold produced	$	736	$	628	$	735	$	622

Total cash costs per ounce of gold produced — by-product basis (US$)^(vi):
Northern Business
LaRonde mine	$	395	$	482	$	412	$	473
LaRonde Zone 5 mine		796		—		796		—
Lapa mine		795		712		823		781
Goldex mine^(vii)		680		603		677		564
Meadowbank mine		920		559		921		573
Canadian Malartic mine⁽ⁱⁱⁱ⁾		537		540		551		548
Kittila mine		945		802		911		732
Southern Business
Pinos Altos mine		608		373		574		366
Creston Mascota mine		978		550		839		538
La India mine		691		552		680		493

Weighted average total cash costs per ounce of gold produced	$	656	$	556	$	652	$	548

Notes:

(i): The Company has adopted IFRS 9 effective January 1, 2018 on a retrospective basis and the comparative amounts have been adjusted accordingly. For more information please see Note 3 in the Company's condensed interim consolidated financial statements.
(ii): Operating margin is calculated as revenues from mining operations less production costs.
(iii): The information set out in this table reflects the Company's 50% interest in the Canadian Malartic mine.
(iv): Payable production (a non-GAAP non-financial performance measure) is the quantity of mineral produced during a period contained in products that have been or will be sold by the Company, whether such products are sold during the period or held as inventories at the end of the period.
(v): The Canadian Malartic mine's payable metal sold excludes the 5.0% net smelter royalty in favour of Osisko Gold Royalties Ltd.
(vi): Total cash costs per ounce of gold produced is not a recognized measure under IFRS and this data may not be comparable to data reported by other gold producers. Total cash costs per ounce of gold produced is presented on both a by-product basis (deducting

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

by-product metal revenues from production costs) and co-product basis (without deducting by-product metal revenues). Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the condensed interim consolidated statements of income for by-product metal revenues, inventory production costs, smelting, refining and marketing charges, other adjustments, and then dividing by the number of ounces of gold produced. Total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as total cash costs per ounce of gold produced on a by-product basis except that no adjustment for by-product metal revenues is made. Accordingly, the calculation of total cash costs per ounce of gold produced on a co-product basis does not reflect a reduction in production costs or smelting, refining and marketing charges associated with the production and sale of by-product metals. The Company believes that these generally accepted industry measures provide a realistic indication of operating performance and provide useful comparison points between periods. Total cash costs per ounce of gold produced is intended to provide information about the cash generating capabilities of the Company's mining operations. Management also uses these measures to monitor the performance of the Company's mining operations. As market prices for gold are quoted on a per ounce basis, using the total cash costs per ounce of gold produced on a by-product basis measure allows management to assess a mine's cash generating capabilities at various gold prices. Management is aware that these per ounce measures of performance can be affected by fluctuations in exchange rates and, in the case of total cash costs of gold produced on a by-product basis, by-product metal prices. Management compensates for these inherent limitations by using these measures in conjunction with minesite costs per tonne as well as other data prepared in accordance with IFRS. Management also performs sensitivity analysis in order to quantify the effects of fluctuating metal prices and exchange rates.

(vii): The Goldex mine's data presented on a per ounce of gold produced basis for the three and six months ended June 30, 2017 excludes 5,646 and 8,041 ounces of payable gold production and the associated costs related to the Deep 1 Zone which were produced prior to the achievement of commercial production.

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

	Three Months Ended

	September 30, 2016			December 31, 2016			March 31, 2017			June 30, 2017⁽ⁱ⁾			September 30, 2017			December 31, 2017			March 31, 2018			June 30, 2018
Operating margin⁽ⁱⁱ⁾:
Revenues from mining operations	$	610,863		$	499,210		$	547,459		$	549,883		$	580,008		$	565,254		$	578,435		$	556,282
Production costs		277,371			255,112			240,339			267,641			262,173			287,689			295,326			303,695

Total operating margin⁽ⁱⁱ⁾		333,492			244,098			307,120			282,242			317,835			277,565			283,109			252,587
Operating margin⁽ⁱⁱ⁾ by mine:
Northern Business
LaRonde mine		61,587			44,058			70,702			54,062			100,550			73,686			89,760			74,517
LaRonde Zone 5 mine		—			—			—			—			—			—			—			334
Lapa mine		10,181			3,762			6,205			8,189			9,825			1,567			289			6,303
Goldex mine		27,834			13,506			20,854			15,990			18,274			13,532			18,052			18,686
Meadowbank mine		46,190			50,807			57,473			62,668			55,324			49,196			30,193			21,001
Canadian Malartic mine⁽ⁱⁱⁱ⁾		55,981			40,430			51,586			51,237			56,702			56,348			62,261			67,680
Kittila mine		36,714			27,596			29,841			21,741			25,662			23,245			23,309			15,312
Southern Business
Pinos Altos mine		60,699			34,909			42,033			41,138			29,445			36,563			37,219			29,620
Creston Mascota mine		10,448			6,470			8,057			8,114			6,993			9,144			7,636			3,313
La India mine		23,858			22,560			20,369			19,103			15,060			14,284			14,390			15,821

Total operating margin⁽ⁱⁱ⁾		333,492			244,098			307,120			282,242			317,835			277,565			283,109			252,587
Impairment reversal		—			(120,161	)		—			—			—			—			—			—
Amortization of property, plant and mine development		161,472			151,399			132,509			128,440			118,312			129,478			134,370			138,469
Exploration, corporate and other		84,079			97,447			71,964			90,122			94,521			85,113			79,386			73,710

Income before income and mining taxes		87,941			115,413			102,647			63,680			105,002			62,974			69,353			40,408
Income and mining taxes expense		38,549			52,759			26,697			8,804			34,047			27,876			24,423			35,436

Net income for the period	$	49,392		$	62,654		$	75,950		$	54,876		$	70,955		$	35,098		$	44,930		$	4,972

Net income per share — basic (US$)	$	0.22		$	0.28		$	0.33		$	0.24		$	0.31		$	0.15		$	0.19		$	0.02
Net income per share — diluted (US$)	$	0.22		$	0.28		$	0.33		$	0.23		$	0.30		$	0.15		$	0.19		$	0.02
Cash flows:
Cash provided by operating activities	$	282,856		$	120,601		$	222,611		$	183,950		$	194,066		$	166,930		$	207,706		$	120,087
Cash used in investing activities	$	(142,701	)	$	(180,543	)	$	(153,687	)	$	(203,444	)	$	(265,617	)	$	(377,304	)	$	(354,717	)	$	(201,405	)
Cash (used in) provided by financing activities	$	11,840		$	(19,360	)	$	181,571		$	169,836		$	(12,139	)	$	(10,101	)	$	(34,348	)	$	340,498

Notes:

(i): The Company has adopted IFRS 9 effective January 1, 2018 on a retrospective basis and the comparative amounts have been adjusted accordingly. For more information please see Note 3 in the Company's condensed interim consolidated financial statements.
(ii): Operating margin is calculated as revenues from mining operations less production costs.
(iii): The information set out in this table reflects the Company's 50% interest in the Canadian Malartic mine.

AGNICO EAGLE MINES LIMITED
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(thousands of United States dollars, except share amounts)
(Unaudited)

	As at June 30, 2018			As at December 31, 2017

ASSETS
Current assets:
Cash and cash equivalents	$	708,270		$	632,978
Short-term investments		12,936			10,919
Restricted cash		408			422
Trade receivables (note 6)		13,479			12,000
Inventories (note 7)		440,047			500,976
Income taxes recoverable		30,900			13,598
Equity securities (notes 6 and 8)		73,221			122,775
Fair value of derivative financial instruments (notes 6 and 15)		5,558			17,240
Other current assets		200,898			150,626

Total current assets		1,485,717			1,461,534
Non-current assets:
Restricted cash		—			801
Goodwill		696,809			696,809
Property, plant and mine development (note 9)		5,990,183			5,626,552
Other assets		105,978			79,905

Total assets	$	8,278,687		$	7,865,601

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	324,396		$	290,722
Reclamation provision		4,728			10,038
Interest payable		16,350			12,894
Income taxes payable		16,716			16,755
Finance lease obligations		2,094			3,412
Fair value of derivative financial instruments (notes 6 and 15)		5,508			—

Total current liabilities		369,792			333,821

Non-current liabilities:
Long-term debt (note 10)		1,720,873			1,371,851
Reclamation provision		374,756			345,268
Deferred income and mining tax liabilities		833,709			827,341
Other liabilities		47,399			40,329

Total liabilities		3,346,529			2,918,610

EQUITY
Common shares (note 11):
Outstanding — 234,085,916 common shares issued, less 824,497 shares held in trust		5,322,229			5,288,432
Stock options (notes 11 and 12)		192,410			186,754
Contributed surplus		37,254			37,254
Deficit		(561,025	)		(595,797	)
Other reserves (note 13)		(58,710	)		30,348

Total equity		4,932,158			4,946,991

Total liabilities and equity	$	8,278,687		$	7,865,601

Commitments and contingencies (note 18)

See accompanying notes

AGNICO EAGLE MINES LIMITED
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME
(thousands of United States dollars, except per share amounts)
(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,

	2018			2017 Restated (note 3)			2018			2017 Restated (note 3)
REVENUES
Revenues from mining operations (note 14)	$	556,282		$	549,883		$	1,134,717		$	1,097,342
COSTS, EXPENSES AND OTHER INCOME
Production⁽ⁱ⁾		303,695			267,641			599,021			507,980
Exploration and corporate development		38,936			34,323			69,159			59,636
Amortization of property, plant and mine development		138,469			128,440			272,839			260,949
General and administrative		30,647			27,754			64,108			58,508
Impairment loss on equity securities		—			5,814			—			5,814
Finance costs		25,293			17,835			47,109			37,541
Loss (gain) on derivative financial instruments (note 15)		4,440			(2,577	)		3,134			(6,377	)
Environmental remediation		26			(190	)		233			138
Foreign currency translation loss		3,875			2,647			390			3,499
Other (income) expenses (note 16)		(29,507	)		4,516			(31,037	)		3,327

Income before income and mining taxes		40,408			63,680			109,761			166,327
Income and mining taxes expense		35,436			8,804			59,859			35,501

Net income for the period	$	4,972		$	54,876		$	49,902		$	130,826

Net income per share — basic (note 11)	$	0.02		$	0.24		$	0.21		$	0.57

Net income per share — diluted (note 11)	$	0.02		$	0.23		$	0.21		$	0.57

Cash dividends declared per common share	$	0.11		$	0.10		$	0.22		$	0.20

Note:

(i): Exclusive of amortization, which is shown separately.

See accompanying notes

AGNICO EAGLE MINES LIMITED
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(thousands of United States dollars)
(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,

	2018			2017 Restated (note 3)			2018			2017 Restated (note 3)
Net income for the period	$	4,972		$	54,876		$	49,902		$	130,826
Other comprehensive income (loss):
Items that may be subsequently reclassified to net income:
Equity securities (note 8):
Unrealized change in fair value of equity securities		—			(11,811	)		—			(465	)
Reclassification to impairment loss on equity securities		—			5,814			—			5,814
Reclassification to gain on sale of equity securities		—			(3	)		—			(79	)
Derivative financial instruments (note 15):
Unrealized change in fair value of cash flow hedges		(1,501	)		2,311			(7,207	)		2,311
Unrealized change in fair value of cost of hedging		(1,332	)		8,078			(1,825	)		8,078
Income tax impact of reclassification items		—			(776	)		—			(766	)
Income tax impact of other comprehensive income (loss) items		—			197			—			(1,315	)

		(2,833	)		3,810			(9,032	)		13,578

Items that will not be subsequently reclassified to net income:
Pension benefit obligations:
Remeasurement losses of pension benefit obligations		(345	)		(77	)		(698	)		(152	)
Income tax impact		130			20			263			39
Equity securities (note 8):
Net change in fair value of equity securities at FVOCI		(14,186	)		—			(40,328	)		—

		(14,401	)		(57	)		(40,763	)		(113	)

Other comprehensive income (loss) for the period		(17,234	)		3,753			(49,795	)		13,465

Comprehensive income (loss) for the period	$	(12,262	)	$	58,629		$	107		$	144,291

See accompanying notes

AGNICO EAGLE MINES LIMITED
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF EQUITY
(thousands of United States dollars, except share and per share amounts)
(Unaudited)

	Common Shares Outstanding

	Common Shares Outstanding						Stock Options			Contributed Surplus					Other Reserves			Total Equity
	Shares			Amount			Stock Options			Contributed Surplus		Deficit			Other Reserves			Total Equity
Balance at December 31, 2016		224,965,140		$	4,987,694		$	179,852		$	37,254	$	(744,453	)	$	32,127		$	4,492,474

Net income (Restated — note 3)		—			—			—			—		130,826			—			130,826
Other comprehensive income (loss) (Restated — note 3)		—			—			—			—		(113	)		13,578			13,465

Total comprehensive income (Restated — note 3)		—			—			—			—		130,713			13,578			144,291

Transactions with owners:
Shares issued under employee stock option plan (notes 11 and 12(a))		1,159,961			39,851			(8,968	)		—		—			—			30,883
Stock options (notes 11 and 12(a))		—			—			11,535			—		—			—			11,535
Shares issued under incentive share purchase plan (note 12(b))		189,545			8,531			—			—		—			—			8,531
Shares issued under dividend reinvestment plan		162,206			7,151			—			—		—			—			7,151
Equity issuance (net of transaction costs)		5,003,412			215,013			—			—		—			—			215,013
Dividends declared ($0.20 per share)		—			—			—			—		(45,362	)		—			(45,362	)
Restricted Share Unit plan, Performance Share Unit plan and Long Term Incentive Plan (note 12(c,d))		(254,580	)		(14,090	)		—			—		—			—			(14,090	)

Restated Balance at June 30, 2017		231,225,684		$	5,244,150		$	182,419		$	37,254	$	(659,102	)	$	45,705		$	4,850,426

Balance at December 31, 2017		232,250,441		$	5,288,432		$	186,754		$	37,254	$	(595,797	)	$	30,348		$	4,946,991

Impact of adopting IFRS 9 on January 1, 2018, (net of tax) (note 3)		—			—			—			—		36,293			(36,293	)		—

Adjusted balance at January 1, 2018		232,250,441		$	5,288,432		$	186,754		$	37,254	$	(559,504	)	$	(5,945	)	$	4,946,991

Net income		—			—			—			—		49,902			—			49,902
Other comprehensive loss		—			—			—			—		(435	)		(49,360	)		(49,795	)

Total comprehensive income (loss)		—			—			—			—		49,467			(49,360	)		107

Hedging gains and costs of hedging transferred to property, plant and mine development		—			—			—			—		—			(3,405	)		(3,405	)

Transactions with owners:
Shares issued under employee stock option plan (notes 11 and 12(a))		832,599			27,951			(6,267	)		—		—			—			21,684
Stock options (notes 11 and 12(a))		—			—			11,923			—		—			—			11,923
Shares issued under incentive share purchase plan (note 12(b))		238,447			10,325			—			—		—			—			10,325
Shares issued under dividend reinvestment plan		221,535			8,934			—			—		—			—			8,934
Dividends declared ($0.22 per share)		—			—			—			—		(50,988	)		—			(50,988	)
Restricted Share Unit plan, Performance Share Unit plan, and Long Term Incentive Plan (note 12(c,d))		(281,603	)		(13,413	)		—			—		—			—			(13,413	)

Balance at June 30, 2018		233,261,419		$	5,322,229		$	192,410		$	37,254	$	(561,025	)	$	(58,710	)	$	4,932,158

See accompanying notes

AGNICO EAGLE MINES LIMITED
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of United States dollars)
(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,

	2018			2017 Restated (note 3)			2018			2017 Restated (note 3)
OPERATING ACTIVITIES
Net income for the period	$	4,972		$	54,876		$	49,902		$	130,826
Add (deduct) items not affecting cash:
Amortization of property, plant and mine development		138,469			128,440			272,839			260,949
Deferred income and mining taxes		17,888			(9,741	)		6,266			(9,210	)
Stock-based compensation (note 12)		12,133			9,530			27,457			24,920
Impairment loss on equity securities		—			5,814			—			5,814
Foreign currency translation loss		3,875			2,647			390			3,499
Other		(17,153	)		7,661			(15,501	)		7,474
Adjustment for settlement of reclamation provision		(661	)		(1,989	)		(1,294	)		(2,295	)
Changes in non-cash working capital balances:
Trade receivables		255			1,218			(1,479	)		(210	)
Income taxes		(15,010	)		(14,807	)		(17,341	)		(18,610	)
Inventories		12,768			(16,725	)		37,318			(8,789	)
Other current assets		(57,593	)		(20,676	)		(52,840	)		(15,457	)
Accounts payable and accrued liabilities		30,258			52,533			19,819			31,374
Interest payable		(10,114	)		(14,831	)		2,257			(3,724	)

Cash provided by operating activities		120,087			183,950			327,793			406,561

INVESTING ACTIVITIES
Additions to property, plant and mine development (note 9)		(250,221	)		(192,272	)		(436,315	)		(320,911	)
Acquisition (note 5)		—			—			(162,479	)		—
Net proceeds from sale of property, plant and mine development (note 9)		35,083			—			35,083			—
Net (purchases) sales of short-term investments		(365	)		2,726			(2,017	)		5
Net proceeds from sale of equity securities (note 8)		16,305			6			16,305			197
Purchases of equity securities and other investments (note 8)		(3,000	)		(13,888	)		(7,514	)		(36,425	)
Decrease (increase) in restricted cash		793			(16	)		815			3

Cash used in investing activities		(201,405	)		(203,444	)		(556,122	)		(357,131	)

FINANCING ACTIVITIES
Dividends paid		(19,418	)		(18,769	)		(42,067	)		(38,227	)
Repayment of finance lease obligations		(825	)		(1,466	)		(1,745	)		(3,148	)
Proceeds from long-term debt (note 10)		—			280,000			250,000			280,000
Repayment of long-term debt (note 10)		—			(410,412	)		(250,000	)		(410,412	)
Notes issuance (note 10)		350,000			300,000			350,000			300,000
Long-term debt financing costs		(2,181	)		(2,129	)		(2,285	)		(2,129	)
Repurchase of common shares for stock-based compensation plans (note 12)		(76	)		(302	)		(26,332	)		(24,540	)
Proceeds on exercise of stock options (note 12 (a))		9,499			19,969			21,683			30,882
Common shares issued		3,499			2,945			6,896			218,981

Cash provided by financing activities		340,498			169,836			306,150			351,407

Effect of exchange rate changes on cash and cash equivalents		(3,168	)		407			(2,529	)		3,125

Net increase in cash and cash equivalents during the period		256,012			150,749			75,292			403,962
Cash and cash equivalents, beginning of period		452,258			793,187			632,978			539,974

Cash and cash equivalents, end of period	$	708,270		$	943,936		$	708,270		$	943,936

SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid	$	34,508		$	31,433		$	41,675		$	38,300

Income and mining taxes paid	$	34,084		$	38,792		$	71,922		$	69,155

See accompanying notes

AGNICO EAGLE MINES LIMITED
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2018

1. CORPORATE INFORMATION

Agnico Eagle Mines Limited ("Agnico Eagle" or the "Company") is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development. The Company's mining operations are located in Canada, Mexico and Finland and the Company has exploration activities in Canada, Europe, Latin America and the United States. Agnico Eagle is a public company incorporated under the laws of the Province of Ontario, Canada with its head and registered office located at 145 King Street East, Suite 400, Toronto, Ontario, M5C 2Y7. The Company's common shares are listed on the Toronto Stock Exchange and the New York Stock Exchange. Agnico Eagle sells its gold production into the world market.

These condensed interim consolidated financial statements were authorized for issuance by the Board of Directors of the Company (the "Board") on July 26, 2018.

2. BASIS OF PRESENTATION

A.: Statement of Compliance

The accompanying condensed interim consolidated financial statements of Agnico Eagle have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB") in United States ("US") dollars. These condensed interim consolidated financial statements do not include all of the disclosures required by International Financial Reporting Standards ("IFRS") for annual audited consolidated financial statements.

These condensed interim consolidated financial statements were prepared on a going concern basis under the historical cost method except for certain financial assets and liabilities which are measured at fair value.

These condensed interim consolidated financial statements should be read in conjunction with the Company's 2017 annual audited consolidated financial statements, including the accounting policies and notes thereto, included in the Annual Report and Annual Information Form/Form 40-F for the year ended December 31, 2017, which were prepared in accordance with IFRS.

In the opinion of management, these condensed interim consolidated financial statements reflect all adjustments, which consist of normal and recurring adjustments necessary to present fairly the financial position as at June 30, 2018 and December 31, 2017 and the results of operations and cash flows for the three and six months ended June 30, 2018 and June 30, 2017.

Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018.

B.: Basis of Presentation

Subsidiaries

These condensed interim consolidated financial statements include the accounts of Agnico Eagle and its consolidated subsidiaries. All intercompany balances, transactions, income and expenses and gains or losses have been eliminated on consolidation. Subsidiaries are consolidated where Agnico Eagle has the ability to exercise control. Control of an investee exists when Agnico Eagle is exposed to variable returns from the Company's involvement with the investee and has the ability to affect those returns through its power over the investee. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of control.

Joint Arrangements

A joint arrangement is defined as an arrangement in which two or more parties have joint control. Joint control is the contractually agreed sharing of control over an arrangement between two or more parties. This exists only when the decisions about the relevant activities that significantly affect the returns of the arrangement require the unanimous consent of the parties sharing control.

A joint operation is a joint arrangement whereby the parties have joint control of the arrangement and have rights to the assets and obligations for the liabilities relating to the arrangement. These condensed interim consolidated financial statements include the Company's interests in the assets, liabilities, revenues and expenses of the joint operations, from the date that joint control commenced. Agnico Eagle's 50% interest in each of Canadian Malartic Corporation ("CMC") and Canadian Malartic GP ("the Partnership"), the general partnership that holds the Canadian Malartic mine located in Quebec, has been accounted for as a joint operation.

AGNICO EAGLE MINES LIMITED
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(thousands of United States dollars, except share and per share amounts, unless otherwise indicated)
(Unaudited)
June 30, 2018

3. ACCOUNTING POLICIES

These condensed interim consolidated financial statements follow the same accounting policies and methods of their application as the December 31, 2017 annual audited consolidated financial statements except as described below for new accounting standards adopted effective January 1, 2018.

New Accounting Standards Adopted During the Year

IFRS 15 — Revenue from Contracts with Customers

The Company has adopted IFRS 15 — Revenue from Contracts with Customers ("IFRS 15") effective January 1, 2018 on a modified retrospective basis in accordance with the transitional provisions of IFRS 15. Results for reporting periods beginning after January 1, 2018 are presented under IFRS 15, while prior reporting period amounts have not been restated and continue to be reported under IAS 18 — Revenue ("IAS 18") (accounting standard in effect for those periods).

The Company has concluded that there are no significant differences between the point of transfer of risks and rewards for its metals under IAS 18 and the point of transfer of control under IFRS 15. No adjustment has been recorded to the opening deficit balance at January 1, 2018.

The following policies applied in accounting for revenue for the three and six months ended June 30, 2018. In the comparative period, revenue was accounted for in accordance with the revenue recognition policy disclosed in the Company's December 31, 2017 annual audited consolidated financial statements.

Gold and Silver

The Company sells gold and silver to customers in the form of bullion and dore bars.

The Company recognizes revenue from these sales when control of the gold or silver has transferred to the customer. This is generally at the point in time when the gold or silver is credited to the metal account of the customer. Once the gold or silver has been credited to the customer's metal account, the customer has legal title to, physical possession of, and the risks and rewards of ownership of the gold or silver; therefore, the customer is able to direct the use of and obtain substantially all of the remaining benefits from the gold or silver.

Under certain contracts with customers the transfer of control may occur when the gold or silver is in transit from the mine to the refinery. At this point in time, the customer has legal title to and the risk and rewards of ownership of the gold or silver; therefore, the customer is able to direct the use of and obtain substantially all of the remaining benefits from the gold or silver.

Revenue is measured at the transaction price agreed under the contract. Payment of the transaction price is due immediately when control of the gold or silver is transferred to the customer.

Generally, all of the gold and silver in the form of dore bars recovered in the Company's milling process is sold in the period in which it is produced.

Metal Concentrates

The Company sells concentrate from certain of its mines to third-party smelter customers. These concentrates predominantly contain zinc and copper, along with quantities of gold and silver.

The Company recognizes revenue from these concentrate sales when control of the concentrate has transferred to the customer, which is the point in time that the concentrate is delivered to the customer. Upon delivery, the customer has legal title to, physical possession of, and the risks and rewards of ownership of the concentrate. The customer is also committed to accept and pay for the concentrates once delivered; therefore, the customer is able to direct the use of and obtain substantially all of the remaining benefits from the concentrate.

The final prices for metals contained in the concentrate are generally determined based on the prevailing spot market metal prices on a specific future date, which is established as of the date the concentrate is delivered to the customer. Upon transfer of control at delivery, the Company measures revenue under these contracts based on forward prices at the time of delivery and the most recent determination of the quantity of contained metals less smelting and refining charges charged by the customer. This reflects the best estimate of the transaction price expected to be received at final settlement. A receivable is recognized for this amount and subsequently measured at fair value to reflect variability associated with the embedded derivative for changes in the market metal prices. These changes in the fair value of the receivable are adjusted through revenue from other sources at each subsequent financial statement date.

3. ACCOUNTING POLICIES (Continued)

Under certain contracts with customers, the sale of gold contained in copper concentrate occurs once the metal has been processed into refined gold and is sold separately similar to the gold and silver dore bar terms described above. The transaction price for the sale of gold contained in concentrate is determined based on the spot market price upon delivery and provisional pricing does not apply.

IFRS 9 — Financial Instruments

The Company has adopted IFRS 9 — Financial Instruments ("IFRS 9") effective January 1, 2018 on a retrospective basis where appropriate; however in accordance with the transitional provisions of IFRS 9, comparative figures have not been restated except for the presentation of changes in the fair value of the time value component of options that the Company has designated as hedging items. IFRS 9 provides a revised model for recognition, measurement and impairment of financial instruments and includes a substantially reformed approach to hedge accounting.

As detailed below, the Company has changed its accounting policy for financial instruments retrospectively, except where described below. The main areas of change and corresponding transitional adjustments applied on January 1, 2018 are as follows:

i. Impact of adoption on the accounting for equity securities previously designated as available for sale

Upon adoption, investments in publicly traded equity securities held by the Company have been classified as fair value through other comprehensive income pursuant to the irrevocable election available under IFRS 9. These investments are recorded at fair value and changes in the fair value of these investments are recognized permanently in other comprehensive income. Upon adoption, an adjustment was recorded to reclassify the accumulated impairment losses on these investments. The adjustment to reduce the opening deficit on January 1, 2018 was $44.1 million ($40.8 million net of tax) with a corresponding adjustment to other reserves. There was no impact on net income for 2018.

ii. Impact of adoption on the accounting for derivative financial instruments

Upon adoption, the Company reassessed all of its existing hedge relationships that qualified for hedge accounting under IAS 39 — Financial Instruments: Recognition and Measurement ("IAS 39") and determined that these continued to qualify for hedge accounting under IFRS 9.

Under IFRS 9, the Company changed the presentation of the time value component of changes in the fair value of an option that is a hedging item. This time value component has been recorded in other comprehensive income, rather than in the gain on derivative financial instruments line item of the condensed interim consolidated statements of income. Generally the hedge accounting requirements of IFRS 9 are adopted on a prospective basis; however the adjustment for the time value component requires retrospective application including restatement of comparative period presentation.

The retrospective impact of the adoption of IFRS 9 for changes in the presentation of cumulative changes in the time value component of hedging items has been reflected as an adjustment to opening deficit on January 1, 2018. The adjustment to increase the opening deficit was $3.1 million ($4.5 million net of tax) with a corresponding adjustment to other reserves.

For the three and six month comparative periods ended June 30, 2017, the Company has reclassified the portion of the gain on derivative financial instruments that was due to the change in the time value component of hedging items to the unrealized change in fair value of cost of hedging recorded in other comprehensive income (loss). This resulted in a decrease in net income of $7.0 million ($8.1 million before tax) for the three and six months ended June 30, 2017. There was a corresponding increase in other comprehensive income (loss) for the three and six months ended June 30, 2017.

Financial Assets

IFRS 9 includes a revised model for classifying financial assets, which results in classification according to a financial instrument's contractual cash flow characteristics and the business models under which they are held. At initial recognition, financial assets are measured at fair value. Under the IFRS 9 model for classification of financial assets the Company has classified and measured its financial assets as described below:

•: Cash and cash equivalents, restricted cash, and short-term investments are classified as financial assets measured at amortized cost. Previously under IAS 39 these amounts were classified as held to maturity.

•: Trade receivables are classified as financial assets at fair value through profit or loss and measured at fair value during the quotational period until the final settlement price is determined. Once the final settlement price is determined, trade receivables are classified as financial assets measured at amortized cost. Previously under IAS 39, trade receivables were classified as loans and receivables measured at amortized cost except for the provisional pricing embedded derivative that was measured at fair value through profit or loss.

3. ACCOUNTING POLICIES (Continued)

Except as noted above, the adoption of IFRS 9 did not result in a change in the carrying values of any of the Company's financial assets on the transition date.

Financial Liabilities

Financial liabilities are recognized initially at fair value and in the case of financial liabilities not subsequently measured at fair value, net of directly attributable transaction costs. Financial liabilities are derecognized when the obligation specified in the contract is discharged, canceled, or expired. For financial liabilities, IFRS 9 retains most of the IAS 39 requirements and since the Company does not have any financial liabilities designated at fair value through profit or loss, the adoption of IFRS 9 did not impact the Company's accounting policies for financial liabilities. Accounts payable and accrued liabilities, interest payable, and long-term debt are classified as financial liabilities to be subsequently measured at amortized cost.

Expected Credit Loss Impairment Model

IFRS 9 introduces a single expected credit loss impairment model, which is based on changes in credit quality since initial recognition. The adoption of the expected credit loss impairment model did not have a significant impact on the Company's financial statements, and did not result in a transitional adjustment.

Short-term Investments

The Company's short-term investments include financial instruments with remaining maturities of greater than three months but less than one year at the date of purchase. Short-term investments are designated as financial assets measured at amortized cost, which approximates fair value given the short-term nature of these investments.

Financial Instruments

The Company's financial assets and liabilities (financial instruments) include cash and cash equivalents, short-term investments, restricted cash, trade receivables, equity securities, accounts payable and accrued liabilities, long-term debt and derivative financial instruments. All financial instruments are recorded at fair value at recognition. Subsequent to initial recognition, financial instruments classified as cash and cash equivalents, short-term investments, accounts payable and accrued liabilities, and long-term debt are measured at amortized cost using the effective interest method. Other financial assets and liabilities are recorded at fair value subsequent to initial recognition.

Equity Securities

The Company's equity securities consist primarily of investments in common shares of entities in the mining industry recorded using trade date accounting. Equity securities are designated as fair value through other comprehensive income pursuant to the irrevocable election under IFRS 9. Changes in the fair value of equity securities are permanently recognized in other comprehensive income and will not be reclassified to profit or loss.

Derivative Instruments and Hedge Accounting

The Company uses derivative financial instruments (primarily option and forward contracts) to manage exposure to fluctuations in by-product metal prices, interest rates, and foreign currency exchange rates and may use such means to manage exposure to certain input costs.

The Company recognizes all derivative financial instruments in the condensed interim consolidated financial statements at fair value and are classified based on contractual maturity. Derivative instruments are classified as either hedges of highly probable forecasted transactions (cash flow hedges) or non-hedge derivatives. Derivatives designated as a cash flow hedge that are expected to be highly effective in achieving offsetting changes in cash flows are assessed on an ongoing basis to determine that they have actually been highly effective throughout the financial reporting periods for which they were designated. Derivative assets and derivative liabilities are shown separately in the balance sheet unless there is a legal right to offset and intent to settle on a net basis.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized in the loss (gain) on derivative financial instruments line item of the condensed interim consolidated statements of income. Amounts deferred in other comprehensive income are reclassified when the hedged transaction has occurred.

Derivative instruments that do not qualify for hedge accounting are recorded at fair value at the balance sheet date, with changes in fair value recognized in the loss (gain) on derivative financial instruments line item of the condensed interim consolidated statements of income.

3. ACCOUNTING POLICIES (Continued)

Recently Issued Accounting Pronouncements

IFRS 16 — Leases

In January 2016, IFRS 16 — Leases was issued, which requires lessees to recognize assets and liabilities for most leases, as well as corresponding amortization and finance expense. Application of the standard is mandatory for annual reporting periods beginning on or after January 1, 2019, with earlier application permitted. The Company plans to adopt the new standard beginning January 1, 2019.

The Company expects that the new standard will result in an increase in assets and liabilities, as well as a corresponding increase in amortization and finance expense. The Company also expects that cash flow from operating activities will increase under the new standard because lease payments for most leases will be recorded as cash outflows from financing activities in the statements of cash flows. The magnitude of these impacts of adopting the new standard have not yet been determined.

The Company has established an implementation plan to assess the accounting impacts of the new standard and the related impacts on internal controls over the remainder of 2018. The Company is currently conducting a review of its contracts with suppliers to assess the impact of the new standard and to collect data necessary for adoption of the new standard. The Company expects to report more detailed information, including the quantitative impact, if material, in its consolidated financial statements as the effective date approaches.

4. SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of these condensed interim consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the amounts reported in the condensed interim consolidated financial statements and accompanying notes. Management believes that the estimates used in the preparation of the condensed interim consolidated financial statements are reasonable; however, actual results may differ materially from these estimates. The areas involving significant judgments, estimates and assumptions have been detailed in note 4 to the Company's annual audited consolidated financial statements for the year ended December 31, 2017.

5. ACQUISITION

CMC Exploration Assets

On March 28, 2018, the Company acquired 100% of the Canadian exploration assets of CMC, including the Kirkland Lake and Hammond Reef Gold projects (the "CMC Transaction") by way of an asset purchase agreement (the "Agreement") dated December 21, 2017. On the closing of the transactions relating to the Agreement, Agnico had acquired all of Yamana's indirect 50% interest in the Canadian exploration assets of CMC, giving Agnico Eagle 100% ownership of CMC's interest in the assets on closing of the CMC Transaction.

Pursuant to the Agreement, the effective consideration for the exploration assets after the distribution of the sale proceeds by CMC to its shareholders totaled $162.5 million in cash paid at closing.

The acquisition was accounted for by the Company as an asset acquisition and transaction costs associated with the acquisition totaling $2.9 million were capitalized to the mining properties acquired separately from the purchase price allocation set out below.

The following table sets out the allocation of the purchase price to assets acquired and liabilities assumed, based on management's estimates of fair value:


Total purchase price:
Cash paid for acquisition	$	162,479

Total purchase price to allocate	$	162,479

Fair value of assets acquired and liabilities assumed:
Mining properties	$	161,242
Plant and equipment		2,423
Reclamation provision		(1,186	)

Net assets acquired	$	162,479

6. FAIR VALUE MEASUREMENT

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities for which fair value is measured or disclosed in the condensed interim consolidated financial statements are categorized within the fair value hierarchy, described, as follows, based on the lowest-level input that is significant to the fair value measurement as a whole:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 — Quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

For items that are recognized at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing their classification at the end of each reporting period.

During the three and six months ended June 30, 2018, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into or out of Level 3 fair value measurements.

The Company's financial assets and liabilities include cash and cash equivalents, short-term investments, restricted cash, trade receivables, equity securities, accounts payable and accrued liabilities, long-term debt and derivative financial instruments.

The fair values of cash and cash equivalents, short-term investments, restricted cash and accounts payable and accrued liabilities approximate their carrying values due to their short-term nature.

Long-term debt is recorded on the condensed interim consolidated balance sheets at June 30, 2018 at amortized cost. The fair value of long-term debt is determined by applying a discount rate, reflecting the credit spread based on the Company's credit rating, to future related cash flows which is categorized within Level 2 of the fair value hierarchy. As at June 30, 2018, the Company's long-term debt had a fair value of $1,776.2 million (December 31, 2017- $1,499.4 million).

The following table sets out the Company's financial assets measured at fair value on a recurring basis as at June 30, 2018 using the fair value hierarchy:

	Level 1		Level 2		Level 3		Total

Financial assets:
Trade receivables	$	—	$	13,479	$	—	$	13,479
Equity securities		58,331		14,890		—		73,221
Fair value of derivative financial instruments		—		5,558		—		5,558

Total financial assets	$	58,331	$	33,927	$	—	$	92,258

Financial liabilities:
Fair value of derivative financial instruments	$	—	$	5,508	$	—	$	5,508

Total financial liabilities	$	—	$	5,508	$	—	$	5,508

Valuation Techniques

Trade Receivables

Trade receivables from provisional invoices for concentrate sales are valued using quoted forward rates derived from observable market data based on the month of expected settlement (classified within Level 2 of the fair value hierarchy).

6. FAIR VALUE MEASUREMENT (Continued)

Equity Securities

Equity securities representing shares of publicly traded entities are recorded at fair value using quoted market prices (classified within Level 1 of the fair value hierarchy). Equity securities representing shares of non-publicly traded entities or non-transferable shares of publicly traded entities are recorded at fair value using external broker-dealer quotations corroborated by option pricing models (classified within Level 2 of the fair value hierarchy).

Derivative Financial Instruments

Derivative financial instruments classified within Level 2 of the fair value hierarchy are recorded at fair value using external broker-dealer quotations corroborated by option pricing models or option pricing models that utilize a variety of inputs that are a combination of quoted prices and market-corroborated inputs.

7. INVENTORIES

During the three months ended June 30, 2018 impairment losses of $7.7 million (2017 — nil) were recorded within production costs to reduce the carrying value of inventories to their net realizable value. During the six months ended June 30, 2018 impairment losses of $8.7 million (2017 — nil) were recorded within production costs to reduce the carrying value of inventories to their net realizable value.

8. EQUITY SECURITIES

During the three months ended June 30, 2018, the Company purchased certain equity securities totaling $3.0 million (2017 — $13.9 million). During the six months ended June 30, 2018, the Company purchased certain equity securities totaling $7.3 million (2017 — $36.4 million).

During the three months ended June 30, 2018, the Company received net proceeds of $16.3 million (2017 — nil) on the sale of certain equity securities. During the six months ended June 30, 2018, the Company received net proceeds of $16.3 million (2017 — $0.2 million) on the sale of certain equity securities.

9. PROPERTY, PLANT AND MINE DEVELOPMENT

During the six months ended June 30, 2018, $639.0 million of additions (year ended December 31, 2017 — $1,044.5 million) were capitalized to property, plant and mine development.

Total borrowing costs capitalized to property, plant and mine development during the six months ended June 30, 2018 were approximately $2.8 million (year ended December 31, 2017 — $6.4 million) at a capitalization rate of 1.20% (year ended December 31, 2017 — 1.37%).

Assets with a net book value of $10.4 million were disposed of by the Company during the six months ended June 30, 2018 (year ended December 31, 2017 — $16.1 million), resulting in a net gain on disposal of $24.7 million (year ended December 31, 2017 — $9.9 million).

See note 18 to these condensed interim consolidated financial statements for capital commitments.

10. LONG-TERM DEBT

2018 Notes

On February 27, 2018, the Company closed a $350.0 million private placement of guaranteed senior unsecured notes (the "2018 Notes") which were funded on April 5, 2018. Upon issuance, the 2018 Notes had a weighted average maturity of 13.9 years and weighted average yield of 4.57%. Proceeds from the 2018 Notes were allocated towards working capital and general corporate purposes.

10. LONG-TERM DEBT (Continued)

The following table sets out details of the individual series of the 2018 Notes:

	Principal

Series A	$	45,000	4.38%	4/5/2028
Series B		55,000	4.48%	4/5/2030
Series C		250,000	4.63%	4/5/2033

Total	$	350,000

Payment and performance of Agnico Eagle's obligations under the 2018 Notes is guaranteed by each of its material subsidiaries and certain of its other subsidiaries (the "Guarantors").

The 2018 Notes contain covenants that restrict, among other things, the ability of the Company to amalgamate or otherwise transfer its assets, sell material assets, carry on a business other than one related to mining and the ability of the Guarantors to incur indebtedness.

The 2018 Notes also require the Company to maintain a total net debt to earnings before interest, taxes, depreciation and amortization ("EBITDA") ratio below a specified maximum value.

Credit Facility

As at June 30, 2018 and December 31, 2017, no amounts were outstanding under the Company's $1.2 billion Credit Facility. Outstanding letters of credit under the Credit Facility resulted in Credit Facility availability of $1,199.2 million at June 30, 2018 (December 31, 2017 — $1,199.2 million). During the six months ended June 30, 2018, Credit Facility drawdowns totaled $250.0 million and repayments totaled $250.0 million. During the six months ended June 30, 2017, Credit Facility drawdowns totaled $280.0 million and repayments totaled $280.0 million.

11. EQUITY

Net Income Per Share

The following table sets out the weighted average number of common shares used in the calculation of basic and diluted net income per share:

	Three Months Ended June 30,				Six Months Ended June 30,

	2018		2017		2018		2017
Net income for the period	$	4,972	$	54,876	$	49,902	$	130,826

Weighted average number of common shares outstanding — basic (in thousands)		232,829		230,798		232,660		228,842
Add: Dilutive impact of common shares related to the RSU plan, PSU plan and LTIP		895		812		824		747
Add: Dilutive impact of employee stock options		1,225		1,921		1,194		1,645

Weighted average number of common shares outstanding — diluted (in thousands)		234,949		233,531		234,678		231,234

Net income per share — basic	$	0.02	$	0.24	$	0.21	$	0.57

Net income per share — diluted	$	0.02	$	0.23	$	0.21	$	0.57

Diluted net income per share has been calculated using the treasury stock method. In applying the treasury stock method, outstanding employee stock options with an exercise price greater than the average quoted market price of the common shares for the period outstanding are not included in the calculation of diluted net income per share as the impact would be anti-dilutive.

For the three months ended June 30, 2018, 2,019,262 (2017 — 35,000) employee stock options were excluded from the calculation of diluted net income per share as their impact would have been anti-dilutive. For the six months ended June 30, 2018, 3,847,952 (2017 — 52,000) employee stock options were excluded from the calculation of diluted net income as their impact would have been anti-dilutive.

12. STOCK-BASED COMPENSATION

(a): Employee Stock Option Plan ("ESOP")

The following table sets out activity with respect to Agnico Eagle's outstanding stock options:

	Six Months Ended June 30, 2018					Six Months Ended June 30, 2017

	Number of Stock Options			Weighted Average Exercise Price		Number of Stock Options			Weighted Average Exercise Price
Outstanding, beginning of period		5,857,504		C$	41.18		5,478,837		C$	34.40
Granted		1,990,850			58.04		2,018,140			56.57
Exercised		(832,599	)		33.12		(1,159,961	)		35.24
Forfeited		(54,412	)		53.59		(51,100	)		41.44
Expired		(207,000	)		52.13		(1,100	)		37.05

Outstanding, end of period		6,754,343		C$	46.70		6,284,816		C$	41.31

Options exercisable, end of period		3,814,141		C$	41.11		3,000,891		C$	38.30

The average share price of Agnico Eagle's common shares during the six months ended June 30, 2018 was C$55.82 (2017 — C$61.30).

Agnico Eagle estimated the fair value of stock options under the Black-Scholes option pricing model using the following weighted average assumptions:

	Six Months Ended June 30,

	2018		2017
Risk-free interest rate		2.10%		1.15%
Expected life of stock options (in years)		2.4		2.3
Expected volatility of Agnico Eagle's share price		35.0%		45.0%
Expected dividend yield		1.00%		1.09%

The Company uses historical volatility to estimate the expected volatility of Agnico Eagle's share price. The expected term of stock options granted is derived from historical data on employee exercise and post-vesting employment termination experience.

The total compensation expense for the ESOP recorded in the general and administrative line item of the condensed interim consolidated statements of income for the three months ended June 30, 2018 was $3.9 million (2017 — $3.8 million) and $11.9 million for the six months ended June 30, 2018 (2017 — $11.5 million). Of the total compensation cost for the ESOP, $0.1 million was capitalized as part of the property, plant and mine development line item of the condensed interim consolidated balance sheets for the three months ended June 30, 2018 (2017 — $0.1 million) and $0.3 million for the six months ended June 30, 2018 (2017 — $0.2 million).

(b): Incentive Share Purchase Plan ("ISPP")

During the six months ended June 30, 2018, 238,447 common shares were subscribed for under the ISPP (2017 — 189,545) for a value of $10.3 million (2017 — $8.5 million). The total compensation cost recognized during the three months ended June 30, 2018 related to the ISPP was $1.7 million (2017 — $1.4 million) and $3.4 million for the six months ended June 30, 2018 (2017 — $2.8 million).

(c): Restricted Share Unit ("RSU") Plan

During the six months ended June 30, 2018, 373,986 (2017 — 366,642) RSUs were granted with a grant date fair value of $18.0 million (2017 — $16.3 million). In the first six months of 2018, the Company funded the RSU plan by transferring $18.0 million (2017 — $16.3 million) to an employee benefit trust that then purchased common shares of the Company in the open market.

12. STOCK-BASED COMPENSATION (Continued)

Compensation expense related to the RSU plan was $4.2 million for the three months ended June 30, 2018 (2017 — $3.1 million) and $7.8 million for the six months ended June 30, 2018 (2017 — $7.3 million). Compensation expense related to the RSU plan is included as part of the general and administrative line item of the condensed interim consolidated statements of income.

(d): Performance Share Unit ("PSU") Plan

During the six months ended June 30, 2018, 180,000 (2017 — 182,000) PSUs were granted. In the first six months of 2018, the Company funded the PSU plan by transferring $8.4 million (2017 — $8.1 million) to an employee benefit trust that then purchased common shares of the Company in the open market.

Compensation expense related to the PSU plan was $2.2 million for the three months ended June 30, 2018 (2017 — $1.2 million) and $4.4 million for the six months ended June 30, 2018 (2017 — $3.2 million). Compensation expense related to the PSU plan is included as part of the general and administrative line item of the condensed interim consolidated statements of income.

13. OTHER RESERVES

The following table sets out the components of other reserves and the movements in other reserves during the six months ended June 30, 2018 and June 30, 2017:

	Equity securities reserve			Cash flow hedge reserve			Costs of hedging reserve			Total

Balance at December 31, 2016	$	32,127		$	—		$	—		$	32,127
Unrealized change in fair value		(465	)		2,311			8,078			9,924
Tax impact		(245	)		—			(1,070	)		(1,315	)
Realized gain reclassified to net income		(79	)		—			—			(79	)
Impairment loss reclassified to net income		5,814			—			—			5,814
Tax impact		(766	)		—			—			(766	)

Balance at June 30, 2017	$	36,386		$	2,311		$	7,008		$	45,705

Balance at December 31, 2017	$	19,585		$	10,763		$	—		$	30,348
Adoption of IFRS 9 on January 1, 2018		(44,048	)		3,092			—			(40,956	)
Tax impact		3,237			1,426			—			4,663

Adjusted Balance at January 1, 2018	$	(21,226	)	$	15,281		$	—		$	(5,945	)
Net change in fair value		(40,328	)		(7,207	)		(1,825	)		(49,360	)
Hedging gains transferred to property, plant and mine development		—			(3,405	)		—			(3,405	)

Balance at June 30, 2018	$	(61,554	)	$	4,669		$	(1,825	)	$	(58,710	)

14. REVENUES FROM MINING OPERATIONS

The Company has recognized the following amounts relating to revenue in the condensed interim consolidated statements of income:

	Three Months Ended June 30, 2018⁽ⁱ⁾		Six Months Ended June 30, 2018⁽ⁱ⁾

Revenue from contracts with customers	$	555,102	$	1,133,687
Provisional pricing adjustments on concentrate sales		1,180		1,030

Total revenues from mining operations	$	556,282	$	1,134,717

14. REVENUES FROM MINING OPERATIONS (Continued)

The following table sets out the disaggregation of revenue by metals and form of sale:

	Three Months Ended June 30, 2018⁽ⁱ⁾		Six Months Ended June 30, 2018⁽ⁱ⁾

Revenues from contracts with customers:
Gold	$	525,976	$	1,070,042
Silver		19,068		41,402
Zinc		5,504		10,782
Copper		4,554		11,461

Total revenues from contracts with customers	$	555,102	$	1,133,687

Note:

(i): The Company has adopted IFRS 15 on a modified retrospective basis. Under this method, the comparative information has not been restated (refer to Note 3 — Accounting Policies).

15. DERIVATIVE FINANCIAL INSTRUMENTS

Currency Risk Management

The Company uses foreign exchange economic hedges to reduce the variability in expected future cash flows arising from changes in foreign currency exchange rates. The Company is primarily exposed to currency fluctuations relative to the US dollar as a significant portion of the Company's operating costs and capital expenditures are denominated in foreign currencies; primarily the Canadian dollar, the Euro and the Mexican peso. These potential currency fluctuations increase the volatility of, and could have a significant impact on, the Company's production costs and capital expenditures. The economic hedges relate to a portion of the foreign currency denominated cash outflows arising from foreign currency denominated expenditures.

As at June 30, 2018, the Company had outstanding foreign exchange zero cost collars with a cash flow hedging relationship that did qualify for hedge accounting under IFRS 9. The purchase of US dollar put options was financed through selling US dollar call options at a higher level such that the net premium payable to the different counterparties by the Company was nil. At June 30, 2018, the zero cost collars hedged $138.0 million of 2018 expenditures. The Company recognized the mark-to-market adjustment in other comprehensive income. Amounts deferred in other comprehensive income are reclassified when the hedged transaction has occurred.

As at June 30, 2018, the Company also had outstanding derivative contracts where hedge accounting was not applied. At June 30, 2018, the non-hedge derivatives related to $667.3 million of 2018 and 2019 expenditures and the Company recognized mark-to-market adjustments in the loss (gain) on derivative financial instruments line item of the condensed interim consolidated statements of income.

Mark-to-market gains and losses related to foreign exchange derivative financial instruments are recorded at fair value based on broker-dealer quotations corroborated by option pricing models that utilize period end forward pricing of the applicable foreign currency to calculate fair value.

The Company's other foreign currency derivative strategies in 2018 and 2017 consisted mainly of writing US dollar call options with short maturities to generate premiums that would, in essence, enhance the spot transaction rate received when exchanging US dollars for Canadian dollars and Mexican pesos. All of these derivative transactions expired prior to period end such that no derivatives were outstanding as at June 30, 2018 or December 31, 2017. The call option premiums were recognized in the loss (gain) on derivative financial instruments line item of the condensed interim consolidated statements of income.

Commodity Price Risk Management

To mitigate the risks associated with fluctuating diesel fuel prices, the Company uses derivative financial instruments as economic hedges of the price risk on a portion of diesel fuel costs associated with the Meadowbank mine's diesel fuel exposure as it relates to operating costs. There were derivative financial instruments outstanding as at June 30, 2018 relating to 5.0 million gallons of diesel (December 31, 2017 — 5.0 million). The related mark-to-market adjustments prior to settlement were recognized in the loss (gain) on derivative financial instruments line item of the condensed interim consolidated statements of income. The Company does not apply hedge accounting to these arrangements.

15. DERIVATIVE FINANCIAL INSTRUMENTS (Continued)

Mark-to-market gains and losses related to heating oil derivative financial instruments are based on broker-dealer quotations that utilize period end forward pricing to calculate fair value.

As at June 30, 2018 and December 31, 2017, there were no metal derivative positions. The Company may from time to time utilize short-term financial instruments as part of its strategy to minimize risks and optimize returns on its by-product metal sales.

The following table sets out a summary of the amounts recognized in the loss (gain) on derivative financial instruments line item of the condensed interim consolidated statements of income:

	Three Months Ended June 30,						Six Months Ended June 30,

	2018			2017			2018			2017
Premiums realized on written foreign exchange call options	$	(736	)	$	(612	)	$	(1,537	)	$	(1,364	)
Unrealized loss (gain) on warrants⁽ⁱ⁾		248			(2	)		380			(12	)
Realized gain on currency and commodity derivatives		(135	)		(242	)		(517	)		(106	)
Unrealized loss (gain) on currency and commodity derivatives⁽ⁱ⁾		5,063			(1,721	)		4,808			(4,895	)

Loss (gain) on derivative financial instruments	$	4,440		$	(2,577	)	$	3,134		$	(6,377	)

Note:

(i): Unrealized gains and losses on financial instruments that did not qualify for hedge accounting are recognized through the loss (gain) on derivative financial instruments line item of the condensed interim consolidated statements of income and through the other line item of the condensed interim consolidated statements of cash flows.

16. OTHER (INCOME) EXPENSES

The following table sets out a summary of the amounts recognized in the other (income) expenses line item of the condensed interim consolidated statements of income:

	Three Months Ended June 30,						Six Months Ended June 30,

	2018			2017			2018			2017
(Gain) loss on disposal of property, plant and mine development	$	(25,241	)	$	8,030		$	(25,116	)	$	9,907
Interest income		(3,149	)		(2,233	)		(5,513	)		(4,613	)
Other		(1,117	)		(1,281	)		(408	)		(1,967	)

Other (income) expenses	$	(29,507	)	$	4,516		$	(31,037	)	$	3,327

Sale of West Pequop Joint Venture, Summit and PQX Properties

On June 11, 2018, the Company completed the sale of its 51% interest in the West Pequop Joint Venture and its 100% interest in the Summit and PQX properties located in northeastern Nevada (collectively, the "Nevada Properties") to a subsidiary of Newmont Mining Corp.

Under the purchase and sale agreement, the Company received a cash payment of $35.0 million and was granted a 0.8% net smelter return ("NSR") royalty on the Nevada Properties held by the West Pequop Joint Venture and a 1.6% NSR on the Summit and PQX properties. Upon closing of the sale, the Company recognized a net gain on disposal of $26.5 million in the other (income) expenses line item of the condensed interim consolidated statements of income and through the other line item of the condensed interim consolidated statements of cash flows.

The Nevada Properties were presented in the Company's Exploration segment.

17. SEGMENTED INFORMATION

The Company has adjusted its operating segments as a result of the acquisition of the additional 50.0% of the CMC exploration assets on March 28, 2018 (see note 5 for further details). The Company has reclassified the CMC exploration assets and applicable exploration expenses from the Canadian Malartic joint operation segment into the Exploration segment and comparative information has been restated to reflect this change.

	Six Months Ended June 30, 2018

	Revenues from Mining Operations		Production Costs			Exploration and Corporate Development			Segment Income (Loss)
Northern Business:
LaRonde mine	$	292,121	$	(127,844	)	$	—		$	164,277
LaRonde Zone 5 mine		855		(521	)		—			334
Lapa mine		17,877		(11,285	)		—			6,592
Goldex mine		76,265		(39,527	)		—			36,738
Meadowbank mine		169,167		(117,973	)		(6,984	)		44,210
Canadian Malartic joint operation		227,818		(97,877	)		(281	)		129,660
Kittila mine		120,096		(81,475	)		—			38,621

Total Northern Business		904,199		(476,502	)		(7,265	)		420,432

Southern Business:
Pinos Altos mine		136,281		(69,442	)		—			66,839
Creston Mascota mine		30,826		(19,877	)		—			10,949
La India mine		63,411		(33,200	)		—			30,211

Total Southern Business		230,518		(122,519	)		—			107,999

Exploration		—		—			(61,894	)		(61,894	)

Segments totals	$	1,134,717	$	(599,021	)	$	(69,159	)	$	466,537

Total segments income									$	466,537
Corporate and other:
Amortization of property, plant and mine development										(272,839	)
General and administrative										(64,108	)
Finance costs										(47,109	)
Loss on derivative financial instruments										(3,134	)
Environmental remediation										(233	)
Foreign currency translation loss										(390	)
Other income										31,037

Income before income and mining taxes									$	109,761

17. SEGMENTED INFORMATION (Continued)

	Six Months Ended June 30, 2017

	Revenues from Mining Operations		Production Costs			Exploration and Corporate Development			Segment Income (Loss)
Northern Business:
LaRonde mine	$	215,770	$	(91,006	)	$	—		$	124,764
Lapa mine		39,043		(24,649	)		—			14,394
Goldex mine		68,415		(31,571	)		—			36,844
Meadowbank mine		228,516		(108,375	)		(14,306	)		105,835
Canadian Malartic joint operation		188,076		(85,253	)		(405	)		102,418
Kittila mine		123,921		(72,339	)		—			51,582

Total Northern Business		863,741		(413,193	)		(14,711	)		435,837

Southern Business:
Pinos Altos mine		135,563		(52,392	)		—			83,171
Creston Mascota mine		30,510		(14,339	)		—			16,171
La India mine		67,528		(28,056	)		—			39,472

Total Southern Business		233,601		(94,787	)		—			138,814

Exploration		—		—			(44,925	)		(44,925	)

Segments totals	$	1,097,342	$	(507,980	)	$	(59,636	)	$	529,726

Total segments income									$	529,726
Corporate and other:
Amortization of property, plant and mine development										(260,949	)
General and administrative										(58,508	)
Impairment loss on equity securities										(5,814	)
Finance costs										(37,541	)
Gain on derivative financial instruments										6,377
Environmental remediation										(138	)
Foreign currency translation loss										(3,499	)
Other expenses										(3,327	)

Income before income and mining taxes									$	166,327

17. SEGMENTED INFORMATION (Continued)

	Total Assets as at

	June 30, 2018		December 31, 2017
Northern Business:
LaRonde mine	$	812,079	$	845,113
LaRonde Zone 5 mine		48,688		25,037
Lapa mine		19,597		17,867
Goldex mine		283,667		275,132
Meadowbank mine		568,724		565,355
Canadian Malartic joint operation		1,813,948		1,810,162
Meliadine project		1,396,517		1,194,414
Kittila mine		1,023,154		982,378

Total Northern Business		5,966,374		5,715,458

Southern Business:
Pinos Altos mine		670,578		668,492
Creston Mascota mine		44,213		50,144
La India mine		426,381		427,957

Total Southern Business		1,141,172		1,146,593

Exploration		601,123		410,241

Corporate and other		570,018		593,309

Total assets	$	8,278,687	$	7,865,601

18. COMMITMENTS AND CONTINGENCIES

As part of its ongoing business and operations, the Company has been required to provide assurance in the form of letters of credit for environmental and site restoration costs, custom credits, government grants and other general corporate purposes. As at June 30, 2018, the total amount of these guarantees was $355.4 million.

As at June 30, 2018 the Company had $196.2 million of commitments related to capital expenditures.

19. ONGOING LITIGATION

On August 2, 2016, Canadian Malartic General Partnership ("CMGP"), a general partnership jointly owned by the Company and Yamana (the "Partnership"), was served with a class action lawsuit filed in the Superior Court of Quebec with respect to allegations involving the Canadian Malartic mine. The complaint is in respect of "neighbourhood annoyances" arising from dust, noise, vibrations and blasts at the mine. The plaintiffs are seeking damages in an unspecified amount as well as punitive damages in the amount of C$20 million. The class action was certified in May 2017. In November 2017, a declaratory judgment was issued allowing the Partnership to settle individually with class members for 2017. On December 11, 2017, hearings were completed in respect of certain preliminary matters, including the Partnership's application for partial dismissal of the class action. Judgment was rendered on the preliminary matters and the partial dismissal of the class action was granted, removing the period of August 2013 to June 2014 from the class period. The Company and the Partnership will take all necessary steps to defend themselves from this lawsuit.

19. ONGOING LITIGATION (Continued)

On June 1, 2017, the Partnership was served with an application for judicial review to obtain the annulment of a governmental decree authorizing expansion of the Canadian Malartic mine. The Partnership is an impleaded party in the proceedings. The Company and the Partnership have reviewed the application for judicial review, consider the application without merit and will take all reasonable steps to defend against this application. The hearing on the merits is scheduled to take place in October 2018. While the Company believes it is highly unlikely that the annulment will be granted, the Company expects that if the annulment were to be granted, there would be a negative impact on the operations of the Canadian Malartic mine, which could include a reduction in anticipated future production.

20. SUBSEQUENT EVENTS

Dividends Declared

On July 25, 2018, Agnico Eagle announced that the Board approved the payment of a quarterly cash dividend of $0.11 per common share (a total value of approximately $25.7 million), payable on September 14, 2018 to holders of record of the common shares of the Company on August 31, 2018.

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Exhibit 99.1