Agnico Eagle Mines
Annual Report 2022

Plain-text annual report

A g n i c o E a g l e M i n e s L i m i t e d 2 0 2 2 A n n u a l R e p o r t Building for the Future 2022 Annual Report Agnico Eagle is a senior Canadian gold mining company, producing precious metals since 1957. Our operating mines are located in Canada, Australia, Finland and Mexico, with a pipeline of high-quality exploration and development projects in each of these regions, as well as in the United States. Agnico Eagle is a partner of choice within the mining industry, recognized globally for its leading environmental, social and governance practices. We have declared a cash dividend every year since 1983. Contents 2 Message from the President and CEO 4 Operations At-a-Glance 6 Environmental, Social and Governance Summary Performance 7 Message from the Executive Chair of the Board of Directors 8 Corporate Governance 10 Detailed Mineral Reserves and Mineral Resources 16 Operating and Financial Highlights 17 Management’s Discussion & Analysis 18 Forward-Looking Statements IBC Shareholder Information Building for the Future At Agnico Eagle, we pride ourselves on our great people, strong operating assets and culture of excellence going back over six decades. As we look to the future, that sense of pride will not change, it will simply expand. We will continue to build a high quality business, based on our competitive advantage, dedicated to sustainability and all stakeholders. Agnico Eagle Mines Limited 2022 Annual Report 1 Ammar Al-Joundi President and Chief Executive Officer Message from the President and CEO I am proud of what Agnico Eagle’s remarkable team has accomplished this past year. Building for the Future In 2022 we continued to transform our business building on our strategy to place the best assets, in the best regions, into the strongest hands. We consolidated our position in the prolific Abitibi Gold Belt, where our competitive advantage includes 50-plus years of operating experience, through the integration of Kirkland Lake Gold and the announced acquisition of Yamana Gold’s Canadian assets – including the other half of the world-class Canadian Malartic mine. We also entered a 50/50 joint venture with Teck Resources on the San Nicolás Copper-Zinc project in Zacatecas, Mexico – another high-quality, high-grade project, with competitive costs, located in a premier mining jurisdiction. In an environment with supply chain interruptions, tight labour markets, and the highest inflation over the past 40 years, we delivered record annual production, record operating cashflows, and record mineral reserves. We continued to build on our competitive advantage in the most prospective gold mining districts in the world, with the completion of the merger with Kirkland Lake Gold, the announced acquisition of Yamana’s Canadian assets and the partnership in Mexico with Teck, all while recording the safest year in our Company’s 65-year history. We integrated two large companies and delivered almost double the administrative synergies we originally targeted from the merger with Kirkland Lake Gold. As we look to 2023 and beyond, we are excited about the future. While 2022 was a year of key strategic positioning to build for the future, 2023 will be a year where we focus on strengthening our competitive position to deliver more value to all of our stakeholders for decades to come. 2 Agnico Eagle Mines Limited 2022 Annual ReportOur project pipeline remains strong, and we continue to review opportunities for organic growth. We are evaluating the AK and Near Surface deposits at Macassa, the Upper Beaver project near Kirkland Lake and the Wasamac project in Quebec. In Nunavut, we are working to expand Hope Bay’s mineral resources, as part of a potential larger production scenario. We also see significant upside potential at our existing Detour Lake, Canadian Malartic, Meliadine, Fosterville, Kittila and LaRonde assets – where we have extensive experience and existing infrastructure, making it easier to take advantage of new exploration discoveries. We believe our business can contribute to addressing global challenges such as climate change. In 2022, we released our Climate Action Report, which establishes what we believe to be achievable greenhouse gas (GHG) emission reduction targets and a credible pathway to decarbonization. We are putting the human, technical and financial capital in place to reduce our dependence on fossil fuels, while remaining among the lowest GHG emitters amongst the senior gold companies. We encourage you to read our Climate Action Report, which outlines the steps we are taking to instill a low-carbon culture across Agnico Eagle and reduce our carbon footprint. Building on Our Competitive Advantage Our priority in 2023 is to optimize and leverage the assets, capital infrastructure and competitive advantage we have built in the Abitibi Gold Belt. With Detour Lake and Canadian Malartic, we own two of the top 10 gold assets in the world and we believe these assets have the potential to further grow, extend their mine- life and accelerate our projects pipeline in the region. At Detour Lake, we see the potential to reach a production rate of a million ounces per year over multiple decades. Canadian Malartic, already a multi-decade mine, still holds significant exploration upside and we are focused on expanding its production over the next few years and for decades to come. We are also exploring opportunities to fully utilize Canadian Malartic’s excess mill capacity as the mine transitions to underground through 2028. This future excess capacity, when combined with excess mill capacity at the LaRonde Complex, has the potential to deliver up to 500,000 ounces of additional annual gold production from our other assets in the region, with relatively lower capital investment and lower environmental footprints. Being a trusted and valued member of the communities associated with our operations remains a fundamental principle and priority for our company. We continue to enhance our ESG credentials, with some of the lowest GHG emissions and freshwater usage in our industry. We maintain strong partnerships with all stakeholders, including First Nations, and we continue to support their development priorities. At Agnico Eagle, we take the long view to creating shareholder value, focusing on the world’s best mining jurisdictions based on geologic potential and political stability. This approach has worked well for us for the past 65 years, and we strongly believe that this is the right strategy in a world that is becoming increasingly complex and bifurcated. We have some tremendous opportunities ahead of us, and we are committed to delivering on them. I want to thank our owners, our communities and our business partners for their continued support in working together. Finally, I would like to thank all of our Agnico Eagle employees for your hard work, commitment and for keeping each other safe. Your dedication and pride have delivered solid results in difficult times. Your energy and ingenuity enable Agnico Eagle to continue building on our competitive advantage and creating value for our stakeholders for years to come. Ammar Al-Joundi President and Chief Executive Officer Agnico Eagle Mines Limited Our Decarbonization Pathway to Net-Zero Agnico Eagle has established an interim carbon reduction target of 30% in absolute Scope 1 and Scope 2 emissions by 2030 (based on 2021 levels) and a goal of achieving net-zero carbon emissions by 2050. 3 Agnico Eagle Mines Limited 2022 Annual ReportOperations At-a-Glance Agnico Eagle has established a valuable reputation for staying true to our mission, faithfully executing our business strategy, and delivering measured, responsible, growth. 12 1 2 9 16 8 Operations Exploration Projects Yamana Transaction 10 13 6 19 7 14 15 17 11 3 4 18 5 2022 PRODUCTION 3.14M1 Gold (in ounces) 2.29M Silver (in ounces) 8.20k Zinc (in tonnes) 2.90k Copper (in tonnes) 1. 2022 production at Detour Lake, Macassa and Fosterville is for the period from February 8, 2022 to December 31, 2022. 4 Agnico Eagle Mines Limited 2022 Annual Report Mining Operations 1. Meadowbank Complex (100%) Nunavut, Canada Open pit and underground mine 2022 payable production: 373,785 ounces of gold 7. Macassa Mine (100%) Ontario, Canada Underground mine in northeastern Ontario 2022 payable production1: 180,833 ounces of gold 2. Meliadine Mine (100%) Nunavut, Canada Underground and open pit mine 2022 payable production: 372,874 ounces of gold 3. LaRonde Complex (100%) Quebec, Canada Underground mines in Abitibi region 2022 payable production: 356,337 ounces of gold 4. Goldex Mine (100%) Quebec, Canada Underground mine in Abitibi region 2022 payable production: 141,502 ounces of gold 5. Canadian Malartic Mine (50%) Quebec, Canada Open pit mine in Abitibi region, Underground added in 2023 2022 payable production (50%): 329,396 ounces of gold 6. Detour Lake Mine (100%) Ontario, Canada Open pit mine in northeastern Ontario 2022 payable production1: 651,182 ounces of gold 8. Pinos Altos Complex (100%) Chihuahua State, northern Mexico Open pit and underground mine with milling and heap leach operation (gold, silver by-product) 2022 payable production2: 99,152 ounces of gold 9. La India Mine (100%) Sonora State, northern Mexico Open pit mine with heap leach operation in Mulatos Gold Belt 2022 payable production: 74,672 ounces of gold 10. Kittila Mine (100%) Lapland, northern Finland Underground mine 2022 payable production: 216,947 ounces of gold 11. Fosterville Mine (100%) Victoria, Australia Underground mine in southeastern Australia 2022 payable production1: 338,327 ounces of gold 1. 2022 production at Detour Lake, Macassa and Fosterville is for the period from February 8, 2022 to December 31, 2022. 2. 2022 payable production at the Pinos Altos Complex includes 2,630oz from the Creston Mascota mine. Exploration Projects 12. Hope Bay (100%) Nunavut, Canada Underground project The Hope Bay property contains substantial mineral reserves and mineral resources at the Doris, Madrid and Boston deposits. 13. Hammond Reef (100%) Northwestern Ontario, Canada A gold exploration project with significant open pit measured and indicated mineral resources. 14. Kirkland Lake Regional (100%) Northeastern Ontario, Canada Large property located in an historic gold district. Upper Beaver flagship project has gold-copper mineralization in an intrusive complex. Several other gold deposits (such as the AK, Anoki/McBean and Upper Canada zones) in altered rock near the Larder Cadillac Deformation Zone. 15. Timmins East Properties (100%) Northeastern Ontario, Canada The Timmins East land package covers 100 km strike length between Timmins, Ont., and the Quebec border. Properties host multiple past-producing gold mines including Holt, Holloway, Hislop, Taylor and Aquarius. 16. Santa Gertrudis (100%) Sonora, Mexico Significant shallow mineral resources at the site of a historical heap leach operation that produced approximately 565,000 ounces of gold at a grade of 2.1 g/t gold from 1991 to 1994. 17. Northern Territory (100%) Gold targets at Pine Creek, Maud Creek, Mt Paqualin and Union Reefs in Australia’s Northern Territory. Yamana Transaction The Yamana Transaction further solidifies Agnico Eagle’s presence in the Abitibi gold belt, a region of low political risk and high geological potential. Post closing, Agnico Eagle will own 100% of the Canadian Malartic Complex, 100% of the Wasamac project located in the Abitibi region of Quebec and several other exploration properties located in Ontario and Manitoba. 18. Canadian Malartic Complex (100% post closing) Yamana Exploration Projects: Quebec, Canada 19. Wasamac Gold Project (100%) Quebec, Canada The Wasamac Gold project is comprised of six mining concessions, 281 mineral claims and five mining leases, covering approximately 10,269 hectares. Monument Bay (100%) Northern Manitoba, Canada North Madsen (100%) Northwestern Ontario, Canada 5 Agnico Eagle Mines Limited 2022 Annual ReportEnvironmental, Social and Governance Summary Performance 2022 ESG Statistics1 1.2M Estimated total tonnes of CO2E 0.4 Average GHG emission intensity (tonnes of CO2E per oz of gold produced) 9.4M Cubic meters freshwater withdrawn for use 0.64 Global Combined Frequency (Lost- time Accident and Restricted Work) per 200,000 hours worked $16M Community investments Our 2022 Sustainability Performance In 2022, we continued to integrate environmental, social, and governance best practices in our business. On climate change, we set a target of 30% reduction of Scope 1 and 2 emissions by 2030 and published our first Climate Action Report which outlines our decarbonization and climate resilience plans. Following the merger with Kirkland Lake Gold, we shared best practices across the new organization to find opportunities to improve our sustainability performance and integrated our Ontario and Australian sites into our Risk Monitoring and Management System (RMMS). We continued to contribute to the quality of life in our host communities, worked on our Toward-Zero accident initiative, and took action to improve diversity, equity, and inclusion of our workforce. Topic 2022 Priorities 2022 Progress Environmental Incidents Water Management Achieve 0 major or critical/extreme environmental incidents 0 major or critical/extreme environmental incidents Begin implementation of corporate water management strategy at Legacy Kirkland Lake Gold sites to ensure consistent approach by 2023. Implementation underway at Detour Lake, Macassa, and Fosterville mines. Climate Change Develop integrated Climate Change Strategy for Agnico Eagle informed by scenario analysis and that includes interim targets. Announced an interim target, published our first Climate Action Report, completed initial corporate scenario analysis. Tailings Management Ensure Agnico Eagle’s critical infrastructure governance model is applied consistently across the organization with a focus on newly acquired sites. A gap analysis completed at Detour, Macassa and Fosterville to ensure the application of a consistent and robust governance model for critical infrastructure throughout the company. Community Relations Ensure common approach to documenting and mapping of stakeholder interactions. Progressive implementation of a common system to document and map stakeholder interactions. Enhance our process to align expectations between Indigenous groups, governments and Agnico Eagle. Continued to adapt our processes based on feedback from Indigenous groups and governments. Health & Safety 0 Fatalities 1 Fatality Achieve a Global Combined Frequency (Lost-time Accident and Restricted Work) below 0.89 per 200,000 hours worked 0.64 Global Combined Frequency People Implement interview bias training, continue leadership development programs, implemented a scholarship development program targeted to advance women, and advance other elements of diversity and inclusion strategy. Implemented Managing Bias in Hiring training, embedded inclusive leadership training into Leadership Development Programs, implemented a scholarship development program targeted to advance women into leadership roles. 1. ESG statistics are estimates. Final results will be included in the Company’s annual Sustainability Report. ESG statistics do not include Canadian Malartic (50% ownership in 2022). 6 Agnico Eagle Mines Limited 2022 Annual ReportMessage from the Executive Chair of the Board of Directors Sean Boyd Executive Chair of the Board of Directors At Agnico Eagle, we pride ourselves on our great people, strong operating assets and culture of excellence going back over six decades. As we look to the future, that sense of pride will not change. It will simply expand, as we build on our competitive advantage, dedicated to sustainability and to caring for our people and communities. I have no doubt Agnico Eagle will continue to generate long- term value and drive sustainable economic activity in the communities where we operate for generations to come. This is our culture, our legacy and our commitment to make mining work for all stakeholders. In 2022, we celebrated the many achievements of our retiring Board Chair Jim Nasso, who has always been a strong believer in sharing the benefits of mining with our people, their families, our partners and host communities. That way of doing business has served Agnico Eagle well, and 2022 was no exception. We took a number of important strategic steps, including the merger with Kirkland Lake Gold and the pending acquisition of Yamana Gold’s Canadian assets, which solidifies our 100% ownership of the Canadian Malartic mine. With these moves, we have consolidated our position in the rich Abitibi Gold Belt, owning two of the top 10 gold assets in the world. We will continue to build on our competitive advantage with long- life resources anchored in premier mining jurisdictions. As a leader in the global mining industry, we aim to be a climate action leader, too. We are mindful that to remain a partner of choice in our operating regions, we must build a decarbonization pathway to net-zero, starting with our commitment to reduce our GHG emissions by 30% by 2030. With more industry consolidation on the horizon, we will work strategically and creatively with others in the gold sector to ensure the best assets end up in the strongest hands – to the benefit of our industry, shareholders and stakeholders alike. Gold continues to be a great asset to own. With increasing financial and economic turmoil and rising geopolitical instability creating more uncertainty and volatility, the case for higher and record gold prices remains strong. On behalf of the Board, I want to commend Ammar and his team for their steady leadership and execution of the Company’s strategic plan. I also want to thank each and every member of the Agnico Eagle team for their hard work and dedication this past year and our external stakeholders for the continued confidence and support they have shown us. Sean Boyd Executive Chair of the Board of Directors Agnico Eagle Mines Limited 7 Agnico Eagle Mines Limited 2022 Annual ReportCorporate Governance We strive to earn and retain the trust of shareholders through a steadfast commitment to sound and effective corporate governance. Our governance practices reflect the structure and processes we believe are necessary to improve the Company’s performance and enhance shareholder value. Our Board of Directors consists of 12 directors, of which all but two are independent from management. The Board of Directors is ultimately responsible for overseeing the management of the business and affairs of the Company and, in doing so, is required to act in the best interests of the Company. It discharges its responsibilities either directly or through five committees – the Corporate Governance Committee, the Audit Committee, the Compensation Committee, the Health, Safety, Environment and Sustainable Development Committee and the Technical Committee. The Board of Directors recognizes that diversity is important to ensuring that the Board of Directors as a whole possesses the qualities, attributes, experience and skills to effectively oversee the strategic direction and management of the Company. It recognizes and embraces the benefits of having a diverse Board of Directors and has identified diversity within the Board of Directors as an essential element in attracting high-calibre directors and maintaining a high-functioning Board of Directors. It considers diversity to include different genders, ages, cultural backgrounds, races, ethnicities, geographic areas and other characteristics of its stakeholders and the communities in which the Company is present and conducts its business. The Board of Directors does not set any fixed percentages for any specific selection criteria as it believes all factors should be considered when assessing and determining the merits of an individual director and the composition of a high-functioning Board of Directors. The proportion of women is currently 40% (4 of 10) of the non-executive directors, the proportion of Aboriginal directors is 10% (1 of 10) of the non-executive directors, the proportion of women on the entire Board of Directors is 33% (4 of 12), the proportion of Aboriginal directors on the entire Board of Directors is 8% (1 of 12) and the proportion of visible minorities on the entire Board of Directors is 8% (1 of 12). The Board of Directors believes that the diversity represented by the directors seeking election at the 2022 annual general and special meeting supports an efficient and effective Board of Directors. Board Committees The Corporate Governance Committee advises and makes recommendations to the Board of Directors on corporate governance matters, the effectiveness of the Board of Directors and its committees, the contributions of individual directors and the identification and selection of director nominees. The Audit Committee assists the Board of Directors in its oversight responsibilities with respect to the integrity of the Company’s financial statements, cyber security, compliance with legal and regulatory requirements, external auditor qualifications and the independence and performance of the Company’s internal and external audit functions. The Compensation Committee advises and makes recommendations to the Board of Directors on the Company’s strategy, policies and programs for compensating and developing senior management and for compensating directors. The Health, Safety, Environment and Sustainable Development Committee (HSESD) advises and makes recommendations to the Board of Directors with respect to monitoring and reviewing HSESD policies, principles, practices and processes, climate change practices, diversity and inclusion practices, HSESD performance and regulatory issues relating to health, safety and the environment. It also supports the Company’s commitment to adopt best practices in mining operations, promotion of a healthy and safe work environment and environmentally sound and socially responsible resource development. The Technical Committee advises and makes recommendations to the Board of Directors on the Company’s operational practices and processes, monitors and reviews the risks associated with the Company’s operations and provides guidance to management of the Company with respect to operational practices and processes. 8 Agnico Eagle Mines Limited 2022 Annual ReportBoard of Directors Sean Boyd, FCPA, FCA Jeffrey Parr1,3 Jamie Sokalsky, CPA, CA 1,3 Executive Chair of the Board Director since 1998 Vice Chair of the Board Director since 2022 Lead Director Director since 2015 The Hon. Leona Aglukkaq P.C.4 Director since 2021 Ammar Al-Joundi President and Chief Executive Officer Director since 2022 Martine A. Celej 2 Director since 2011 Robert J. Gemmell 2,3 Jonathan Gill 4,5 Director since 2011 Director since 2022 Peter Grosskopf 2,3 Director since 2022 Elizabeth Lewis-Gray, FAusIMM FTSE GAICD 4,5 Director since 2022 Deborah McCombe, P.Geo.4,5 J. Merfyn Roberts, CA 2,5 Director since 2014 Director since 2008 1 Audit Committee 2 Compensation Committee 3 Corporate Governance Committee 4 Health, Safety, Environment and Sustainable Development (HSESD) Committee 5 Technical Committee Officers Ammar Al-Joundi President and Chief Executive Officer Natasha Vaz Chief Operating Officer – Ontario, Australia & Mexico David Smith Executive Vice President, Finance & Chief Financial Officer Guy Gosselin Executive Vice President, Exploration Jean Robitaille Executive Vice President, Chief Strategy & Technology Officer Dominique Girard Chief Operating Officer – Nunavut, Quebec & Europe Carol Plummer Executive Vice President, Operational Excellence Chris Vollmershausen Executive Vice President, Legal, General Counsel & Corporate Secretary 9 Agnico Eagle Mines Limited 2022 Annual ReportDetailed Mineral Reserves and Mineral Resources Mineral Reserves Gold reserves rise 9% to a record 48.7 million ounces The Company’s proven and probable mineral reserve estimate (net of 2022 gold production) totaled 1,186 million tonnes of ore grading 1.28 g/t gold, containing approximately 48.7 million ounces of gold, as at December 31, 2022. This is an increase of approximately 4.1 million ounces of gold (9%) compared to the proven and probable mineral reserves of 44.6 million ounces of gold in 920 million tonnes grading 1.51 g/t gold at year-end 2021 (a pro forma combination of Agnico Eagle’s and Kirkland Lake Gold’s gold mineral reserves prior to the Merger). The year- over-year increase is largely due to a positive drilling campaign and studies at the Detour Lake mine as well as successful replacement of production through conversion of mineral resources into mineral reserves at several other operations. The ore extracted from the Company’s mines in 2022 contained 3.53 million ounces of gold in-situ (55.9 million tonnes grading 1.97 g/t gold). Highlights from 2022 include: Detour Lake ending 2022 with 20.7 million ounces of gold in proven and probable mineral reserves due to successful drilling and technical evaluation of the open pit; Meliadine replacing 129% of mining depletion through drilling and studies; Macassa’s satellite AK and Near Surface deposits adding 115,330 ounces of new gold mineral reserves, and helping to replace mined depletion by 128%; and the initial declaration of mineral reserves in a small portion of the Odyssey South deposit at the Odyssey project of 98,000 ounces of gold (50% basis). The strong growth in mineral reserves at the Detour Lake mine is largely due to successful conversion drilling and a revised technical evaluation of the Detour open pit, which increased the proven and probable mineral reserves by 5.6 million ounces of gold year-over-year to 20.7 million ounces of gold in proven and probable mineral reserves (850 million tonnes grading 0.76 g/t gold) at December 31, 2022. In July 2022, the Company reported an updated mineral reserve and mineral resource estimate for the Detour Lake mine that increased proven and probable mineral gold reserves by 38% or 5.6 million ounces of gold to 20.4 million ounces of gold (835.1 million tonnes grading 0.76 g/t gold) from the December 31, 2021 mineral reserve estimate net of the first quarter of 2022 depletion. As at March 31, 2022, Detour Lake contained the following: proven mineral reserves of 77.59 million tonnes grading 1.12 g/t gold for approximately 2.8 million ounces of gold; probable mineral reserves of 757.5 million tonnes grading 0.72 g/t gold for approximately 17.6 million ounces of gold; combined measured and indicated mineral resources of 590.1 million tonnes grading 0.75 g/t gold (14.2 million ounces of gold); and inferred mineral resources of 75.2 million tonnes grading 0.75 g/t gold (1.8 million ounces of gold). The Company’s current mineral reserves are based on a gold price of $1,300 per ounce gold for all operating assets and variable assumptions for the pipeline projects. At a gold price 10% higher than the assumed gold price (leaving other assumptions unchanged), the Company estimates there would be an approximate 11% increase in the gold contained in proven and probable mineral reserves. Conversely, at a gold price 10% lower than the assumed gold price (leaving other assumptions unchanged), the Company estimates there would be an approximate 11% decrease in the gold contained in proven and probable mineral reserves. 10 Agnico Eagle Mines Limited 2022 Annual ReportMineral Resources Measured and indicated mineral resources rise by 12% and inferred mineral resources decrease by 14% At December 31, 2022, the Company’s measured and indicated mineral resources totaled 44.2 million ounces of gold (1,178 million tonnes grading 1.17 g/t gold). This represents a 12% (4.6 million ounce) increase in ounces of gold compared to the pro forma resources a year earlier. Highlights from 2022 include: continued conversion drilling success at the Odyssey project’s East Gouldie deposit resulting in the addition of 1.9 million ounces of gold in measured and indicated mineral resources (50% basis); at Detour Lake, the addition of 3.2 million ounces of gold in measured and indicated mineral resources through drilling and revised pit optimization; and at Santa Gertrudis, the addition of 417,000 ounces of gold in open-pit measured and indicated mineral resources through conversion drilling. At December 31, 2022, the Company’s inferred mineral resources totaled 311 million tonnes grading 2.63 g/t gold, or approximately 26.3 million ounces of gold. This represents an approximate 14% (4.3 million ounce) decrease in ounces of gold compared to the inferred mineral resources a year earlier. The variance is mostly due to the conversion of 5.4 million ounces of gold in inferred mineral resources being upgraded to indicated mineral resources or mineral reserves as a result of successful infill drilling programs. The reduction in inferred mineral resources was partially offset by the addition of 3.0 million ounces of gold in inferred mineral resources through successful exploration programs at various projects, with 2022 highlights that include: exploration drilling at Hope Bay adding 272,000 ounces of inferred mineral resources that will be the focus of follow-up drilling in 2023; and at East Gouldie, new inferred mineral resources of 370,000 ounces of gold being added through exploration drilling, offset by the successful conversion of 1.9 million ounces of gold in inferred mineral resources into measured and indicated mineral resources. Inferred mineral resources at East Gouldie total 16 million tonnes grading 2.54 g/t gold, or approximately 1.3 million ounces of gold (50% basis). Notes: Mineral reserves are not a subset of mineral resources. Tonnage amounts and contained metal amounts set out in these tables have been rounded to the nearest thousand, so aggregate amounts may differ from column totals. Please refer to the Company’s news release dated February 16, 2023 and the Company’s Annual Information Form for the year ended December 31, 2022 for further details on mineral reserves and mineral resources. The scientific and technical information relating to Agnico Eagle’s mineral reserves and mineral resources contained herein (other than the Canadian Malartic mine) has been approved by Dyane Duquette, P.Geo., Vice President, Mineral Resources Management; relating to mineral reserves and mineral resources at the Canadian Malartic mine and the Odyssey project, has been approved by Patrick Fiset, Eng., Technical Services Manager at Canadian Malartic Corporation (for engineering open-pit), Sylvie Lampron, Eng., Senior Project Mine Engineer at Canadian Malartic Corporation (for engineering underground) and Pascal Lehouiller, P.Geo., Senior Resource Geologist at Canadian Malartic Corporation (for geology), each of whom is a “Qualified Person” for the purposes of National Instrument 43-101 and have reviewed and approved disclosure of the technical information and data in this annual report. The assumptions used for the December 31, 2022 mineral reserve and mineral resource estimates reported by the Company were as follows: METAL PRICE FOR MINERAL RESERVE ESTIMATION1 Gold (US$/oz) $1,300 Silver (US$/oz) Copper (US$/lb) $18 $3.00 Zinc (US$/lb) $1.00 1. Exceptions: US$1,350 per ounce of gold used for Hope Bay and Hammond Reef; US$1,250 per ounce of gold used for Akasaba West; US$1,200 per ounce of gold and US$2.75 per pound of copper used for Upper Beaver. Mines/Projects Operating mines held by Kirkland Lake Gold before the Merger1 Operating mines held by Agnico Eagle Mines before the Merger2 METAL PRICE FOR MINERAL RESOURCE ESTIMATION5 Gold (US$/oz) $1,500 $1,625 Silver (US$/oz) – $22.50 Copper (US$/lb) – $3.75 Zinc (US$/lb) – $1.25 Pipeline projects 1. Detour, Macassa, Fosterville, Northern Territory. 2. LaRonde, LaRonde Zone 5, Goldex, Amaruq, Meliadine, Kittila, La India, Pinos Altos. 3. Hope Bay, Anoki-McBean, Hammond Reef, Chipriona, Tarachi, Santa Gertrudis. 4. Chipriona, Santa Gertrudis. 5. Exceptions: US$1,667 per ounce of gold used for Canadian Malartic, Odyssey, Akasaba West, Upper Canada, El Barqueno; US$1,533 per ounce of gold used for $3.75 $25.004 $1,6883 $1.25 Barsele; US$500 per ounce of gold used for Aquarius, US$22.67 per ounce of silver used for El Barqueno. EXCHANGE RATES1 CAD per US$1.00 Mexican peso per US$1.00 AUD per US$1.00 CAD1.30 MXP18.00 AUD1.36 US$ per €1.00 EUR1.10 1. Exceptions: exchange rate of C$1.25 per US$1.00 used for Upper Beaver, Upper Canada and Holt Complex, Detour Zone 58N; C$1.11 per US$1.00 used for Aquarius; US$1.00 per EUR1.15 used for Barsele. 11 Agnico Eagle Mines Limited 2022 Annual ReportDetailed Mineral Reserve Data (as at December 31, 2022) OPERATION/PROJECT PROVEN PROBABLE PROVEN & PROBABLE MINERAL RESERVES AS AT DECEMBER 31, 2022 GOLD LaRonde1 LaRonde Zone 52 LaRonde Complex Total Canadian Malartic3 Odyssey4 Mining Method Underground Underground AEM Share 100% 100% Open pit Underground 50% 50% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Canadian Malartic Complex Total Goldex5 Underground Akasaba West6 Quebec Total Open pit Detour (Above 0.5 g/t) Detour (Below 0.5 g/t) Open pit Open pit Detour Lake Total7 Macassa8 Underground Macassa Near Surface Underground AK Project Macassa Total Upper Beaver9 Underground Underground Hammond Reef10 Open pit Ontario Total Amaruq Amaruq Amaruq Total11 Meadowbank Open pit Underground Open pit 100% Meadowbank Complex Total Meliadine Meliadine Meliadine Total12 Hope Bay13 Nunavut Total Fosterville14 Australia Total Kittila15 Europe Total Pinos Altos Pinos Altos Pinos Altos Total16 La India17 Mexico Total Open pit Underground 100% 100% Underground 100% Underground 100% Underground 100% Open pit Underground 100% 100% Open pit 100% 000 Tonnes 2,809 4,904 7,713 25,802 — 25,802 607 — 34,122 68,681 38,941 107,622 g/t 5.23 2.08 3.23 0.70 — 0.70 2.89 — 1.31 1.18 0.43 0.91 135 15.33 — — — — 135 15.33 — — 107,757 1,868 25 1,892 — 1,892 458 557 1,015 93 3,000 608 608 1,224 1,224 2 2,671 2,673 14 2,687 — — 0.92 2.11 4.58 2.14 — 2.14 3.91 7.29 5.77 6.77 3.51 23.19 23.19 4.36 4.36 0.35 2.08 2.08 0.39 2.07 000 Oz Au 473 327 800 579 — 000 Tonnes 9,497 5,490 14,987 26,185 1,379 579 27,564 56 — 17,820 5,419 1,435 65,790 2,595 508,869 538 233,926 3,133 742,795 66 — — 66 — — 3,114 92 596 3,803 7,992 123,473 3,199 878,063 126 10,499 4 4,219 130 14,718 — — 130 14,718 58 131 188 4,791 13,658 18,449 20 16,232 338 453 453 171 171 — 178 178 — 49,398 5,955 5,955 26,029 26,029 2,508 5,122 7,630 3,310 179 10,939 g/t 6.69 2.17 5.03 1.10 2.22 1.16 1.58 0.84 2.13 0.90 0.38 0.73 17.29 5.31 5.20 15.10 5.43 0.84 0.85 3.82 5.49 4.30 — 4.30 4.59 6.54 6.03 6.49 5.67 6.39 6.39 4.20 4.20 1.28 2.33 1.98 0.76 1.61 000 Oz Au 000 Tonnes 2,042 12,306 383 10,394 2,425 22,699 926 51,988 98 1,379 1,025 53,366 906 147 18,427 5,419 4,503 99,912 14,657 577,550 2,893 272,867 17,551 850,417 1,731 3,249 16 100 1,846 1,395 92 596 3,937 7,992 3,323 123,473 24,115 985,820 1,289 12,366 745 4,243 2,034 16,610 — — 2,034 16,610 708 5,249 2,870 14,215 3,578 19,464 3,389 16,325 9,001 52,399 1,224 1,224 6,562 6,562 3,512 27,253 3,512 27,253 103 383 486 81 2,509 7,793 10,303 3,324 567 13,626 g/t 6.36 2.12 4.42 0.90 2.22 0.93 1.62 0.84 1.85 0.93 0.39 0.76 17.20 5.31 5.20 15.11 5.43 0.84 0.86 3.56 5.49 4.05 — 4.05 4.53 6.57 6.02 6.50 5.54 7.95 7.95 4.20 4.20 1.28 2.24 2.01 0.76 1.70 000 Oz Au 2,515 710 3,225 1,505 98 1,603 962 147 5,937 17,253 3,431 20,683 1,797 16 100 1,913 1,395 3,323 27,314 1,416 748 2,164 — 2,164 765 3,001 3,766 3,409 9,339 1,677 1,677 3,683 3,683 103 562 665 81 745 Total Gold 149,399 1.20 5,776 1,036,174 1.29 42,921 1,185,573 1.28 48,697 LaRonde Mine: Net smelter value cut-off varies according to mining type and depth, average is C$214.30/t. LaRonde Z5: Gold cut-off grade varies according to mining type and depth, not less than 1.32 g/t. Canadian Malartic: Gold cut-off grade not less than 0.36 g/t for Barnat pit and 0.41 g/t for Canadian Malartic pit. 1. 2. 3. 4. Odyssey: Gold cut-off grade varies according to depth, not less than 1.55 g/t. 5. 6. 7. 8. 9. 10. Hammond Reef: Gold cut-off grade not less than 0.41 g/t. 11. Amaruq: Gold cut-off grade varies according to mining type, not less than 1.14 g/t for open pit mineral reserves and 3.42 g/t for underground mineral reserves Goldex: Gold cut-off grade varies according to mining type and depth, not less than 0.90 g/t. Akasaba West: Net smelter value cut-off varies according to mining and depth, not less than C$28.40/t. Detour Lake: Gold cut-off grade not less than 0.26 g/t. Macassa: Gold cut-off grade varies according to mining type, not less than 7.28 g/t (incremental material is 3.37 g/t). Upper Beaver: Net smelter value cut-off not less than C$125/t. (gold cut-off grade for marginal underground mineral reserves from development is 1.14 g/t). 12. Meliadine: Gold cut-off grade varies according to mining type, not less than 1.83 g/t for open pit mineral reserves and 4.36 g/t for underground mineral reserves (gold cut-off grade for marginal underground mineral reserves from development is 1.82 g/t). 13. Hope Bay: Gold cut-off grade not less than 4.00 g/t. 14. Fosterville: Gold cut-off grade varies according to mining type, not less than 4.1 g/t. 15. Kittila: Gold cut-off grade varies according to haulage distance, not less than 2.60 g/t. 16. Pinos Altos: Net smelter value cut-off varies according to mining type, not less than C$9.33/t for open pit mineral reserves and US$46.34/t for the underground mineral reserves. 17. La India: Gold cut-off grade varies with haulage distance, not less than 0.19 g/t for oxide material and 0.93 g/t for sulphide material. 12 Agnico Eagle Mines Limited 2022 Annual ReportMINERAL RESERVES AS AT DECEMBER 31, 2022 OPERATION/PROJECT PROVEN PROBABLE PROVEN & PROBABLE SILVER LaRonde Pinos Altos Pinos Altos Pinos Altos Total Mining Method Underground Open pit Underground AEM Share 100% 100% 100% La India Open pit 100% 000 Tonnes 2,809 2 2,671 2,673 14 g/t 16.45 7.06 47.92 47.89 1.49 000 Oz Ag 1,485 0 4,115 4,116 1 000 Tonnes 9,497 2,508 5,122 7,630 3,310 g/t 21.53 37.53 46.71 000 Oz Ag 000 Tonnes 6,573 12,306 3,026 7,692 2,509 7,793 g/t 20.37 37.51 47.12 000 Oz Ag 8,059 3,026 11,807 43.69 10,718 10,303 44.78 14,834 4.03 428 3,324 4.01 429 Total Silver COPPER LaRonde Akasaba West Upper Beaver Total Copper ZINC LaRonde Total Zinc 5,496 31.70 5,601 20,436 26.97 17,720 25,932 27.97 23,321 Mining Method Underground Open pit Underground AEM Share 100% 100% 100% Mining Method Underground AEM Share 100% 000 Tonnes 2,809 — — 2,809 000 Tonnes 2,809 % 0.22 — — Tonnes Cu 6,241 — — 000 Tonnes 9,497 5,419 7,992 % 0.29 0.48 0.25 Tonnes Cu 000 Tonnes 27,421 12,306 25,895 19,980 5,419 7,992 % 0.27 0.48 0.25 Tonnes Cu 33,662 25,895 19,980 0.22 6,241 22,908 0.32 73,296 25,717 0.31 79,537 Tonnes Zn 000 Tonnes % Tonnes Zn 000 Tonnes % Tonnes Zn % 0.76 21,398 9,497 1.12 106,097 12,306 1.04 127,495 2,809 0.76 21,398 9,497 1.12 106,097 12,306 1.04 127,495 13 Agnico Eagle Mines Limited 2022 Annual ReportDetailed Mineral Resource Data (as at December 31, 2022) OPERATION / PROJECT MEASURED INDICATED MEASURED & INDICATED INFERRED MINERAL RESOURCES AS AT DECEMBER 31, 2022 GOLD LaRonde Mining Method AEM Share 000 Tonnes Underground 100% LaRonde Zone 5 Underground 100% LaRonde Complex Total Canadian Malartic Odyssey Open pit Underground East Malartic Underground East Gouldie Underground Odyssey Mine Total Canadian Malartic Complex Total 50% 50% 50% 50% — — — — — — — — — 000 Oz Au 000 Tonnes — — — — — — — — — 5,959 9,774 15,733 — 888 6,107 25,105 32,101 32,101 g/t — — — — — — — — — — 4,209 739 73,301 000 Oz Au 566 652 000 Tonnes 5,959 9,774 1,219 15,733 — 46 — 888 385 6,107 2,652 25,105 3,082 32,101 3,082 32,101 1,036 33,617 86 4,209 5,423 85,660 g/t 2.96 2.08 2.41 — 1.59 1.96 3.29 2.99 2.99 1.52 0.64 2.30 000 Oz Au 000 Tonnes 000 Oz Au g/t 566 652 2,942 4.91 464 12,376 3.13 1,244 1,219 15,317 3.47 1,708 — 46 2,804 0.73 11,250 2.18 66 787 385 38,781 2.01 2,510 2,652 16,189 2.54 1,320 3,082 66,221 2.17 4,616 3,082 69,025 2.11 4,682 1,775 18,840 1.74 1,057 86 — — — 6,162 103,183 2.24 7,447 g/t 2.96 2.08 2.41 — 1.59 1.96 3.29 2.99 2.99 1.64 0.64 2.24 1,434 697,821 0.74 16,520 728,681 0.77 17,955 58,317 0.62 1,156 — 2,868 5.80 534 2,868 5.80 534 973 4.35 136 Goldex Underground 100% 12,360 1.86 739 21,257 Akasaba West Open pit 100% — Quebec Total Detour Open pit 100% Detour Zone 58N Underground 100% 12,360 30,861 — — 1.86 1.45 — Detour Total 30,861 1.45 1,434 700,688 0.76 17,055 731,549 0.79 18,489 59,290 0.68 1,292 Macassa Underground 100% 272 10.49 92 2,153 9.24 639 2,425 9.38 731 1,904 16.52 1,011 Macassa Near Surface Underground 100% AK Project Underground 100% Macassa Total Aquarius Open pit 100% — — — — 272 10.49 — — — — 92 — Holt Complex Underground 100% 5,806 4.29 800 Anoki-McBean Underground 100% Upper Beaver Underground 100% Upper Canada Open pit 100% Upper Canada Underground 100% Upper Canada Total — — — — — Hammond Reef Open pit 100% 47,063 32 10.02 10 45 32 10.02 230 230 2,415 23,112 5,884 3,919 3,636 2,006 8,433 10,439 6.06 8.94 1.49 4.75 2.77 3.45 1.62 2.28 2.15 0.53 — — — — — 695 2,687 1,106 23,112 898 349 403 104 618 722 11,690 3,919 3,636 2,006 8,433 10,439 1,478 133,367 10 45 212 10.12 700 5.57 69 125 786 2,816 13.31 1,205 1,106 1,699 349 403 104 618 722 502 0.87 14 9,097 4.48 1,310 867 3.84 107 8,688 5.07 1,416 1,020 1.44 47 17,588 3.21 1,816 18,608 3.11 1,863 2,298 — — — 6.06 9.10 1.49 4.52 2.77 3.45 1.62 2.28 2.15 0.54 3,146 836,396 0.84 22,706 920,398 0.87 25,852 99,867 2.24 7,207 — — — — — 0.54 1.16 — — — — 4.48 4.53 4.53 — 4.53 2.86 5.36 3.67 3.65 — 3.65 3.66 — 2.76 2.76 — — — — 84,002 — — — — — 303 303 — 303 715 342 1,057 269 — 269 1,326 — 5,089 5,089 — — — — 819 86,304 — — — — — 44 44 — 44 66 59 125 32 — 32 5,806 7,398 13,203 13,203 3,590 8,457 12,047 9,784 35,034 1,251 8,485 9,736 16,416 5,115 21,531 156 31,267 — 452 452 — — — — — 16,212 16,212 — 3,178 1,158 4,335 5,089 2.76 452 20,547 2.49 4.46 3.60 3.60 3.44 4.41 4.12 3.58 3.77 3.36 5.44 5.18 1.42 5.39 2.36 3.24 — 2.74 2.74 — 1.08 1.77 1.27 2.43 465 1,061 5,806 7,398 1,526 13,203 1,526 13,203 397 1,198 3,590 8,759 1,595 12,350 1,125 9,784 4,246 35,337 135 1,485 1,966 8,827 1,621 10,793 749 887 16,685 5,115 1,636 21,800 3,257 32,593 — — 1,430 21,301 1,430 21,301 — 111 66 176 — 3,178 1,158 4,335 1,606 25,636 2.49 4.46 3.60 3.60 3.44 4.41 4.13 3.58 3.78 3.18 5.44 5.03 1.46 5.39 2.38 3.26 — 2.75 2.75 — 1.08 1.77 1.27 2.50 465 1,061 1,526 1,526 397 61 3.20 6,280 4.62 6,341 4.60 6,341 441 4.60 4.26 6 932 938 938 60 1,242 10,646 6.48 2,217 1,639 11,088 6.39 2,277 1,125 11,044 5.49 1,950 4,290 28,473 5.64 5,166 201 1,544 1,745 781 887 226 2.42 18 5,412 6.71 1,167 5,638 6.53 1,184 13,536 1.75 4,284 4.45 762 613 1,668 17,820 2.40 1,376 3,413 23,458 3.39 2,560 — 373 3.89 1,881 1,881 — 111 5,836 4.54 6,209 4.50 — — 2,260 1.25 47 853 899 — 91 66 13,552 2.10 914 176 15,811 1.98 1,005 2,058 22,020 2.69 1,904 Ontario Total Amaruq Amaruq Amaruq Total Open pit 100% Underground 100% Meadowbank Complex Total Meliadine Meliadine Open pit 100% Underground 100% Meliadine Total Hope Bay Underground 100% Nunavut Total Fosterville Fosterville Fosterville Total Open pit 100% Underground 100% Northern Territory Open pit 100% Northern Territory Underground 100% Northern Territory Total Australia Total Open pit 100% Underground 100% Open pit Open pit Underground 100% 55% 55% Kittilä Kittilä Kittilä Total Kuotko Barsele Barsele Barsele Total Europe Total 14 Agnico Eagle Mines Limited 2022 Annual ReportOPERATION / PROJECT MEASURED INDICATED MEASURED & INDICATED INFERRED MINERAL RESOURCES AS AT DECEMBER 31, 2022 Mining Method Open pit AEM Share 100% Underground 100% GOLD Pinos Altos Pinos Altos Pinos Altos Total La India Tarachi Chipriona El Barqueño Gold Open pit Open pit Open pit Open pit 100% 100% 100% 100% 100% Santa Gertrudis Open pit Santa Gertrudis Underground 100% Santa Gertrudis Total Total Mexico 000 Tonnes — — — g/t — — — 4,487 0.50 — — — — — — — — — — — — 000 Oz Au — — — 71 — — — — — — 000 Tonnes 2,801 12,355 15,157 549 19,290 12,877 8,834 17,638 — 17,638 4,487 0.50 71 74,344 000 Oz Au 83 744 827 17 361 346 331 516 — 000 Tonnes 2,801 12,355 15,157 5,036 19,290 12,877 8,834 17,638 — 516 17,638 2,397 78,831 g/t 0.92 1.87 1.70 0.99 0.58 0.83 1.16 0.91 — 0.91 1.00 000 Oz Au 000 Tonnes 000 Oz Au g/t 83 744 827 89 361 346 331 516 — 482 1.23 2,432 2.02 2,914 79 242 971 1.89 0.50 0.52 0.63 9,628 1.13 11,187 1.28 19 158 177 1 4 20 351 460 9,079 3.44 1,004 516 20,265 2.25 1,464 2,469 34,099 1.84 2,016 g/t 0.92 1.87 1.70 0.55 0.58 0.83 1.16 0.91 — 0.91 0.97 107,566 1.33 4,609 1,070,889 1.15 39,635 1,178,455 1.17 44,244 311,100 2.63 26,301 Mining Method AEM Share 000 Tonnes Underground 100% Open pit 100% Underground 100% Open pit Open pit 100% 100% 000 Oz Ag 000 Tonnes 000 Oz Ag 000 Tonnes g/t 000 Oz Ag 000 Tonnes g/t 000 Oz Ag g/t — — — — 5,959 7.55 1,446 5,959 7.55 1,446 2,942 21.16 2,001 2,801 17.88 1,610 2,801 17.88 1,610 482 26.73 414 12,355 48.35 19,204 12,355 48.35 19,204 2,432 32.45 2,537 15,157 42.71 20,814 15,157 42.71 20,814 2,914 31.50 2,951 g/t — — — — — — — — 4,487 2.38 343 549 4.91 87 5,036 2.65 430 79 1.73 4 — — — 12,877 89.72 37,146 12,877 89.72 37,146 971 81.78 2,552 Open pit 100% — — — — — — — — — 4,393 124.06 17,523 Total Gold SILVER LaRonde Pinos Altos Pinos Altos Pinos Altos Total La India Chipriona El Barqueño Silver El Barqueño Gold Santa Gertrudis Open pit Open pit 100% 100% Santa Gertrudis Underground 100% Santa Gertrudis Total Total Silver COPPER LaRonde Mining Method AEM Share 000 Tonnes Underground 100% Akasaba West Open pit 100% Upper Beaver Underground 100% Chipriona Open pit 100% — — — — — — — — — — — — 8,834 17,638 — 4.73 3.71 — 1,343 8,834 2,106 17,638 — — 4.73 3.71 — 1,343 9,628 16.86 5,218 2,106 11,187 2.07 745 — 9,079 23.31 6,803 17,638 3.71 2,106 17,638 3.71 2,106 20,265 11.58 7,548 4,487 2.38 343 61,013 32.09 62,941 65,500 30.05 63,284 41,192 28.54 37,798 Tonnes Cu 000 Tonnes Tonnes Cu % 000 Tonnes Tonnes Cu % 000 Tonnes Tonnes Cu % — — — — 5,959 0.11 6,496 5,959 0.11 6,496 2,942 0.34 10,053 4,209 0.38 16,075 4,209 0.38 16,075 — — — 3,636 0.14 5,135 3,636 0.14 5,135 8,688 0.20 17,284 12,877 0.14 18,382 12,877 0.14 18,382 971 0.11 1,051 % — — — — — — — — El Barqueño Gold El Barqueño Silver Total Copper ZINC LaRonde Chipriona Total Zinc Open pit 100% — — — 8,834 0.19 16,400 8,834 0.19 16,400 9,628 0.22 21,152 Open pit 100% — — — — — — — — — 4,393 0.04 1,854 — — 35,514 0.18 62,488 35,514 0.18 62,488 26,621 0.19 51,395 Mining Method AEM Share 000 Tonnes Underground 100% Open pit 100% — — — % — — — Tonnes Zn 000 Tonnes Tonnes Zn % 000 Tonnes Tonnes Zn % 000 Tonnes Tonnes Zn % — — 5,959 0.50 29,866 5,959 0.5 29,866 2,942 0.98 28,726 12,877 0.76 98,106 12,877 0.76 98,106 971 0.72 6,982 — 18,836 0.68 127,972 18,836 0.68 127,972 3,912 0.91 35,707 15 Agnico Eagle Mines Limited 2022 Annual ReportOperating and Financial Highlights By consolidating our position in premier mining jurisdictions, we continue to build a high-quality, low-risk business with the financial flexibility to invest in the future growth of the Company. All dollar amounts in this report are in US$ unless otherwise indicated Operating Highlights Payable gold production (ounces)1 Total cash costs per ounce 2 Average realized gold price per ounce Financial Highlights (millions, except per share amounts) Revenue from mining operations Net income for the year Net income per share – basic 2022 3,135,007 793 1,797 2022 5,741 670 1.53 $ $ $ $ $ $ $ $ $ $ 2021 2020 2,086,405 1,736,568 770 1,794 20213 3,870 562 2.31 $ $ $ $ $ 775 1,788 2020 3,138 512 2.12 Annualized dividend declared per share4 1. Payable production of a mineral means the quantity of mineral produced during a period contained in products that are sold by the Company, whether such products are 0.95 1.60 1.40 $ $ $ shipped during the period or held as inventory at the end of the period. 2. Total cash costs per ounce is a Non-GAAP measure and unless otherwise specified is reported on a by-product basis. For further information see “Note Regarding Certain Measures of Performance”. 3. Certain previously reported items for the year ended December 31, 2021 have been restated to reflect the retrospective application of IAS 16. 4. Agnico Eagle has now declared a cash dividend every year since 1983. Annualized Dividend (per share) 40 consecutive years of dividends 2020 $0.95 2019 $0.55 Superior Share Performance Over 10-year Investment Period AEM US Equity XAU Index Gold Spot 7.83% AEM US EQUITY CAGR1 4.10% XAU INDEX CAGR 4.76% GOLD SPOT CAGR 2022 $1.60 2023* $1.60 2021 $1.40 350 300 250 200 150 100 50 0 * Assuming the Board of Directors continues to declare dividends of $0.40 per quarter. Source: CaplQ 1. Assumes reinvestment of dividends of $0.32 in 2014, $0.32 in 2015, $0.36 in 2016, $0.41 in 2017, $0.44 paid in 2018, $0.55 paid in 2019, $0.95 paid in 2020, $1.40 paid in 2021 and $1.60 paid in 2022. 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 16 Agnico Eagle Mines Limited 2022 Annual Report Management’s Discussion & Analysis For the year ended December 31, 2022 (Prepared in accordance with International Financial Reporting Standards) Agnico Eagle Mines Limited 2022 Annual Report 17 Notes to Investors Regarding the Use of Mineral Resources The mineral reserve and mineral resource estimates contained in this annual report have been prepared in accordance with the Canadian securities administrators’ (the “CSA”) National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Effective February 25, 2019, the SEC disclosure requirements and policies for mining properties were amended to more closely align with current industry and global regulatory practices and standards, including NI 43-101. However, Canadian issuers that report in the United States using the Multijurisdictional Disclosure System (“MJDS”), such as the Company, may still use NI 43-101 rather than the SEC disclosure requirements when using the SEC’s MJDS registration statement and annual report forms. Accordingly, mineral reserve and mineral resource information contained in this annual report may not be comparable to similar information disclosed by U.S. companies. Investors are cautioned that while the SEC now recognizes “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources”, investors should not assume that any part or all of the mineral deposits in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. These terms have a great amount of uncertainty as to their economic and legal feasibility. Accordingly, investors are cautioned not to assume that any “measured mineral resources”, “indicated mineral resources”, or “inferred mineral resources” that the Company reports in this annual report are or will be economically or legally mineable. Further, “inferred mineral resources” have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that any part or all of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian regulations, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in limited circumstances. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is or will ever be economically or legally mineable. The mineral reserve and mineral resource data set out in this annual report are estimates, and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized. The Company does not include equivalent gold ounces for by-product metals contained in mineral reserves in its calculation of contained ounces and mineral reserves are not reported as a subset of mineral resources. See “Detailed Mineral Reserves and Mineral Resources” in this annual report for additional information. Note Regarding Certain Measures of Performance This annual report discloses certain measures, including “total cash costs per ounce”, that are not standardized measures under IFRS. These data may not be comparable to data reported by other issuers. For a reconciliation of these measures to the most directly comparable financial information reported in the consolidated financial statements prepared in accordance with IFRS and a discussion of how management uses these measures see “Non-GAAP Financial Performance Measures” in the MD&A. Forward-Looking Statements The information in this annual report has been prepared as at March 24, 2023. Certain statements contained in this annual report constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” under the provisions of Canadian provincial securities laws and are referred to herein as “forward-looking statements”. When used in this annual report, the words “anticipate”, “estimate”, “expect”, “forecast”, “future”, “plan”, “potential”, “will” and similar expressions are intended to identify forward- looking statements. Such statements include, without limitation: the Company’s outlook for 2023 and future periods; statements regarding expected synergies resulting from the merger with Kirkland Lake Gold; statements regarding future earnings and the sensitivity of earnings to gold and other metal prices; anticipated levels or trends for prices of gold and by-product metals mined by the Company or for exchange rates between currencies in which capital is raised, revenue is generated or expenses are incurred by the Company; estimates of future mineral production and sales; estimates of future costs, including mining costs, total cash costs per ounce, all-in sustaining costs per ounce, minesite costs per tonne and other costs; estimates of future capital expenditures, exploration expenditures, development expenditures and other cash needs, and expectations as to the funding thereof; statements regarding the projected exploration, development and exploitation of ore deposits, including estimates of the timing of such exploration, development and production or decisions with respect thereto; estimates of mineral reserves and mineral resources and their sensitivities to gold prices and other factors, ore grades and mineral recoveries and statements regarding anticipated future exploration results; estimates of cash flow; estimates of mine life; anticipated timing of events at the Company’s mines, mine development projects and exploration projects; estimates of future costs and other liabilities for environmental remediation; statements regarding anticipated legislation and regulations and estimates of the impact thereof on the Company; other anticipated trends with respect to the Company’s capital resources and results of operations; statements regarding the transition to “pillarless” mining at the LaRonde mine to manage seismicity risks; statements regarding the expected closing of the Yamana Transaction and the joint venture with Teck Resources Limited for the San Nicolás copper-zinc development; and statements regarding the impact of the COVID-19 pandemic and measures taken to reduce the spread of COVID-19 on the Company’s operations and business. Such statements reflect the Company’s views as at the date of this annual report and are subject to certain risks, uncertainties and assumptions, and undue reliance should not be placed on such statements. Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by Agnico Eagle as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The material factors and assumptions used in the preparation of the forward looking statements contained herein, which may prove to be incorrect, include, but are not limited to, the assumptions set forth herein and in management’s discussion and analysis (“MD&A”) and the Company’s Annual Information Form (“AIF”) for the year ended December 31, 2022 filed with Canadian securities regulators and that are included in its Annual Report on Form 40-F for the year ended December 31, 2022 (“Form 40-F”) filed with the U.S. Securities and Exchange Commission (the “SEC”) as well as: that there are no significant disruptions affecting operations; that production, permitting, development, expansion and the ramp up of operations at each of Agnico Eagle’s properties proceeds on a basis consistent with current expectations and plans; that the relevant metal prices, foreign exchange rates and prices for key mining and construction supplies will be consistent with Agnico Eagle’s expectations; that Agnico Eagle’s current estimates of mineral reserves, mineral resources, mineral grades and metal recovery are accurate; that there are no material delays in the timing for completion of ongoing growth projects; that the Company’s current plans to optimize production are successful; and that there are no material variations in the current tax and regulatory environment. Many factors, known and unknown, could cause the actual results to be materially different from those expressed or implied by such forward looking statements. Such risks include, but are not limited to: the volatility of prices of gold and other metals; uncertainty of mineral reserves, mineral resources, mineral grades and mineral recovery estimates; uncertainty of future production, project development, capital expenditures and other costs; foreign exchange rate fluctuations; financing of additional capital requirements; cost of exploration and development programs; seismic activity at the Company’s operations, including the LaRonde mine; mining risks; community protests, including by First Nations groups; risks associated with foreign operations; governmental and environmental regulation; the volatility of the Company’s stock price; risks associated with the Company’s currency, fuel and by-product metal derivative strategies; and risks associated with the COVID-19 pandemic. For a more detailed discussion of such risks and other factors that may affect the Company’s ability to achieve the expectations set forth in the forward-looking statements contained in this annual report, see the AIF and MD&A filed on SEDAR at www.sedar.com and included in the Form 40-F filed on EDGAR at www.sec.gov, as well as the Company’s other filings with the Canadian securities regulators and the SEC. Other than as required by law, the Company does not intend, and does not assume any obligation, to update these forward-looking statements. 18 Agnico Eagle Mines Limited 2022 Annual ReportAGNICO EAGLE MINES LIMITED MANAGEMENT’S DISCUSSION AND ANALYSIS Controls Evaluation Outstanding Securities Critical IFRS Accounting Policies and Accounting Estimates Mineral Reserve Data Non-GAAP Financial Performance Measures Summarized Quarterly Data Three Year Financial and Operating Summary Page 39 40 40 42 45 68 74 Table of Contents Executive Summary Strategy Portfolio Overview Key Performance Drivers Results of Operations Revenues from Mining Operations Production Costs Exploration and Corporate Development Expense Amortization of Property, Plant and Mine Development General and Administrative Expense Finance Costs Loss (gain) on Derivative Financial Instruments Foreign Currency Translation Loss Other Expenses (Income) Income and Mining Taxes Expense Balance Sheet Review Liquidity and Capital Resources Operating Activities Investing Activities Financing Activities Off-Balance Sheet Arrangements Contractual Obligations 2022 Liquidity and Capital Resources Analysis Quarterly Results Review Outlook 2022 and 2023 Outlook Update 2021 Results Comparison to 2021 Outlook Operations Outlook Financial Outlook Risk Profile Impact of COVID-19 on the Company’s Business and Operations Financial Instruments Interest Rates Commodity Prices and Foreign Currencies Cost Inputs Operational Risk Regulatory Risk Page 1 2 3 9 11 11 13 17 18 18 18 19 19 20 20 20 21 21 22 22 24 24 25 25 26 26 26 27 32 36 36 37 38 38 39 39 39 This Management’s Discussion and Analysis (“MD&A”) dated March 24, 2023 of Agnico Eagle Mines Limited (“Agnico Eagle” or the “Company”) should be read in conjunction with the Company’s consolidated annual financial statements for the year ended December 31, 2022 that were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) (the “Annual Financial Statements”). The Annual 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, European Union euros (“Euros” or “€”) or Australian dollars (“A$”). Additional information relating to the Company, including the Company’s Annual Information Form for the year ended December 31, 2022 (the “AIF”), is available on the Canadian Securities Administrators’ (the “CSA”) SEDAR website at www.sedar.com and on the United States Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. NOTE TO INVESTORS CONCERNING FORWARD-LOOKING INFORMATION Certain statements in this MD&A, referred to herein as “forward-looking statements”, constitute “forward-looking information” under the provisions of Canadian provincial securities laws and constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, the Company’s plans, objectives, expectations, estimates, beliefs, strategies and intentions and can generally be identified by the use of words such as “anticipate”, “believe”, “budget”, “could”, “estimate”, “expect”, “forecast”, “likely”, “may”, “plan”, “potential”, “project”, “schedule”, “should”, “target”, “aim”, “will”, “would” or other variations of these terms or similar words. Forward-looking statements in this MD&A include, but are not limited to, the following: • statements regarding the impact of the COVID-19 pandemic and measures taken to reduce the spread of COVID-19 on the Company’s future operations, including its employees and business; • the Company’s outlook for 2023 and future periods, including metal production, estimated ore grades, recovery rates, project timelines, drilling results, life of mine estimates, total cash costs per ounce, all-in sustaining costs per ounce, minesite costs per tonne, other expenses, cash flows; • statements regarding future earnings and the sensitivity of earnings to gold and other metal prices; • estimated timing and conclusions of technical studies and evaluations; • the methods by which ore will be extracted or processed; • statements concerning the Company’s expansion plans at Kittila, Meliadine Phase 2, the Amaruq underground project and the Odyssey project, including the timing, funding, completion and commissioning thereof and production therefrom; • statements about the Company’s plans at the Hope Bay project; • statements concerning other expansion projects, recovery rates, mill throughput, optimization and projected exploration, including costs and other estimates upon which such projections are based; • statements regarding timing and amounts of capital expenditures, other expenditures and other cash needs, and expectations as to the funding thereof; • estimates of future mineral reserves, mineral resources, mineral production and sales; • the projected development of certain ore deposits, including estimates of exploration, development and production and other capital costs and estimates of the timing of such exploration, development and production or decisions with respect to such exploration, development and production; • estimates of mineral reserves and mineral resources and their sensitivities to gold prices and other factors, ore grades and mineral recoveries and statements regarding anticipated future exploration results; • statements regarding the Company’s ability to obtain the necessary permits and authorizations in connection with its proposed or current exploration, development and mining operations and the anticipated timing thereof; • statements regarding anticipated future exploration; • the anticipated timing of events with respect to the Company’s mine sites; • statements regarding the sufficiency of the Company’s cash resources; • statements regarding future activity with respect to the Company’s unsecured revolving bank credit facility; • statements regarding anticipated trends with respect to the Company’s operations, exploration and the funding thereof. • anticipated levels or trends for prices of gold and by-product metals mined by the Company or for exchange rates between currencies in which capital is raised, revenue is generated or expenses are incurred by the Company; • estimates of future costs and other liabilities for environmental remediation; and • statements regarding anticipated legislation and regulations, including with respect to climate change, and estimates of the impact on the Company. Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by Agnico Eagle as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The material factors and assumptions of Agnico Eagle upon which the forward-looking statements in this MD&A are based, and which may prove to be incorrect, include the assumptions set out elsewhere in this MD&A as well as: that governments, the Company or others do not take measures in response to the COVID-19 pandemic or otherwise that, individually or in the aggregate, materially affect the Company’s ability to operate its business and that there are no other significant disruptions affecting Agnico Eagle’s operations, whether due to labour disruptions, supply disruptions, damage to equipment, natural or man-made occurrences, disruptions related to the COVID-19 pandemic or other health and safety issues, or the responses of governments, communities, Agnico Eagle and others to such pandemic or other issues, mining or milling issues, political changes, title issues, community protests, including by First Nations groups, or otherwise; that permitting, development, expansion and the ramp-up of operations at each of Agnico Eagle’s mines, mine development projects and exploration projects proceed on a basis consistent with expectations and that Agnico Eagle does not change its exploration or development plans relating to such projects; that the exchange rates between the Canadian dollar, Australian dollar, Euro, Mexican peso and the US dollar will be approximately consistent with current levels or as set out in this MD&A; that prices for gold, silver, zinc and copper will be consistent with Agnico Eagle’s expectations; that prices for key mining and construction supplies, including labour costs, remain consistent with Agnico Eagle’s expectations; that production meets current expectations; that Agnico Eagle’s current estimates of mineral reserves, mineral resources, mineral grades and mineral recoveries are accurate; that there are no material delays in the timing for completion of development projects; and that there are no material variations in the current tax and regulatory environments that affect Agnico Eagle. The forward-looking statements in this MD&A reflect the Company’s views as at the date of this MD&A and involve known and unknown risks, uncertainties and other factors which could cause the actual results, performance or achievements of the Company or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, the risk factors set out in “Risk Factors” in our most recent Form 40-F/AIF on file with the SEC and Canadian provincial securities regulatory authorities. Given these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as otherwise required by law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based. Unless otherwise expressly stated, milestones set out in this MD&A have not been based on a technical report under NI 43-101 (as defined below). Meaning of “including” and “such as”: When used in this MD&A, the terms “including” and “such as” mean including and such as, without limitation. NOTE TO INVESTORS CONCERNING ESTIMATES OF MINERAL RESERVES AND MINERAL RESOURCES The mineral reserve and mineral resource estimates contained in this MD&A have been prepared in accordance with the Canadian Security Administrators’ (the “CSA”) National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). Effective February 25, 2019, the SEC’s disclosure requirements and policies for mining properties with current industry and global regulatory practices and standards, including NI 43-101. However, Canadian issuers that report in the United States using the Multijurisdictional Disclosure System (“MJDS”), such as the Company, may still use NI 43-101 rather than the SEC’s disclosure requirements when using the SEC’s MJDS registration statement and annual report forms. Accordingly, mineral reserve and mineral resource information contained in this MD&A may not be comparable to similar information disclosed by U.S. companies. Investors are cautioned that while the SEC now recognizes “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources”, investors should not assume that any part or all of the mineral deposits in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. These terms have a great amount of uncertainty as to their economic and legal feasibility. Accordingly, investors are cautioned not to assume that any “measured mineral resources”, “indicated mineral resources”, or “inferred mineral resources” that the Company reports in this MD&A are or will be economically or legally mineable. Further, “inferred mineral resources” have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that any part or all of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian regulations, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in limited circumstances. Investors are cautioned not to assume that any part or all of an inferred mineral resource exists, or is or will ever be economically or legally mineable. The mineral reserve and mineral resource data set out in this MD&A are estimates, and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized. The Company does not include equivalent gold ounces for by-product metals contained in mineral reserves in its calculation of contained ounces and mineral reserves are not reported as a subset of mineral resources. See “Mineral Reserves and Mineral Resources” in the AIF for additional information. NOTE TO INVESTORS CONCERNING CERTAIN MEASURES OF PERFORMANCE This MD&A discloses certain financial performance measures, including “total cash costs per ounce”, “all-in sustaining costs per ounce”, “minesite costs per tonne”, “adjusted net income”, “adjusted net income per share”, “sustaining capital expenditures”, “development capital expenditures”, “operating margin” and “gross (loss) profit” that are not standardized measures under IFRS. These measures may not be comparable to similar measures reported by other gold producers. For a reconciliation of these measures to the most directly comparable financial information presented in the Annual Financial Statements prepared in accordance with IFRS, see Non-GAAP Financial Performance Measures in this MD&A. The total cash costs per ounce of gold produced (also referred to as total cash costs per ounce) 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). The total cash costs per ounce of gold produced is intended to provide information about the cash-generating capabilities of the Company’s mining operations. Total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for by-product revenues, inventory production costs, the impact of purchase price allocation in connection with the Merger to inventory accounting, realized gains and losses on hedges of production costs, operational care and maintenance costs due to COVID-19, production costs associated with retrospective adjustments from the application of the IAS 16 amendments (which, among other things, clarified that pre-commercial revenues and production costs could not be recognized in the cost of property, plant and equipment, but must be recognized in the consolidated statements of income) and other adjustments, which include the costs associated with a 5% in-kind royalty paid in respect of the Canadian Malartic complex, a 2% in-kind royalty paid in respect of the Detour Lake mine, a 1.5% in-kind royalty paid in respect of the Macassa mine, as well as smelting, refining and marketing charges and then dividing by the number of ounces of gold produced. Certain line items such as operational care and maintenance costs due to COVID-19 and realized gains and losses on hedges of production costs were previously classified as “other adjustments” and have now been disclosed separately to provide additional detail about these reconciling items, allowing investors to better understand the impacts of such events on the cash operating costs per ounce and minesite cost per tonne. The total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as the total cash costs per ounce of gold produced on a by-product basis, except that no adjustment is made for by-product metal revenues. 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. Management uses this measure to, and believes it is helpful to investors so they can, understand and monitor the performance of the Company’s mining operations. The Company believes that total cash costs per ounce is useful to help investors understand the costs associated with gold production and the economics of gold mining. 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 and investors to assess a mine’s cash-generating capabilities at various gold prices. Management is aware, and investors should note, 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, and investors should also consider, 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. Investors should note that total cash costs per ounce are not reflective of all cash expenditures as they do not include income tax payments, interest costs or dividend payments. This measure also does not include depreciation or amortization. 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. In this MD&A, unless otherwise indicated, total cash cost per ounce of gold produced is reported on a by-product basis. 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 from gold (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 produce (iv) it is a method used by management and the Board to monitor operations, and (v) many other gold producers disclose similar measures on a by-product rather than a co-product basis. Investors should also consider these measures in conjunction with other data prepared in accordance with IFRS. All-in sustaining costs (“AISC”) per ounce of gold produced (also referred to as all-in sustaining cost per ounce) on a by-product basis is is used to reflect the Company’s total sustaining expenditures of producing and selling an ounce of gold while maintaining the Company’s current operations. AISC per ounce is calculated as the aggregate of total cash costs on a by-product basis, sustaining capital expenditures (including capitalized exploration), general and administrative expenses (including stock options), lease payments related to sustaining assets and reclamation expenses, and then dividing by the number of ounces of gold produced. These additional costs reflect the additional expenditures that are required to be made to maintain current production levels. AISC per ounce of gold produced on a co-product basis is calculated in the same manner as the AISC per ounce of gold produced on a by-product basis, except that the total cash costs on a co-product basis are used, meaning no adjustment is made for by-product metal revenues. Management is aware, and investors should note, that these per ounce measures of performance can be affected by fluctuations in foreign exchange rates and, in the case of AISC of gold produced on a by-product basis, by-product metal prices. Management compensates for this inherent limitations by using these measures in conjunction with minesite costs per tonne as well as other data prepared in accordance with IFRS. The Company believes AISC per ounce is useful to help investors understand the costs associated with producing gold, assessing operating performance and the ability to generate free cashflow and overall value. Investors should note that AISC per ounce is not reflective of all cash expenditures as it does not include income tax payments, interest costs or dividend payments. This measure also does not include depreciation or amortization. In this MD&A, unless otherwise indicated, AISC per ounce of gold produced is reported on a by-product basis. The World Gold Council (“WGC”) is a non-regulatory market development organization for the gold industry. Although the WGC is not a mining industry regulatory organization, it has worked closely with its member companies to develop relevant non-GAAP measures. The Company follows the guidance on all-in sustaining costs released by the WGC in November 2018. Adoption of the all-in sustaining costs per ounce of gold produced measure is voluntary and, notwithstanding the Company’s adoption of the WGC’s guidance, all-in sustaining costs per ounce of gold produced reported by the Company may not be comparable to data reported by other gold producers. The Company believes that this measure provides helpful 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. Minesite costs per tonne are calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for inventory production costs, operational care and maintenance costs due to COVID-19, and other adjustments, and then dividing by tonnage of ore processed (excluding the tonnage processed prior to the achievement of commercial production). As the total cash costs per ounce of gold produced can be affected by fluctuations in by-product metal prices and foreign exchange rates, management believes that minesite costs per tonne is useful measure for investors as it 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, and investors should note, that this per tonne measure of performance can be affected by fluctuations in processing levels. This inherent limitation may be partially mitigated by using this measure in conjunction with production costs prepared in accordance with IFRS. Adjusted net income and adjusted net income per share are calculated by adjusting the net income as recorded in the consolidated statements of income (loss) for the effects of certain non-recurring, unusual and other items that the Company believes are not reflective of the Company’s underlying performance for the reporting period. Adjusted net income is calculated by adjusting net income for foreign currency translation gains or losses, realized and unrealized gains or losses on derivative financial instruments, impairment loss charges and reversals, environmental remediation, severance and transaction costs related to acquisitions, purchase price allocations to inventory, income and mining taxes adjustments as well as other items (which includes changes in estimates of asset retirement obligations at closed sites and gains and losses on the disposal of assets, self-insurance losses, multi-year donations and integration costs). Adjusted net income per share is calculated by dividing adjusted net income by the number of shares outstanding on a basic and diluted basis. The Company believes that these generally accepted industry measures are useful in that they allow for the evaluation of the results of continuing operations and in making comparisons between periods. Adjusted net income and adjusted net income per share are intended to provide investors with information about the Company’s continuing income generating capabilities from its core mining business, excluding the above adjustments, which are not reflective of operational performance. Management uses this measure to, and believes it is helpful to investors so they can, understand and monitor for the operating performance of the Company in conjunction with other data prepared in accordance with IFRS. Operating margin is not a recognized measure under IFRS and this data may not be comparable to data presented by other gold producers. The Company believes that operating margin is a useful measure that reflects the operating performance of its individual mines associated with the ongoing production and sale of gold and by-product metals without allocating company-wide overhead (including exploration and corporate development expenses, amortization of property, plant and mine development, general and administrative expenses, finance costs, gain and losses on derivative financial instruments, environmental remediation costs, foreign currency translation gains and losses, other expenses and income and mining tax expenses). This measure is calculated by deducting production costs from revenue from mining operations. In order to reconcile operating margin to net income as recorded in the consolidated financial statements, the company adds the following items to the operating margin: Income and mining taxes expense; other expenses (income); care and maintenance expenses; foreign currency translation (gain) loss; environmental remediation costs; gain (loss) on derivative financial instruments; finance costs; general and administrative expenses; amortization of property, plant and mine development; exploration and corporate development expenses; and impairment losses (reversals). Management uses this measure internally for planning purposes and to forecast future operating results. The Company believes that operating margin is a useful measure that reflects the operating performance of its individual mines associated with the ongoing production and sale of gold and by-product metals without allocating company-wide overhead (including exploration and corporate development expenses, amortization of property, plant and mine development, general and administrative expenses, finance costs, gains and losses on derivative financial instruments, environmental remediation costs, foreign currency translation gains and losses, care and maintenance expenses, other income and expenses and income and mining tax expenses). This measure is intended to provide investors with additional information about the Company’s underlying operating results and should be evaluated in conjunction with other data prepared in accordance with IFRS. Gross (loss) profit is not a recognized measure under IFRS and this data may not be comparable to data reported by other gold producers. Gross profit is calculated by deducting amortization of property plant and mine development from operating margin. The measure represents the amount of revenues in excess of production costs and amortization of property plant and mine development and is used by management to assess past operational profitability and performance of the mining operations. Management also uses these measures to, and believes it is useful to investors so they can monitor the performance of the Company’s mining operations. Management is aware, and investors should note, that the gross profit measure of performance can be impacted by fluctuations in processing levels, costs of gold produced and metal prices, management compensates for this inherent limitation by using this measure in conjunction with conjunction with minesite costs per tonne as well as other data prepared in accordance with IFRS. Capital expenditures are classified into sustaining capital expenditures and development capital expenditures.Sustaining capital expenditures are expenditures incurred during the production phase to sustain and maintain the existing assets so they can achieve constant expected levels of production. This measure includes expenditures on assets so that they retain their existing productive capacity as well as expenditures that enhance performance and reliability of the operations. Development capital expenditures are expenditures incurred at new projects and expenditures at existing operations that are undertaken with the intention to increase net present value through higher production levels or extensions of mine life above the current plans. Management uses these measures in the capital allocation process and to assess the effectiveness of its investments, management believes these measures are useful so investors can assess the purpose and effectiveness of the capital expenditures split between sustaining and development in each reporting period. Management believes that the distinction between sustaining and development capital expenditures is useful to investors as sustaining capital expenditures are a key component in the calculation of AISC per ounce. While the Company follows the WGC guidance in its classification of capital expenditures into sustaining or development, the classification between sustaining and development capital expenditures does not have a standardized definition in accordance with IFRS and other companies may classify expenditures in a different manner. This MD&A also contains information as to estimated future total cash costs per ounce, AISC per ounce and minesite costs per tonne. The estimates are based upon the total cash costs per ounce, AISC per ounce and minesite costs per tonne that the Company expects to incur to mine gold at its mines and projects and, consistent with the reconciliation of these actual costs referred to above, do not include production costs attributable to accretion expense and other asset retirement costs, which will vary over time as each project is developed and mined. It is therefore not practicable to reconcile these forward-looking non-GAAP financial measures to the most comparable IFRS measure. 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. Pro-forma production costs, pro-forma total cash costs per ounce of gold produced (on both co-product and by-product basis) and pro-forma sustaining capital expenditures are non-GAAP measures that are not standardized financial measures under the financial reporting framework used to prepare the Company’s financial statements. These measures are calculated in the same manner as the similar non-proforma measures described above and incorporate the pre-merger period for the Detour Lake, Macassa and Fosterville mines from the beginning of the year to the closing of the Merger on February 8, 2022, which was included as part of the guidance for the year. Management uses these measures to, and believes it is useful to investors so they can monitor the performance of the company against guidance, as previous guidance provided by the Company was on a full year basis for all mines. Management is aware and investors should note that given the nature of the adjustments and the fact that they pertain to a period before the Company controlled Kirkland certain amounts for the pre-Merger period may not be fully comparable when aggregated, management compensates for this inherent limitation by using this measure in conjunction with the similar non-proforma measures for the period. Executive Summary 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, Australia, Finland and Mexico, with exploration and development activities in Canada, Australia, 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. In 2022, Agnico Eagle recorded production costs per ounce of gold of $843 and total cash costs per ounce of gold produced(i) of $793 on a by-product basis and $825 on a co-product basis on payable production of 3,135,007 ounces of gold. The average realized price(ii) of gold increased by 0.2% from $1,794 per ounce in 2021 to $1,797 per ounce of payable production in 2022. 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. The Company expects that the acquisition of Yamana Gold Inc.’s (“Yamana”) interests in its Canadian assets, including their 50% ownership of the Canadian Malartic complex will be completed in March 2023. The Company’s 2022 results do not include any contribution from assets acquired in the Yamana Transaction (as defined below). Highlights • On February 8, 2022, the Company completed the merger of equals (the “Merger”) with Kirkland Lake Gold Ltd. (“Kirkland”). • Strong operational performance with payable production of 3,135,007 ounces of gold and production costs per ounce of gold of $843 during 2022. • Total cash costs per ounce of gold produced(i) in 2022 of $793 on a by-product basis and $825 on a co-product basis. • All-in sustaining costs per ounce of gold produced(iii) in 2022 of $1,109 on a by-product basis and $1,141 on a co-product basis. • Proven and probable gold reserves totaled 48.7 million ounces at December 31, 2022, a 9.0% increase compared with 44.6 million ounces at December 31, 2021 (the aggregate of Agnico Eagle’s and Kirkland’s pre-merger gold reserves on such date). • As at December 31, 2022, Agnico Eagle had strong liquidity with $668.5 million in cash and cash equivalents and short-term investments along with approximately $1.2 billion in undrawn credit lines. • The Company’s operations are located in mining-friendly regions that the Company believes have low political risk and long-term mining potential. • The Company continues to maintain its investment grade credit rating and believes it has adequate financial flexibility to finance capital requirements at its mines and development projects from operating cash flow, cash and cash equivalents, short-term investments and undrawn credit lines. • In February 2023, the Company declared a quarterly cash dividend of $0.40 per common share. Agnico Eagle has declared a cash dividend every year since 1983. Notes: (i) Total cash costs per ounce of gold produced on both a by-product and co-product basis are non-GAAP measures that are not standardized financial measures under the financial reporting framework used to prepare the Company’s financial statements. For a reconciliation to production costs see “Non-GAAP Financial Performance Measures” below. See also “Note to Investors Concerning Certain Measures of Performance”. (ii) Realized price is a non-GAAP measure that is not a standardized financial measure under the financial reporting framework used to prepare the Company’s financial statements. See “Note to Investors Concerning Certain Measures of Performance”. (iii) All-in sustaining costs per ounce of gold produced is a non-GAAP measure that is not a standardized financial measure under the financial reporting framework used to prepare the Company’s financial statements. For a reconciliation to production costs see “Non-GAAP Financial Performance Measures” below. See also “Note to Investors Concerning Certain Measures of Performance”. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 1 Strategy Agnico Eagle’s ability to consistently execute its business strategy has provided a solid foundation for growth. The Company’s goals are to: • Deliver on performance and growth expectations: Ensure our existing portfolio delivers on expectations, lowers operational risk and generates free cash flow; • Build and maintain a high-quality project pipeline: Ensure we develop a best-in-class project pipeline to replenish reserves and production, while maintaining the quality, manageability and fit of our future portfolio; • Develop our people: Develop and provide growth opportunities for our people and provide the skills infrastructure to support the development of our operations and projects; • Operate in a socially responsible manner: Create value for our shareholders while operating in a safe, socially and environmentally responsible manner, as we contribute to the prosperity of our people, their families and the communities in which we operate. These three pillars – performance, pipeline, people – form the basis of Agnico Eagle’s success and offer it a competitive advantage. By delivering on these pillars, the Company strives to continue to build its production base and generate increased value for shareholders, while operating in a safe, socially and environmentally responsible manner, as we contribute to the prosperity of our people, their families and the communities in which we operate. 2022 Developments Acquisition of the Canadian Assets of Yamana On November 8, 2022, the Company entered into an arrangement agreement with Yamana and Pan American Silver Corp. (“Pan American”) pursuant to which Pan American will acquire all of the issued and outstanding common shares of Yamana and Yamana will sell the subsidiaries and partnerships that hold Yamana’s interests in its Canadian assets to Agnico Eagle, including the remaining 50% of the Canadian Malartic complex (the “Yamana Transaction”). The consideration paid by the Company in the Yamana Transaction will consist of US$1.0 billion in cash and 36,089,907 common shares of Agnico Eagle. On January 31, 2023, Pan American and Yamana shareholders approved the Yamana Transaction at special meetings of their respective shareholders. The Yamana Transaction is expected to close in March 2023, subject to approval from the Mexican Federal Economic Competition Commission and satisfaction or waiver of certain other closing conditions. Following the closing of the Yamana Transaction, the Company will own 100% of the Canadian Malartic complex, a 100% interest in the Wasamac project located in the Abitibi region of Quebec and several other exploration properties located in Ontario and Manitoba. Joint Venture Agreement with Teck Resources Limited (“Teck”) On September 16, 2022 the Company agreed to subscribe to a 50% interest in Minas de San Nicolas, S.A.P.I de C.V (“MSN”), which owns the San Nicolas copper-zinc development project located in Zacatecas, Mexico (the “Transaction”). The Transaction is expected to close in the second quarter of 2023. As a result of the Transaction, the Company and Teck will become 50/50 joint venture partners in MSN. Under the agreement, the Company will subscribe for $580 million of MSN shares, giving it a 50% interest in MSN. The subscription proceeds received from the Company will be used by MSN to fund the first $580 million of post-closing costs with subsequent funding to be contributed according to each partner’s ownership percentage. The Company’s contributions will be made as study and development costs are incurred.The Company’s funding is expected to be approximately $50 million in the first two years following closing. The $580 million share subscription implies a notional $290 million acquisition cost to the Company for 50% of the San Nicolas project plus the contribution by the Company of 50% of the first $580 million of project costs for its own account. For governance purposes, upon closing of the Transaction, the Company is deemed to be a 50% shareholder in MSN. Following closing, all project activities will be carried out by MSN. MSN is advancing an updated feasibility study and preparing to submit the Environmental Impact Assessment in the first half of 2023. Teck and Agnico Eagle are committed to leveraging their complementary skill sets to advance the timely and prudent development of the San Nicolás project. 2 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Normal Course Issuer Bid On April 29, 2022, the Toronto Stock Exchange (the “TSX”) accepted the Company’s notice of intention to establish a normal course issuer bid (“NCIB”). The NCIB commenced on May 4, 2022 and will terminate on May 3, 2023, or such earlier date by which the Company has repurchased the maximum number of common shares authorized to be repurchased under the NCIB or on which the Company otherwise elects to terminate the NCIB. Under the NCIB, the Company is authorized to repurchase for cancellation up to a maximum of 22,785,308 common shares, representing 5% of the 455,706,160 common shares issued and outstanding as of April 28, 2022. However, the Company intends to repurchase a maximum of $500.0 million of its common shares under the NCIB. Purchases under the NCIB may be made through the facilities of the TSX, the New York Stock Exchange or any other eligible alternative Canadian trading system on which the Company’s common shares are traded, in each case, based on the prevailing market price of the Company’s common shares at the time of repurchase or such other price as may be permitted by the TSX, plus applicable brokerage fees. Under TSX rules, a maximum of 341,828 common shares may be repurchased by the Company on any one trading day under the NCIB program, except where repurchases are made in accordance with the “block purchase exception” of the TSX rules. The average daily trading volume for the year ended December 31, 2022 was 4,724,175 common shares. During the year ended December 31, 2022, the Company repurchased for cancellation an aggregate of 1,569,620 common shares at an average price of $44.53 per common share, for an aggregate cost of approximately $69.9 million. Merger with Kirkland Lake Gold Ltd. On February 8, 2022, the Company combined with Kirkland in a merger of equals (the “Merger”) and continued under the name “Agnico Eagle Mines Limited”. Under the Merger, Agnico acquired 100% of the issued and outstanding Kirkland shares. Each Kirkland shareholder received 0.7935 common shares of Agnico for each Kirkland share, which resulted in the issuance of 209,274,263 Agnico common shares. Agnico began consolidating the operating results, cash flows and net assets of Kirkland from February 8, 2022. Kirkland is now a subsidiary of Agnico Eagle. Kirkland was a publicly traded mining company with ownership interests in the Detour Lake and Macassa mines in Ontario, Canada and the Fosterville mine in Australia. Inflationary Cost Environment In 2022, the Company experienced several cost increases as a result of inflation. These included increases to labour, energy and reagent costs. Notable increases in costs included: an increase in the electricity price per megawatt-hour of over 180% year-over-year at the Kittila mine and an increase in the cost of reagents, such as cyanide, of 30% year-over- year. The Company’s expectation for the cost of diesel has also increased over 30% year-over-year. Labour costs, including both internal personnel across all of its operations and contractors, have also seen a year-over-year increase, with the cost of employees increasing approximately 4.5% across the Company’s operations. The Company’s focus will continue to be on increasing operational efficiencies and cost optimization at all mining operations. Procurement synergies, related to the Merger, have partially helped to offset some of the impacts of inflation. Procurement efforts have mostly been focused on Canada where the majority of the Company’s operations are located, however, the Company still looks to obtain further procurement benefits at its operations in other regions. While the Company continues to monitor and maintain the flow of critical inputs and is generally optimistic concerning the continued improvement of global logistics, it has not forecast any significant reduction in input prices for 2023. Portfolio Overview Canada – LaRonde Complex The 100% owned LaRonde Complex in northwestern Quebec, includes the LaRonde mine and the LaRonde Zone 5 mine (“LZ5”). The LaRonde mine is the Company’s oldest operating mine and achieved commercial production in 1988. In 2003, the Company acquired LZ5, which lies adjacent to and west of the LaRonde mine and was an open pit operation under a previous operator. The LZ5 mine achieved commercial production in June 2018 as an underground operation with ore processed at the LaRonde Complex’ processing facilities. Ore is processed at the LaRonde mineral processing plant, which includes copper and zinc flotation circuits as well as precious metals recovery and refining facilities. The processing plant produces doré bars containing gold and silver, as well as zinc and copper concentrates with additional gold and silver. The plant has a daily capacity of 7,000 tonnes of ore and has been expanded four times since it opened in 1988. In addition, a dedicated 2,000-tonnes/day carbon-in-leach processing facility treats ore trucked from the LZ5 mine and refines its concentrates into doré bars. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 3 LaRonde Mine the mine below level 245, achieved commercial production in The LaRonde mine extension, December 2011, and under current mine plans is expected to be in production through 2036. Access to LaRonde’s underground mining operation is through the 2,250-metre-deep Penna Shaft, which was completed in 2000. the portion of The LaRonde mine has gradually been implementing automation for its production activities and is increasingly relying on this technology. The risk of more frequent and larger seismic events has increased as the Company mines deeper at LaRonde. The Company continues to adjust its mining methods, ground support and protocols to address seismic activity in the deeper portions of the mine, refer to the operations outlook section below for additional details. The LaRonde mine’s proven and probable mineral reserves were approximately 2.5 million ounces at December 31, 2022. LaRonde Zone 5 Mine In 2003, the Company acquired the Bousquet property, which adjoins the LaRonde mine to the west and hosts the Bousquet Zone 5 deposit. Commercial production at LZ5 was achieved in June 2018 and, under current mine plans, is expected to be in production through 2032. LZ5 is mined from underground ramp access. The LZ5 mine has gradually been implementing automation for its production activities and is increasingly relying on this technology. The LZ5 mine’s proven and probable mineral reserves were approximately 0.7 million ounces at December 31, 2022. Canada – Canadian Malartic Complex In 2014, Agnico Eagle and Yamana jointly acquired Osisko Mining Corporation, now Canadian Malartic Corporation (“CMC”). As a result, Agnico Eagle and Yamana each own 50% of CMC and Canadian Malartic General Partnership (the “Partnership”), a general partnership which now holds the Canadian Malartic complex in northwestern Quebec. The Canadian Malartic complex is located within the town of Malartic, Quebec, approximately 25 kilometres west of the City of Val-d’Or and 80 kilometres east of City of Rouyn-Noranda. In mid-2020, the Partnership approved the start of construction of surface infrastructure and an underground exploration ramp into the East Gouldie, Odyssey and East Malartic zones, collectively known as the Odyssey project. The Odyssey project was approved for construction in 2021. Under current mine plans, the Company expects the mine will be in production through 2039. Canadian Malartic has historicaly been a large open-pit operation using large-scale excavators and trucks which the Company expects to be mined out in late 2023. Mining at the Odyssey project will be done using underground methods. The mine design at the Odyssey project includes a 1,800 metre deep production-services shaft with an expected capacity of approximately 20,000 tonnes per day. Ore is processed at the Canadian Malartic mineral processing complex, which has a 60,000 tonnes per day nominal throughput capacity. Following the closing of the Yamana Transaction, the Company will own 100% of the Canadian Malartic complex. See “2022 Developments – Acquisition of the Canadian Assets of Yamana” above. Agnico Eagle’s attributable share of proven and probable mineral reserves at December 31, 2022 at the Canadian Malartic Complex were approximately 1.6 million ounces. Canada – Goldex mine The 100% owned Goldex mine is located in the city of Val d’Or in northwestern Quebec, 60 km east of the Company’s LaRonde Complex, and achieved commercial production from the M and E satellite zones in October 2013. The Deep 1 Zone achieved commercial production in July 2017. Production from the Deep 1 Zone is expected to extend Goldex’s mine life through 2031 under current mine plans. Ore from the Goldex mine is treated using a two-stage crushing process, followed by a two-stage grinding circuit that consists of a semi-autogenous grinding mill and a ball mill, and achieved an average of 8,055 tonnes per day in 2022. During the second quarter of 2022, the Company approved the development of the Akasaba West project. The Akasaba West project is located approximately 30 kilometers from the Goldex mine and is expected to contribute approximately 4 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS 1,500 tonnes of ore per day. The Company has completed the main activities to prepare the site for production, such as the removal of overburden and the installation of surface infrastructure. The Goldex mine’s proven and probable mineral reserves were approximately 1.0 million ounces at December 31, 2022. The Akasaba West project’s proven and probable mineral reserves were approximately 0.1 million ounces at December 31, 2022. Canada – Meliadine Mine In 2010, Agnico Eagle acquired its 100% interest in the Meliadine mine project in Nunavut, Canada through its acquisition of Comaplex Minerals Corp. The Meliadine mine is located near the western shore of Hudson Bay in the Kivalliq region of Nunavut, approximately 25 kilometres north of the hamlet of Rankin Inlet and 290 kilometres southeast of the Meadowbank Complex. Commercial production was achieved at the Meliadine mine in May 2019. In 2020, the Company’s Board of Directors (“Board”) approved the Phase 2 expansion at Meliadine which accelerated the development of the Tiriganiaq open pit, where commercial production was achieved in 2021. Under current mine plans, the Meliadine mine is expected to be in production through 2032. Over the course of its operations, mining at Meliadine will be carried out through ten open pits and two underground mining operations. Underground access is by decline, with long-hole mining methods. The mill employs a conventional gold circuit comprising crushing, grinding, gravity separation and cyanide leaching with a carbon-in-leach circuit, followed by cyanide destruction and filtration of the tailings for dry stacking. In 2022, milling rates averaged 4,814 tonnes per day. The Phase 2 mill expansion project, with targeted completion in mid-2024, is expected to increase throughput to 6,000 tonnes per day. Due to the COVID-19 Omicron variant outbreak in December 2021, the mine focused on production and reduced the level of some supporting activities, including underground development, which affected the mining sequence in early 2022. As of mid-January 2022, the mine had returned to normal operating levels. The Meliadine mine’s proven and probable mineral reserves were approximately 3.8 million ounces at December 31, 2022. Canada – Meadowbank Complex In 2007, the Company acquired Cumberland Resources Ltd., which held a 100% interest in the Meadowbank gold project in Nunavut, Canada. Commercial production was achieved at the Meadowbank mine in March 2010. Mining operations at the Meadowbank site ceased in 2019, but the Meadowbank mill and other infrastructure remain active in support of operations at the Amaruq deposit. The 100% owned Amaruq deposit is located approximately 50 kilometres northwest of the Meadowbank mine and was approved for development in 2016. A 64-kilometre road from the Meadowbank site to the Amaruq deposit was completed in August 2017 and it was widened for ore haulage in November 2018. Ore from the Amaruq satellite deposit is hauled to the Meadowbank mill using long haul off-road type trucks. Commercial production was achieved at the Amaruq satellite deposit in September 2019 and at the Amaruq underground deposit in August 2022. Under current mine plans, the Amaruq deposit is expected to be in production through 2026. The Amaruq mining operation uses the existing infrastructure at the Meadowbank mine, including mill, tailings facilities, camp and airstrip. The process design at the Meadowbank mill consists of two-stage crushing, grinding, gravity concentration, cyanide leaching and gold recovery in a carbon-in-pulp circuit with a current capacity of 9,840 tonnes processed per day. Due to the COVID-19 Omicron variant outbreak in December 2021, activities at the Meadowbank Complex were reduced to essential services as of December 22, 2021. Production activities were restarted in mid-January 2022 and gradually ramped-up to normal operating levels into February 2022. The Meadowbank Complex’s proven and probable mineral reserves were approximately 2.2 million ounces at December 31, 2022. Canada – Hope Bay Project On February 2, 2021, Agnico Eagle completed the acquisition of TMAC for consideration of approximately $226.0 million, consisting primarily of cash used to purchase all outstanding shares of TMAC. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 5 With the acquisition of TMAC, the Company acquired a 100% interest in the Hope Bay Property, which is located in the Kitikmeot region of Nunavut. The 80-kilometer long Hope Bay greenstone belt hosts three gold deposits (Doris, Madrid and Boston), with historical mineral reserves and mineral resources and over 90 regional exploration targets. In late September 2021 and again in mid-October 2021, there were a significant number of COVID-19 cases identified at site. As a precautionary measure, the Company decided to suspend mining and milling operations. The Company started to ramp-up exploration and underground activities in mid-November 2021. However, with increasing cases of COVID-19 in December 2021, the Company again reduced all activities at site to essential services only. The Company determined in February 2022 that production activities at the Hope Bay project will be suspended for the remainder of 2022 and 2023 and the Company’s primary focus during this time will be accelerating exploration and the evaluation of larger production scenarios. The Hope Bay project’s proven and probable mineral reserves were approximately 3.4 million ounces at December 31, 2022. Finland – Kittila Mine The 100% owned Kittila mine in northern Finland was added to the Company’s portfolio through the acquisition of Riddarhyttan Resources AB in 2005. The Kittila mine is located in the Lapland region of northern Finland, approximately 900 km north of Helsinki and 150 km north of the Arctic Circle. Construction at the Kittila mine was completed in 2008 and commercial production was achieved in May 2009. Under current mine plans, the Kittila mine is expected to be in production through 2034. In February 2018, the Board approved an expansion to increase throughput rates at Kittila to 2.0 million tonnes per annum (“mtpa”) from the current rate of 1.6 mtpa. This expansion includes the construction of a 1,044-metre deep shaft, a processing plant expansion as well as other infrastructure and service upgrades. The expansion project is expected to increase the efficiency of the mine and maintain or decrease operating costs while providing access to the deeper mining horizons. In addition, the shaft is expected to provide access to the mineral resources located below 1,150 metres depth, where recent exploration programs have shown promising results. Shaft sinking was completed in the third quarter of 2022 and the focus shifted to the installation of the production and service hoists and the completion of the S1000 level. The commissioning of the production hoist is expected to be completed in the first quarter of 2023. The construction of a nitrogen removal plant was completed in the third quarter and commissioned in the fourth quarter of of 2022. Ore is treated by grinding, flotation, pressure oxidation, and carbon-in-leach circuits. Ore is processed in a surface processing plant with a current capacity of 6,000 tonnes per day. In May 2020, the Regional State Administrative Agency of Northern Finland (the “RSAA”) granted Agnico Eagle Finland Oy (“Agnico Finland”) environmental and water permits that allowed Agnico Finland to enlarge its second carbon-in-leach (“CIL2”) tailings storage facility, expand the operations of the Kittila mine to 2.0 Mtpa and build a new discharge waterline. The permits were subsequently appealed to the Vaasa Administrative Court (the “VAC”) by a third party. In July 2022, the appeals were granted, in part, with the result that the permits were returned for reconsideration to the RSAA. In August 2022, Agnico Finland appealed the decisions of the VAC to the Supreme Administrative Court of Finland (the “SAC”) and requested that the SAC restore the permits through an interim decision pending the ultimate result of Agnico Finland’s appeal. On November 1, 2022, the SAC issued an interim decision upholding the initial CIL2 tailings storage facility permit and restoring nitrogen emission levels for the year 2022. The SAC’s interim decision did not restore Agnico Finland’s authorization to expand the mine to 2.0 Mtpa, Agnico Finland expects a final decision from the SAC in late 2023. Until then, Agnico Finland will rely on the current mining permit of 1.6 Mtpa while retaining operational flexibility to reach 2.0 Mtpa volume in the event of a positive final decision by the SAC. Proven and probable mineral reserves at the Kittila mine were approximately 3.7 million ounces at December 31, 2022. Canada – Detour Lake Mine The Detour Lake open pit mine is located in northeastern Ontario, approximately 300 kilometres northeast of Timmins and 185 kilometres by road northeast of Cochrane, within the northernmost portion of the Abitibi Greenstone Belt. The Company acquired its 100% interest in the Detour Lake mine on February 8, 2022 as a result of the Merger and, under current mine plans, it is expected to be in production through 2050. 6 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Conventional truck-shovel open pit mining methods are used to mine the Detour Lake deposit, using large scale equipment. The milling operation uses a conventional crushing, grinding, gravity, cyanidation and carbon-in-pulp processing facility currently operating at approximately 24 million tonnes per year, with growth to 28 million tonnes per year targeted by 2025. The West Detour project is a proposed expansion of the Detour Lake mine. The project is intended to provide additional ore to feed the existing Detour Lake processing plant by developing two satellite open pits and the additional westward expansion of the currently operating open pit. The Detour Lake mine’s proven and probable mineral reserves were approximately 20.7 million ounces at December 31, 2022. Canada – Macassa Mine The 100% owned Macassa mine is located in the historic gold mining region of Kirkland Lake, Ontario. Production at Macassa first commenced in 1933, with the mine being operated continuously until 1999, when operations were suspended due to low gold prices. Production resumed in 2002 with the discovery of the South Mine Complex (“SMC”) in 2005. The SMC is a high-grade zone that resulted in significant grade improvement at the mine and an increase in production levels above historic averages. Macassa was among the first mines globally to introduce battery-electric vehicles in 2012. The Company acquired its interest in the Macassa mine on February 8, 2022 as a result of the Merger and, under current mine plans, it is expected to be in production through 2029. The mine is located in an area with well-developed infrastructure, including a provincial highway, a railway system and a private airport. Macassa is primarily mined from underground shaft access The Company is evaluating the potential to source additional production from near surface deposits at Macassa and the neighbouring Amalgamated Kirkland deposit. Both of these areas are accessible from a shallow ramp at the Macassa mine. In January 2018, plans were announced to sink a new shaft at the Macassa mine. The 21.5-foot diameter, concrete-lined shaft is expected to offer several important benefits to the mine, including: enabling more effective underground exploration to the east of the SMC; improving ventilation and general working conditions in the mine; and supporting higher levels of production and lower unit costs. The new four-compartment shaft will have a total hoisting capacity of 4,000 tonnes per day (ore and waste) and is an important component of the plan to increase production at Macassa with a target to produce approximately 255,000 to 275,000 ounces in 2024. Ore is processed on-site at the Macassa mill which has capacity to process 1,650 tonnes of ore per day. The Macassa mine’s proven and probable mineral reserves were approximately 1.9 million ounces at December 31, 2022. Canada – Kirkland Lake Assets On March 28, 2018, the Company acquired the 50% of the Canadian exploration assets (the “CMC Exploration Assets”) of CMC that it did not previously own, including the Kirkland Lake and Hammond Reef gold projects, resulting in Agnico Eagle’s 100% ownership of the assets. The transaction did not affect the ownership of the Canadian Malartic mine and related assets including Odyssey, East Malartic, Midway and East Amphi properties, which will continue to be jointly owned and operated by the Company and Yamana through CMC and the Partnership until the closing of the Yamana Transaction. Canada – Kirkland Lake Project The Kirkland Lake project is comprised of the Upper Canada and Upper Beaver properties. The Upper Beaver deposit is located approximately 27 km from the Macassa mine. The Upper Canada deposit lies approximately 6 km southwest of the Upper Beaver property, and 1.6 km north of the main Larder Lake-Cadillac Deformation Zone, within a 300- to 400-metre-wide strongly altered deformation corridor. The properties lie within the southern Abitibi Greenstone Belt of the Superior Province of the Canadian Shield, approximately 110 km west of Agnico Eagle’s LaRonde mine. The Upper Beaver deposit’s proven and probable mineral reserves were approximately 1.4 million ounces at December 31, 2022. No proven and probable mineral reserves have been declared at the Upper Canada project. Canada – Hammond Reef Project The 100% owned Hammond Reef property in northwestern Ontario covers approximately 32,070 hectares and is located approximately 260 kilometres west of Thunder Bay. The property is accessible via secondary gravel roads from the town of Atikokan, which is located approximately 30 kilometres to the southwest. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 7 The Hammond Reef deposit is a high tonnage, low grade gold deposit that is primarily hosted in variably sheared and altered granitoid rocks. Gold mineralization is typically associated with fine grained pyrite mineralization that is often associated with fractures, veinlets and veins filled with various combinations of chlorite, calcite and quartz. In January 2020, the Company purchased a 2% NSR royalty on the Hammond Reef project from Kinross Gold Corporation for $12.0 million. The property remains subject to a 2% NSR royalty held by Osisko Royalties. A positive internal technical evaluation at Hammond Reef was completed by the Company in 2020, which resulted in the declaration of the first mineral reserves for the project on December 31, 2020. The Hammond Reef deposit’s proven and probable mineral reserves were approximately 3.3 million ounces at December 31, 2022. Australia – Fosterville Mine The Fosterville mine is located approximately 20 kilometres northeast of the city of Bendigo and 130 kilometres north of the city of Melbourne in Victoria, Australia. Kirkland acquired the Fosterville mine as part of a business combination with Newmarket Gold Inc. in November 2016. The Company acquired its 100% interest in the Fosterville mine on February 8, 2022 as a result of the Merger and, under current mine plans, it is expected to be in production through 2031. The mine is located in an area with well-developed infrastructure and is accessible by paved roads. Access to the underground workings is through two portals, located in the Ellesmere and Falcon open pits Underground mining is conducted using a conventional fleet including jumbo trucks, production drills, loaders, trucks and ancillary equipment. Open cut mining (when required) is conducted using a conventional fleet including excavators and trucks with a contract mining fleet and workforce. Ore is processed at the Fosterville mill which has a capacity of 2,275 tonnes per day. The Fosterville property includes approximately 1,400 sq. km of additional land package with numerous brownfield and greenfield exploration targets that are a key aspect of the Company’s ongoing exploration efforts. The Fosterville mine’s proven and probable mineral reserves were approximately 1.7 million ounces at December 31, 2022. Mexico – Pinos Altos Mine In 2006, the Company completed the acquisition of the Pinos Altos property in northern Mexico, which was then an advanced stage exploration property. Commercial production was achieved at the Pinos Altos mine in November 2009 and, under current mine plans, the mine is expected to be in production through 2028. A shaft sinking project was completed in June 2016 at the Pinos Altos mine and during 2018, the site transitioned into being a predominantly underground mining operation. In 2020, the Company started underground and open pit production at Sinter, located approximately 2 kilometres northwest of the Pinos Altos minesite and depleted the Bravo Pit at Creston Mascota in the third quarter of 2020, with residual gold leaching continuing through 2022. Pre-production activities at the Cubiro deposit continued in the fourth quarter of 2022 and initial production is expected in the second half of 2023. Once production commences, Cubiro is expected to provide additional production flexibility to the Pinos Altos operations. At Reyna de Plata, open pit pre-stripping activities at Pit 1 were completed in the fourth quarter of 2022 and ore production commenced as planned. Ore from the Pinos Altos mine is treated by one of two processes: conventional processing in a mill for higher-grade ore; and heap-leaching for lower grade ore. The conventional, 5,500-tonnes/day processing plant includes circuits for crushing, grinding, gravity concentration and agitated leaching followed by counter-current decantation. The Pinos Altos mine’s proven and probable mineral reserves (including satellite deposits) were approximately 0.7 million ounces at December 31, 2022. Mexico – La India Mine Agnico Eagle acquired 100% of Grayd Resource Corporation (“Grayd”) in January 2012, which owned the La India project, which is located approximately 70 kilometres northwest of the Pinos Altos mine and approximately 200 km east of Hermosillo in Sonora, northern Mexico. Commercial production was achieved in February 2014 and, under current mine plans, the La India mine is expected to be in production through 2024. The La India mine is a collection of deposits grouped into three open pits – North, La India (Central) and Main – that provide ore for a heap leach pad located just west of the North pit. Operations use traditional open pit mining techniques. 8 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS In 2022, ore production transitioned from the depleted Main Zone pit to the La India and the El Realito pits, resulting in higher gold grades and a higher stripping ratio. La India’s processing flow includes a three-stage crushing process followed by a heap leach operation. The plant is designed to process leach flows from up to 16,438 tonnes per day. The La India mine’s proven and probable mineral reserves (including satellite deposits) were approximately 0.1 million ounces at December 31, 2022. Key Performance Drivers The key drivers of financial performance for Agnico Eagle until the year-ended December 31, 2022 include: • the spot price of gold, silver, zinc and copper; • production volumes; • production costs; and • US dollar/Canadian dollar, US dollar/Australian dollar, US dollar/Euro exchange rates and US dollar/Mexican peso exchange rates Details on future drivers of financial performance are discussed in the Outlook section of this MD&A. Spot Price of Gold, Silver, Zinc and Copper GOLD ($ per ounce) High price Low price Average market price Average realized price 2022 $2,039 $1,629 $1,800 $1,797 2021 % Change $1,943 $1,684 $1,799 $1,794 4.9% (3.3)% 0.1% 0.2% In 2022, the average market price per ounce of gold was 0.1% higher than in 2021. The Company’s average realized price per ounce of gold in 2022 was 0.2% higher than in 2021. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 9 SILVER ($ per ounce) High price Low price Average market price Average realized price 2022 $26.18 $17.77 $21.73 $21.63 2021 % Change $29.59 $21.53 $25.14 $25.07 (11.5)% (17.5)% (13.6)% (13.7)% In 2022, the average market price per ounce of silver was 13.6% lower than in 2021. The Company’s average realized price per ounce of silver in 2022 was 13.7% lower than in 2021. ZINC ($ per tonne) COPPER ($ per tonne) Agnico Eagle’s average realized price year-over-year for zinc increased by 16.7% and the average realized price year-over- year for copper decreased by 13.8%. By-product metals are mainly produced by the LaRonde mine (silver, zinc and copper) and the Pinos Altos mine (silver). Net by-product (primarily silver, zinc and copper) revenue is treated as a reduction of production costs in calculating total cash costs per ounce of gold produced on a by-product basis and all-in sustaining costs per ounce of gold produced on a by-product basis. Production Volumes and Costs Changes in production volumes have a direct impact on the Company’s financial results. Total payable production of gold was 3,135,007 ounces in 2022, an increase of 50.3% compared with 2,086,405 ounces in 2021. The increase was primarily due to the contribution of production volumes from the Detour Lake, Fosterville and Macassa mines following the Merger and the ramp-up of production at the Amaruq deposit. Partially offsetting the overall increase in gold production was a decrease in gold production at the Hope Bay project following the decision to dedicate the site infrastructure to exploration activities, and lower production at Pinos Altos and Kittila mines as a result of lower mill throughput. Production costs are discussed in detail in the Results of Operations section below. Foreign Exchange Rates (Ratio to US$) The exchange rate of the Canadian dollar, Australian dollar, Euro and Mexican peso relative to the US dollar is an important financial driver for the Company for the following reasons: 10 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS • all revenues are earned in US dollars; • a significant portion of operating costs at the LaRonde, Canadian Malartic and Meadowbank complexes, Detour Lake, Macassa, Meliadine and Goldex mines are incurred in Canadian dollars; • a significant portion of operating costs at the Fosterville mine are incurred in Australian dollars; • a significant portion of operating costs at the Kittila mine are incurred in Euros, and • a significant portion of operating costs at the Pinos Altos and La India mines are incurred in Mexican pesos. The Company mitigates part of its foreign currency exposure by using currency hedging strategies. CANADIAN DOLLAR AUSTRALIAN DOLLAR MEXICAN PESO EURO On average, the Canadian dollar, Australian dollar and Euro weakened relative to the US dollar in 2022 compared to 2021 decreasing costs denominated in local currency when translated to US dollars for reporting purposes, while the Mexican Peso strengthened relative to the US dollar in 2022 compared with 2021, increasing costs denominated in the local currency when translated into US dollars for reporting purposes. Results of Operations Agnico Eagle reported net income of $670.2 million, or $1.53 per share, in 2022 compared with net income of $561.9 million, or $2.31 per share, in 2021 and net income of $511.6 million, or $2.12 per share in 2020. Agnico Eagle reported adjusted net income(i) of $1,003.6 million, or $2.29 per share(i), in 2022 compared with adjusted net income of $608.0 million, or $2.49 per share, in 2021 and adjusted net income of $451.6 million, or $1.87 per share in 2020. In 2022, operating margin(ii) increased to $3,097.8 million from $2,096.5 million in 2021. In 2020, operating margin was $1,714.0 million. Revenues from Mining Operations Revenues from mining operations increased by $1,871.5 million, or 48.4%, to $5,741.2 million in 2022 from $3,869.6 million in 2021 primarily due to a 51.3% increase in the sales volume of gold(iii) mainly due to the contribution Notes: (i) Adjusted net income and adjusted net income per share are non-GAAP measures that are not standardized financial measures under the financial reporting framework used to prepare the Company’s financial statements. For a reconciliation to net income and net income per share see “Non-GAAP Financial Performance Measures” below. See also “Note to Investors Concerning Certain Measures of Performance”. (ii) Operating margin is a non-GAAP measure that is not a standardized financial measure under the financial reporting framework used to prepare the Company’s financial statements. For a reconciliation to net income see “Non-GAAP Financial Performance Measures” below. See also “Note to Investors Concerning Certain Measures of Performance”. (iii) Excluding ounces from pre-commercial production for the years ended December 31, 2021 and 2020. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 11 of gold sales from the Detour Lake, Fosterville and Macassa mines following the Merger, partially offset by lower sales volume from the Hope Bay project, LaRonde and Canadian Malartic complexes and Pinos Altos mine. Revenues from mining operations were $3,138.1 million in 2020. Sales of precious metals (gold and silver) accounted for 99.5% of revenues from mining operations in 2022, an increase from 99% in 2021. The increase is attributed to the contribution of gold and silver sales from the Detour Lake, Fosterville and Macassa mines following the Merger. Sales of precious metals (gold and silver) accounted for 99.5% of revenues in 2020. The table below sets out revenues from mining operations, production volumes and sales volumes by metal: Revenues from mining operations: Gold Silver Zinc Copper 2022 2021 2020 (thousands of United States dollars) $5,656,201 $3,760,821 $3,047,344 55,212 9,390 20,359 69,694 16,304 22,806 74,025 1,970 14,774 Total revenues from mining operations $5,741,162 $3,869,625 $3,138,113 Payable production: Gold (ounces) Silver (thousands of ounces) Zinc (tonnes) Copper (tonnes) Payable metal sold: Gold (ounces) Silver (thousands of ounces) Zinc (tonnes) Copper (tonnes) 3,135,007 2,086,405 1,736,568 2,292 8,195 2,901 2,607 8,837 2,955 3,365 6,259 3,069 3,148,593 2,080,631 1,724,538 2,354 6,727 2,916 2,609 10,803 2,973 3,481 5,010 3,062 Revenues from gold increased by $1,895.4 million or 50.4% in 2022 compared with 2021 primarily due to a 51.3% increase in the sales volume of gold(i) primarily from the contribution of gold sales from the Detour Lake, Fosterville and Macassa mines following the Merger. The Company’s average realized price of gold increased slightly to $1,797 in 2022 compared to $1,794 in 2021, and the sales volume of gold increased to 3,135,007 ounces in 2022 compared to 2,086,405(i) ounces in 2021. Revenues from silver decreased by $14.5 million or 20.8% in 2022 compared with 2021 primarily due to a 13.7% decrease in the average realized price of silver and a 9.8% decrease in the sales volume of silver between periods. Revenues from zinc decreased by $6.9 million or 42.4% in 2022 compared with 2021 primarily due to a 37.7% decrease in the sales volume of zinc between periods. Revenues from copper decreased by $2.4 million or 10.7% in 2022 compared with 2021 primarily due to a 13.8% decrease in the average realized price of copper between periods. Note: (i) Excluding ounces from pre-commercial production for the years ended December 31, 2021 and 2020. 12 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Production Costs Production costs increased to $2,643.3 million in 2022 compared with $1,773.1 million in 2021 primarily due to the contribution of production costs from the Detour Lake, Fosterville and Macassa mines following the Merger, higher logistics costs at the Nunavut mines and the rehandling costs resulting from consumption of stockpiles and timing of inventory sales at the Kittila mine. Partially offsetting the overall increase in production costs was the ceasing of production activities at the Hope Bay project to focus on exploration activities. Production costs were $1,424.2 million in 2020. The table below sets out production costs by mine: LaRonde mine LaRonde Zone 5 mine LaRonde complex Canadian Malartic complex (attributable 50%) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Total production costs 2022 2021 2020 (thousands of United States dollars) $ 213,393 $ 232,392 $ 169,824 72,096 285,489 235,735 103,830 318,141 442,681 – 210,661 489,703 129,774 204,649 144,489 1,943 76,226 56,380 288,772 242,589 96,181 250,822 408,863 83,118 192,742 – – – 47,899 217,723 195,312 82,654 245,700 284,976 – 169,884 – – – 141,488 124,678 8,165 60,381 35,088 68,137 $2,643,321 $1,773,121 $1,424,152 Production costs at the LaRonde mine were $213.4 million in 2022, a 8.2% decrease compared with 2021 production costs of $232.4 million. The decrease was primarily due to the timing of inventory sales and the weakening of the Canadian dollar relative to the US dollar between periods. During 2022, the LaRonde mine processed an average of 4,575 tonnes of ore per day compared with 5,033 tonnes of ore per day during 2021. Production costs per tonne increased to C$166 in 2022 compared with C$159 in 2021 primarily due to fewer tonnes processed resulting from lower development rates in the underground mine from increased supplemental ground support requirements at the East mine and revised seismic protocols, partially offset by the timing of inventory sales. Minesite costs per tonne(i) increased to C$162 in 2022 compared with C$140 in 2021 primarily due to such lower throughput. Production costs at the LZ5 mine were $72.1 million in 2022, a 27.9% increase compared with $56.4 million in 2021 primarily due to higher underground mining and milling costs partially offset by the weakening of the Canadian dollar relative to the US dollar between periods. During 2022, the LZ5 mine processed an average of 3,140 tonnes of ore per day compared with 3,079 tonnes of ore per day during 2021. Production costs per tonne increased to C$82 in 2022 compared with C$63 in 2021 primarily due to higher production costs as noted above. Minesite costs per tonne increased to C$81 in 2022 compared with C$65 in 2021 primarily due to higher production costs. Note: (i) Minesite cost per tonne is a non-GAAP measures that is not a standardized financial measure under the financial reporting framework used to prepare the Company’s financial statements. For a reconciliation to production costs see “Non-GAAP Financial Performance Measures” below. See also “Note to Investors Concerning Certain Measures of Performance”. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 13 Attributable production costs at the Canadian Malartic complex were $235.7 million in 2022, a 2.8% decrease compared with 2021 production costs of $242.6 million, primarily due to lower milling costs from the planned reduction in mill throughput levels in an effort to optimize the production profile and cash flows during the transition to the underground Odyssey project and the weakening of the Canadian dollar relative to the US dollar between periods. During 2022, the Canadian Malartic complex processed an average of 53,534 tonnes of ore per day on a 100% basis compared with 60,986 tonnes of ore per day in 2021. Production costs per tonne and minesite costs per tonne increased to C$31 in 2022 compared with C$28 in 2021, primarily due to such lower throughput, partially offset by lower production costs. Minesite costs per tonne increased to C$35 in 2022 compared with C$28 in 2021 primarily due to the factors noted above. Production costs at the Goldex mine were $103.8 million in 2022, a 8.0% increase compared with $96.2 million in 2021 primarily due to higher underground mining and milling costs, partially offset by the weakening of the Canadian dollar relative to the US dollar between periods. During 2022, the Goldex mine processed an average of 8,055 tonnes of ore per day compared with 7,874 tonnes of ore per day during 2021. Production costs per tonne increased to C$46 in 2022 compared to C$42 in 2021 primarily due to higher production costs, partially offset by higher throughput. Minesite cost per tonne increased to C$47 in 2022 compared with C$42 in 2021 primarily due to higher production costs as noted above. Production costs at the Meliadine mine were $318.1 million in 2022, a 26.8% increase compared with 2021 production costs of $250.8 million primarily due to higher mining and logistics costs and the timing of inventory sales, partially offset by an increase in capitalized deferred stripping costs and the weakening of the Canadian dollar relative to the US dollar between periods. During 2022, the Meliadine mine processed an average of 4,814 tonnes per day compared with 4,698 tonnes of ore per day during 2021. The increase in throughput was primarily due to the impact of the COVID-19 Omicron variant outbreak in December 2021. Production costs per tonne increased to C$232 in 2022 compared with C$210 in 2021, primarily due to higher production costs. Minesite costs per tonne increased to C$234 in 2022 compared with C$206 in 2021 primarily due to the factors noted above. Production costs at the Meadowbank Complex were $442.7 million in 2022, a 8.3% increase compared with 2021 production costs of $408.9 million, primarily due to an increase in logistics and mining costs, partially offset by an increase in capitalized deferred stripping costs, timing of inventory sales and the weakening of the Canadian dollar relative to the US dollar between periods. During 2022, the Meadowbank Complex processed an average of 10,244 tonnes of ore per day compared with 9,782 tonnes of ore per day during 2021. The increase in throughput was primarily due to the impact of the COVID-19 Omicron variant outbreak in December 2021, which resulted in a suspension of mining operations. Production costs per tonne increased to C$154 in 2022 compared with C$145 in 2021, due to higher production costs, partially offset by an increase in throughput. Minesite costs per tonne increased to C$157 in 2022 compared with C$143 in 2021 primarily due to the factors noted above. The Company completed the acquisition of TMAC Resources Inc. on February 2, 2021. In September and October of 2021, there were a significant number of COVID-19 cases identified at the Hope Bay project. As a precautionary measure, the Company decided to suspend mining and milling operations. The Company started to ramp-up exploration and underground activities in mid-November 2021, however, with increasing cases of COVID-19 in December 2021, the Company again reduced all activities at site to essential services only. In 2022 and 2023, production activities will remain suspended and the primary focus will be on accelerating exploration and the evaluation of potentially larger production scenarios. Production costs at the Kittila mine were $210.7 million in 2022, a 9.3% increase compared with 2021 production costs of $192.7 million, primarily due to higher milling costs and the timing of inventory sales, partially offset by the weakening of the Euro relative to the US dollar between periods and lower mining costs. During 2022, the Kittila mine processed an average of 5,274 tonnes of ore per day compared with 5,622 tonnes of ore per day during 2021. Production costs per tonne increased to €103 in 2022 compared with €80 in 2021 due to higher processing costs and lower throughput between periods. Minesite costs per tonne increased to €101 in 2022 compared with €82 in 2021 due to the factors noted above. Production costs at the Detour Lake mine were $489.7 million in 2022. During 2022, the Detour Lake mine processed an average of 69,667 tonnes of ore per day. Production costs per tonne were C$28 and minesite costs per tonne were C$25 in 2022. The Company acquired the Detour Lake mine on February 8, 2022 as a result of the Merger. Production costs at the Macassa mine were $129.8 million in 2022. During 2022, the Macassa mine processed an average of 856 tonnes of ore per day. Production costs per tonne were C$602 and minesite costs per tonne were C$577 in 2022. The Company acquired the Detour Lake mine on February 8, 2022 as a result of the Merger. 14 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Production costs at the Fosterville mine were $204.6 million in 2022. During 2022, the Fosterville mine processed an average of 1,602 tonnes of ore per day. Production costs per tonne were A$561 and minesite costs per tonne were A$356 in 2022. The Company acquired the Detour Lake mine on February 8, 2022 as a result of the Merger. Production costs at the Pinos Altos mine were $144.5 million in 2022, a 2.1% increase compared with 2021 production costs of $141.5 million, primarily due to the timing of inventory sales and the strengthening of the Mexican Peso relative to the US dollar between periods. During 2022, the Pinos Altos mine processed an average of 4,137 tonnes of ore per day compared with 5,205 tonnes of ore per day during 2021. The decrease in throughput is primarily due to lower underground productivity as a result of higher rehabilitation requirements in the Santo Nino and Cerro Colorado zones. Production costs per tonne increased to $96 in 2022 compared with $75 in 2021, primarily due to the lower throughput. Minesite costs per tonne increased to $94 in 2022 compared to $75 in 2021 due to the factors noted above. Production costs at the Creston Mascota mine were $1.9 million in 2022, a 76.2% decrease compared with 2021 production costs of $8.2 million. The Company ceased mining operations at the open pit in the third quarter of 2020. Gold production during 2022 and 2021 was the result of residual leaching. No ore was stacked on the heap leach and therefore no production costs per tonne or minesite costs per tonne were reported in 2022 and 2021. Production costs at the La India mine were $76.2 million in 2022, a 26.2% increase compared with 2021 production costs of $60.4 million primarily due to higher heap leach production costs and the strengthening of the Mexican peso relative to the US dollar between periods as well as the impact of the reduced irrigation issues in 2021. During 2022, the La India mine stacked approximately 5.1 million tonnes of ore on the leach pad compared with approximately 6.0 million tonnes of ore stacked in 2021. The decrease in tonnage of ore stacked was primarily due to heavy rains in 2022 that reduced the mine productivity. Production costs per tonne and minesite costs per tonne increased to $15 in 2022 compared with $10 in 2021 primarily due to a decrease in tonnes of ore stacked on the heap leach pad. Minesite costs per tonne increased to $16 in 2022 compared with $10 in 2021 primarily due to the factors noted above. Total Production Costs by Category 2022 Total production costs per ounce of gold produced, representing the weighted average of all of the Company’s producing mines, decreased to $843 in 2022 compared with $861 in 2021 and $838 in 2020. Total cash costs per ounce of gold produced on a by-product basis increased to $793 in 2022 compared with $770 in 2021. Total cash costs per ounce of gold produced on a by-product basis was $775 in 2020. Total cash costs per ounce of gold produced on a co-product basis decreased to $825 in 2022 compared with $829 in 2021. Total cash costs per ounce of gold produced on a co-product basis was $838 in 2020. Set out below is an analysis of the change in production costs per ounce and total cash costs per ounce at each of the Company’s mining operations, with the exception of the Hope Bay project where there was no production in 2022, following a decision to dedicate the site infrastructure to exploration activities. • At the LaRonde mine, total production costs per ounce of gold produced decreased to $749 in 2022 compared with $752 in 2021 primarily due to the timing of inventory sales and the weakening of the Canadian dollar relative to the US dollar between periods, partially offset by a 7.8% decrease in gold production and higher milling costs. Total cash costs per ounce of gold produced on a by-product basis increased to $623 in 2022 compared with $476 in 2021 primarily due to the factors noted above combined with lower by-product revenues. Total cash costs per ounce of gold produced on a co-product basis increased to $850 in 2022 compared with $717 in 2021 primarily due to the negative impact from realized losses on hedges of production costs. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 15 • At the LZ5 mine, total production costs per ounce of gold produced increased to $1,008 in 2022 compared with $796 in 2021, primarily due to higher mining and milling costs and the timing of inventory sales, partially offset by the weakening of the Canadian dollar relative to the US dollar between periods. Total cash costs per ounce of gold produced on a by-product basis increased to $1,021 in 2022 compared with $790 in 2021 due to the factors noted above and the negative impact from realized losses on hedges of production costs. Total cash costs per ounce of gold produced on a co-product basis increased to $1,025 in 2022 compared with $794 in 2021 due to the factors noted above. • At the Canadian Malartic complex, total production costs per ounce of gold produced increased to $716 in 2022 compared with $679 in 2021 primarily due to a 7.8% decrease in gold production and rehandling costs related to the processing of stockpiles, partially offset by the weakening of the Canadian dollar relative to the US dollar between periods. Total cash costs per ounce of gold produced on a by-product basis increased to $787 in 2022 compared with $663 in 2021 due to the factors noted above. Total cash costs per ounce of gold produced on a co-product basis increased to $803 in 2022 compared with $684 in 2021 due to the factors noted above. • At the Goldex mine, total production costs per ounce of gold produced increased to $734 in 2022 compared with $717 in 2021, primarily due to higher underground production costs, higher milling and maintenance costs, partially offset by the weakening of the Canadian dollar relative to the US dollar between periods and a 5.6% increase in gold production. Total cash costs per ounce of gold produced on a by-product basis and co-product basis increased to $765 in 2022 compared with $684 in 2021 due to the factors noted above and the negative impact from realized losses on hedges of production costs. • At the Meliadine mine, total production costs per ounce of gold produced increased to $853 in 2022 compared with $682 in 2021 primarily due to higher open pit mining costs, higher logistics costs and a reduced volume of stockpile build-up when compared to 2021, partially offset by the weakening of the Canadian dollar relative to the US dollar between periods. Total cash costs per ounce of gold produced on a by-product basis increased to $863 in 2021 compared with $634 in 2021 due to the factors noted above and the negative impact from the realized losses on hedges of production costs. Total cash costs per ounce of gold produced on a co-product basis increased to $865 in 2021 compared with $637 in 2021 due to the factors noted above. • At the Meadowbank Complex, total production costs per ounce of gold produced decreased to $1,184 in 2022 compared with $1,266 in 2021 primarily due to a 15.8% increase in gold production, the timing of inventory sales and by the weakening of the Canadian dollar relative to the US dollar between periods, partially offset by an increase in logistics and underground mining costs. Total cash costs per ounce of gold produced on a by-product basis increased to $1,210 in 2022 compared with $1,201 in 2021 due to negative impact from the realized losses on hedges of production costs. Total cash costs per ounce of gold produced on a co-product basis increased to $1,216 in 2022 compared with $1,209 in 2021 due to the factors noted above. • At the Kittila mine, total production costs per ounce of gold produced increased to $971 in 2022 compared with $806 in 2021 primarily due to a 9.3% decrease in gold production, partially offset by the weakening of the Euro relative to the US dollar between periods. Total cash costs per ounce of gold produced on a by-product basis increased to $980 in 2022 compared with $835 in 2021 primarily due to lower gold production, the timing of inventory and the negative impact from realized losses on hedges of production costs. Total cash costs per ounce of gold produced on a co-product basis increased to $981 in 2022 compared with $836 in 2021 due to the factors noted above. • At the Detour Lake mine, during the period from closing of the Merger to December 31, 2022, total production costs per ounce of gold produced were $752, total cash costs per ounce of gold produced on a by-product basis were $657 and total cash costs per ounce of gold produced on a co-product basis were $663. The Merger was completed on February 8, 2022 and as a result there is no comparable period. • At the Macassa mine, during the period from closing of the Merger to December 31, 2022, total production costs per ounce of gold produced were $718, total cash costs per ounce of gold produced on a by-product basis were $683 and total cash costs per ounce of gold produced on a co-product basis were $684. The Merger was completed on February 8, 2022 and as a result there is no comparable period. • At the Fosterville mine, during the period from closing of the Merger to December 31, 2022, total production costs per ounce of gold produced were $605, total cash costs per ounce of gold produced on a by-product basis were $378 and total cash costs per ounce of gold produced on a co-product basis were $379. The Merger was completed on February 8, 2022 and as a result there is no comparable period. 16 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS • At the Pinos Altos mine, total production costs per ounce of gold produced increased to $1,497 in 2022 compared with $1,115 in 2021 primarily due to a 24.0% decrease in gold production, an increase in underground mining costs and by the strengthening of the Mexican peso relative to the US dollar, partially offset by lower milling costs. Total cash costs per ounce of gold produced on a by-product basis increased to $1,249 in 2022 compared with $858 in 2021 primarily due to the factors noted above and lower by-product revenues. Total cash costs per ounce of gold produced on a co-product basis increased to $1,477 in 2022 compared with $1,110 in 2021 due to the factors noted above (with the exception of the lower by-product revenues). • At the Creston Mascota mine, total production costs per ounce of gold produced increased to $739 in 2022 compared with $638 in 2021, primarily due to lower gold production. Total cash costs per ounce of gold produced on a by-product basis increased to $793 in 2022 compared with $408 in 2021 due to the factor noted above and lower by-product revenues. Total cash costs per ounce of gold produced on a co-product basis increased to $853 in 2022 compared with $636 in 2021 due to the factor noted above (with the exception of the lower by-product revenues). • At the La India mine, total production costs per ounce of gold produced increased to $1,021 in 2022 compared with $950 in 2021 primarily due to higher heap leach costs and the strengthening of the Mexican peso relative to the US dollar, partially offset by the 17.5% increase in gold production and the timing of inventory sales. The increase in gold production is primarily due to reduced irrigation of the heap leach due to low local water levels and lower gold grades in 2021. Total cash costs per ounce of gold produced on a by-product basis increased to $1,056 in 2022 compared with $939 in 2021 due to the factors noted above. Total cash costs per ounce of gold produced on a co-product basis increased to $1,078 in 2022 compared with $959 in 2021 due to the factors noted above. Exploration and Corporate Development Expense Exploration and corporate development expense increased by 77.8% to $271.1 million in 2022 from $152.5 million in 2021. Exploration and corporate development expense was $113.5 million in 2020. A summary of the Company’s significant 2022 exploration and corporate development activities is set out below: • Exploration expenses at various mine sites increased by 84.5% to 63.1 million in 2022 compared with $34.2 million in 2021 primarily due to the contribution of expensed exploration drilling at the Detour Lake, Fosterville and Macassa mines following the Merger and higher expensed exploration drilling at the Meadowbank Complex and Meliadine mine. • Exploration expenses in Canada increased by 115.4% to $107.3 million in 2022 compared with $49.8 million in 2021 primarily due to the contribution of expensed exploration drilling following the Merger and higher expensed exploration drilling at the Hope Bay and Amalgamated Kirkland. • Exploration expenses in Latin America decreased by 5.7% to $24.1 million in 2022 compared with $25.6 million in 2021 primarily due to reduced exploration at the Chipriona and Morelos Sur projects in Mexico, partially offset by increased exploration at the Santa Gertrudis project in Mexico. • Exploration expenses in the United States decreased by 22.8% to $5.8 million in 2022 compared with $7.5 million in 2021 primarily due to reduced exploration at the Helm Bay project, partially offset by an increase in exploration at the Gryphon Gold project. • Exploration expenses in Europe increased by 27.4% to $9.9 million in 2022 compared with $7.8 million in 2021 primarily due to increased regional exploration expenses around the proximity of the Kittila mine. • Corporate development and project evaluation expenses increased by 105.3% to $56.6 million in 2022 compared with $27.6 million in 2021 primarily due to increased project evaluation expenses at Canadian Malartic, Upper Beaver and Hope Bay projects in Canada. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 17 The table below sets out exploration expense by region and total corporate development expense: Minesites Canada Latin America United States Europe Australia Corporate development and project evaluation expenses Total exploration and corporate development expense Amortization of Property, Plant and Mine Development 2022 2021 2020 (thousands of United States dollars) $ 63,066 $ 34,188 $ 10,203 107,305 24,147 5,807 9,939 4,212 49,819 25,600 7,518 7,801 – 46,475 20,350 5,142 5,855 – 56,641 27,588 25,467 $271,117 $152,514 $113,492 Amortization of property, plant and mine development expense increased to $1,094.7 million in 2022 compared with $738.1 million in 2021 and $631.1 million in 2020. The increase in amortization of property, plant and mine development between 2022 and 2021 was primarily due to the contribution to amortization from the Detour Lake, Fosterville and Macassa mines following the Merger. General and Administrative Expense General and administrative expenses increased to $220.9 million in 2022 compared with $142.0 million in 2021 and $116.3 million in 2020. The increase in general and administrative expenses between 2022 and 2021 was driven by increased compensation and benefits expenses as a result of the Merger. The increase in general and administrative expenses between 2021 and 2020 was driven by increased compensation and benefits expenses and donations between periods. Finance Costs Finance costs decreased to $82.9 million in 2022 compared with $92.0 million in 2021 and $95.1 million in 2020. The decrease between 2022 and 2021 was primarily due to decreased interest expense on the Company’s guaranteed senior unsecured notes (the “Notes”) as $125.0 million of the 2010 Series C Notes were repaid in April 2022 and $100.0 million of the 2012 Series A Notes were repaid in July 2022, partially offset by higher accretion on reclamation provisions due to higher interest rates in 2022. The decrease between 2021 and 2020 was primarily due to decreased interest expense on the Notes and a decrease in utilization of the Credit Facility between periods. The aggregate outstanding principal of the Notes was $1,350.0 million at December 31, 2022 and $1,575.0 million at December 31, 2021. 18 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS The table below sets out the components of finance costs: Interest on Notes Stand-by fees on credit facilities Amortization of credit facilities, financing and note issuance costs Interest on Credit Facility Accretion expense on reclamation provisions Other interest and penalties, including interest on lease obligations Interest capitalized to assets under construction Total finance costs 2022 2021 2020 (thousands of United States dollars) $64,481 $72,795 $77,739 3,859 3,042 536 15,951 (1,290) (3,644) 5,546 3,778 1,549 6,554 5,329 5,107 3,594 5,304 3,502 2,684 (3,509) (2,796) $82,935 $92,042 $95,134 See Note 14 in the consolidated annual financial statements for details on the Company’s $1.2 billion unsecured revolving bank credit facility (the “Credit Facility”) and Notes referenced above. Derivative Financial Instruments Loss on derivative financial instruments increased to $90.7 million in 2022 compared to a loss of $11.1 million in 2021 and a gain of $107.9 million in 2020. The change between 2022 and 2021 was primarily due to increases in realized losses on foreign exchange and fuel hedges of $70.0 million and unrealized losses on foreign exchange and fuel hedges of $15.2 million, partially offset by a decrease in unrealized loss on warrants of $6.9 million between periods.The Company holds warrants to acquire equity securities of certain issuers in the mining industry. Impairment loss As at December 31, 2022, the Company completed its goodwill impairment test and its review of indicators of potential impairment of the Company’s cash generating units (“CGUs”). The Company identified indicators of potential impairment for the Company’s La India mine. As a result of the identification of these indicators, the Company estimated the recoverable amount of this CGU and concluded that the carrying amounts exceeded its recoverable amount. The Company recorded an impairment of $55.0 million ($52.7 million net of tax) at the La India mine. As at December 31, 2021 and December 31, 2020, the Company completed its review of indicators of potential impairment and no indicators of impairment were identified. Management’s estimates of recoverable amounts are subject to risk and uncertainties. Therefore, it is reasonably possible that changes could occur which may affect the recoverability of the Company’s long-lived assets and goodwill. This may have a material effect on the Company’s future financial results. See Note 24 in the annual consolidated financial statements for further details on impairment losses. Foreign Currency Translation (Gain) Loss The Company’s operating results and cash flow are significantly affected by changes in the exchange rate between the US dollar and each of the Canadian dollar, Australian dollar, Euro and Mexican peso as all of the Company’s revenues are earned in US dollars while a significant portion of its operating and capital costs are incurred in such other currencies. During the period from January 1, 2022 through December 31, 2022, the daily US dollar closing exchange rate per US$1.00 fluctuated between C$1.25 and C$1.39 as reported by the Bank of Canada, A$1.32 and A$1.61 as reported by the Reserve Bank of Australia, €0.87 and €1.05 as reported by the European Central Bank and 19.14 and 21.38 Mexican pesos as reported by the Central Bank of Mexico. A foreign currency translation gain of $16.1 million was recorded in 2022 compared with a $5.7 million loss in 2021 and a $22.5 million loss in 2020. On average, the US dollar strengthened relative to the Canadian dollar, the Australian dollar and the Euro and weakened relative to the Mexican peso in 2022 compared with 2021. As at December 31, 2022, the MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 19 US dollar strengthened relative to the Canadian dollar, Australian dollar and Euro and weakened relative to the Mexican peso, as compared to December 31, 2021. The net foreign currency translation gain in 2022 was primarily due to the translation impact of the Company’s net monetary liabilities denominated in Canadian dollars, Australian dollars and Euros. Other Expenses Other expenses increased to $141.3 million in the year ended December 31, 2022 compared with $22.3 million in the year ended December 31, 2021, primarily due to an increase in severance and acquisition costs of $82.1 million as a result of the Merger. During 2021, the Company recognized a $10.0 million gain on the sale of certain non-strategic exploration properties which contributed to the variance in costs between 2022 and 2021. Income and Mining Taxes Expense In 2022, the Company recorded income and mining taxes expense of $445.2 million on income before income and mining taxes of $1,115.4 million at an effective tax rate of 39.9%. In 2021, the Company recorded income and mining taxes expense of $370.8 million on income before income and mining taxes of $932.7 million at an effective tax rate of 39.8%. The Company’s 2022 and 2021 effective tax rate is higher than the applicable statutory tax rate of 26.0% due to the impact of mining taxes. In 2020, the Company recorded income and mining taxes expense of $256.0 million on income before income and mining taxes of $767.6 million at an effective tax rate of 33.3%. Balance Sheet Review Total assets at December 31, 2022 of $23,494.8 million increased compared to total assets of $10,216.1 million at December 31, 2021. The $13,278.7 million increase in total assets was primarily due to the assets acquired in the Merger. Total assets at December 31, 2021 of $10,216.1 increased compared to total assets of $9,614.8 million at December 31, 2020 primarily due to a $350.2 million increase in property, plant and mine development and a $248.5 million increase in inventories. Cash and cash equivalents were $658.6 million at December 31, 2022, an increase of $472.8 million compared with December 31, 2021 primarily due to $2,096.6 million in cash provided by operating activities and $838.7 million of cash acquired as a result of the Merger, partially offset by $1,538.2 million in capital expenditures, $608.3 million in dividends paid, $225.0 million in senior note repayments and $110.0 million in repurchases of common shares. Current inventory balances increased by $330.1 million from $878.9 million at December 31, 2021 to $1,209.1 million at December 31, 2022 primarily due to the addition of $172.3 million of inventories from the Kirkland operations at December 31, 2022 and the addition of $117.4 million in inventories following the ramp-up of mining operations at the Amaruq deposit. While 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 exposure and are not held for speculative purposes. Agnico Eagle does not use complex derivative contracts to hedge exposure. During the year ended December 31, 2022, the Company increased its currency and diesel hedge positions to mitigate the effect of price inflation on its key input costs. As at December 31, 2022, the Company had outstanding currency derivative contracts in respect of $2,907.9 million of 2023 and 2024 anticipated expenditure (December 31, 2021 – $2,375.2 million) and diesel fuel derivative contracts in respect of 19.0 million gallons of heating oil (December 31, 2021 – 10.9 million). Goodwill increased to $2,044.1 million at December 31, 2022 compared with $407.8 million at December 31, 2021 due to the purchase price allocation for the acquisition of Kirkland in the Merger. See Note 5 to the consolidated annual financial statements for further details. Property, plant and mine development increased by $10,783.8 million to $18,459.4 million at December 31, 2022 compared with $7,675.6 million at December 31, 2021, primarily due to the acquisition of Kirkland assets in the Merger during the first quarter of 2022 and $1,538.2 million in capital expenditures primarily at the Detour Lake, Canadian Malartic, and Meliadine mines, partially offset by amortization expense of $1,094.7 million incurred during 2022. Investments decreased from $343.5 million at December 31, 2021 to $332.7 million at December 31, 2022 primarily due to $105.3 million in unrealized fair value losses related to equity securities and share purchase warrants partially offset by additions of $60.3 million in equity securities as a result of the Merger and the purchase of $42.0 million in new 20 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS investments in equity and share purchase warrants. See Note 10 to the consolidated annual financial statements for details of the Company’s investments. Other assets increased by $113.7 million from $353.2 million at December 31, 2021 to $466.9 million at December 31, 2022 primarily due to the increase of $140.8 million of long-term stockpiles and $13.3 million of intangible assets as a result of the Merger, partially offset by a $40.0 million repayment of the loan receivable from Orla Mining Ltd. See Note 8B to the consolidated annual financial statements for details of the loan receivable. Total liabilities increased to $7,253.5 million at December 31, 2022 from $4,216.3 million at December 31, 2021 primarily due to an increase in deferred income and mining tax liabilities of $2,880.8 million, a $257.8 million increase in accounts payable and accrued liabilities, and a $171.8 million increase in reclamation provisions, partially offset by a $223.2 million decrease in long-term debt between periods. Total liabilities of $3,931.5 million at December 31, 2020 were lower compared to total liabilities as at December 31, 2021, primarily due to a $187.1 million increase in deferred income and mining tax liabilities, a $62.9 million increase in reclamation provisions and a $50.9 million increase in accounts payables and accrued and other liabilities between periods. An increase in accounts payable and accrued liabilities of $257.8 million is primarily due to the addition of accounts payable assumed through the Merger. Net income taxes payable decreased by $70.4 million between December 31, 2021 and December 31, 2022 as a result of payments to tax authorities exceeding the current tax expense and the additional income taxes recoverable due to the Company which were inherited upon the Merger. Long-term debt decreased from $1,565.2 million at December 31, 2021 to $1,342.1 million at December 31, 2022 primarily due to $225.0 million in repayments of the Company’s guaranteed senior unsecured notes (the “Notes”) in 2022. An increase in reclamation provisions of $171.8 million between December 31, 2021 and December 31, 2022 was primarily due to the re-measurement of reclamation provisions by applying updated expected cashflow estimates and assumptions and the addition of reclamation provisions assumed through the Merger. Net deferred income and mining tax liabilities increased by $2,880.8 million between December 31, 2021 and December 31, 2022 primarily due to the addition of net deferred income and mining tax liabilities from Kirkland since the completion of the Merger and to the origination and reversal of net taxable temporary differences. Liquidity and Capital Resources As at December 31, 2022, the Company’s cash and cash equivalents totaled $658.6 million compared with $185.8 million as at December 31, 2021. The Company’s policy is to invest excess cash in what the Company believes to be highly liquid investments of high 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. Investments with remaining maturities of less than three months at the time of purchase are classified as cash equivalents. The Company’s decisions regarding the length of maturities it holds are based on cash flow requirements, rates of return and various other factors. Working capital (current assets less current liabilities) increased to $1,233.6 million as at December 31, 2022 compared with $540.6 million as at December 31, 2021 primarily due to an increase in cash and cash equivalents of $472.8 million, an increase in inventories of $330.1 million and a decrease in the current portion of long-term debt of $125.0 million, partially offset by an increase in accounts payable and accrued liabilities of $257.8 million. Subject to various risks and uncertainties, such as those set in this MD&A and in the Company’s Annual Information Form, the Company believes it will generate sufficient cash flow from operations and has adequate cash and debt facilities available to finance its current operations, working capital requirements, contractual obligations, debt maturities, planned capital expenditure and exploration programs. While the Company believes its capital resources will be sufficient to satisfy all its mandatory and discretionary commitments, the Company may choose to decrease certain of its discretionary expenditure commitments, which include certain capital expenditures and exploration and corporate development expenses, should unexpected financial circumstances arise in the future. See Risk Profile in this MD&A. Operating Activities Cash provided by operating activities increased by $751.3 million to $2,096.6 million in 2022 compared with $1,345.3 million in 2021. The increase in cash provided by operating activities was primarily due to a 51.3% increase in MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 21 the sales volume of gold and more favourable movements in non-cash working capital balances. This was partially offset by an increase in production costs and exploration and corporate development expenses between periods. Cash provided by operating activities of $1,345.3 million in 2021 was $153.2 million higher compared with $1,192.1 million in 2020 primarily due to a 20.7% increase in the sales volume of gold. This was partially offset by an increase in production costs, exploration and corporate development expenses and a decrease in non-cash working capital balances between periods. Investing Activities Cash used in investing activities decreased to $710.5 million in 2022 compared to $1,264.0 million in 2021. The decrease in cash used in investing activities between periods was primarily due to $838.7 million in cash acquired as a result of the Merger combined with $340.9 million in non-recurring cash payments made in 2021 that related to the acquisition of TMAC and the Hope Bay royalty, partially offset by $641.2 million in additional capital expenditures. Cash used in investing activities was $808.8 million in 2020, which included capital expenditures of $759.3 million and net proceeds from the sale of equity securities and other investments of $45.2 million. In 2022, the Company invested cash of $1,538.2 million in projects and sustaining capital expenditures compared with $897.0 million in 2021. Capital expenditures in 2022 included $394.1 million at the Detour Lake mine, $195.4 million at the Canadian Malartic mine (the Company’s attributable 50% share), $155.1 million at the Meliadine mine, $152.6 million at the LaRonde mine, $141.5 million at the Meadowbank Complex, $122.5 million at the Macassa mine, $106.4 million at the Kittila mine, $94.7 million at the Fosterville mine, $61.4 million at the Goldex mine, $53.3 million at the Pinos Altos mine, $22.9 million at the LaRonde Zone 5 mine, $16.4 million at the La India mine, $14.3 million at the Hope Bay mine, and $7.7 million at the Company’s other projects. The $641.3 million increase in capital expenditures between 2022 and 2021 was primarily due to additional capital expenditures from the Detour, Macassa and Fosterville mines following the Merger. In 2022, the Company did not sell any equity securities and other investments. In 2022, the Company purchased $47.4 million of equity securities and other investments compared with $39.9 million in 2021 and $45.2 million in 2020. The Company’s investments in equity securities consist primarily of investments in common shares of entities in the mining industry. On April 27, 2021, Orla Mining Ltd. (“Orla”) completed a drawdown of $16.0 million under a loan agreement dated December 18, 2019 between, among others, Orla and the Company. The loan agreement related to a five-year credit facility to provide Orla financing for an aggregate principal amount of $125.0 million, of which the Company’s aggregate financing commitment is $40.0 million. On April 29, 2022, Orla repaid the loan in full. The Company owned 23,615,348 Orla common shares and 10,400,000 warrants to purchase Orla common shares as at December 31, 2022 and December 31, 2021, representing approximately 7.73% of the issued and outstanding common shares on a non- diluted basis and 10.77% of the issued and outstanding common shares on a partially-diluted basis, assuming exercise of the warrants held by the Company. Financing Activities Cash used in financing activities increased to $914.9 million in 2022 compared to $297.2 million in 2021 primarily due to an increase of $333.1 million in dividends paid, an increase of $225.0 million in senior note repayments and an increase of $75.3 million in repurchases of common shares, partially offset by an increase of $20.1 million in proceeds on exercise of stock options. Cash used in financing activities was $302.8 million in 2020. The Company issued common shares for net proceeds of $62.1 million in 2022 compared to $40.1 million in 2021, 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 were $104.5 million in 2020. On April 28, 2022, the Company received approval from the Toronto Stock Exchange to establish an NCIB. The Company has authorized purchases under the NCIB of the lesser of (i) 5% of the issued and outstanding common shares on the date of commencement of the NCIB and (ii) such number of common shares that may be purchased for an aggregate purchase price, excluding commissions, of $500.0 million, during the period starting on May 4, 2022 and ending May 3, 2023. During the year ended December 31, 2022, the Company repurchased 1,569,620 common shares for $69.9 million at an average price of $44.53 under the NCIB. In 2022, the Company declared dividends of $1.60 per share and paid cash dividends of $608.3 million, compared with dividends declared of $1.40 per share and cash dividends paid of $275.2 million in 2021. In 2020, the Company declared dividends of $0.95 per share and paid cash dividends of $190.3 million. Agnico Eagle has declared a cash dividend every 22 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS year since 1983. 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 December 22, 2021, the Company amended its unsecured revolving $1,200.0 million Credit Facility to improve pricing, increase the uncommitted accordion feature from $300.0 million to $600.0 million and extend the maturity date from June 22, 2023 to December 22, 2026. In 2022, the Company drew down and repaid $100.0 million from the Credit Facility. In 2021, the Company drew down and repaid $595.0 million from the Credit Facility, As at December 31, 2022, the Company’s outstanding balance under the Credit Facility was nil. Credit Facility availability is reduced by outstanding letters of credit which were $0.9 million as of December 31, 2022, resulting in $1,199.1 million available for future drawdown. On July 31, 2015, the Company amended its credit agreement with a 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. Effective September 20, 2022, the amount available under the First LC Facility was increased to C$400.0 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 December 31, 2022, the aggregate undrawn face amount of letters of credit under the First LC Facility is $266.2 million. On September 23, 2015, the Company entered into a standby letter of credit facility with a financial institution providing for a C$100 million uncommitted letter of credit facility (as amended, the “Second LC Facility”). Effective June 20, 2018, the amount available under the Second LC Facility was increased to C$135 million. Effective June 21, 2019, the amount available under the Second LC Facility was increased to $150 million. Effective September 16, 2021, the amount available under the Second LC Facility was increased to $200.0 million. 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 December 31, 2022, the aggregate undrawn face amount of letters of credit under the Second LC Facility is $96.2 million. 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 December 31, 2022, the aggregate undrawn face amount of letters of credit under the Third LC Facility was $65.8 million. In October 2021, the Company entered into a standby letter of credit facility with a financial institution providing for a $75.0 million uncommitted letter of credit facility (the “Fourth LC Facility”). Letters of credit issued under the Fourth 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 Fourth LC Facility are guaranteed by certain of its subsidiaries. As at December 31, 2022, the aggregate undrawn face amount of letters of credit under the Fourth LC Facility was $30.0 million. In January 2022, 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 “Fifth LC Facility” and, together with the First LC Facility, the Second LC Facility, the Third LC Facility and the Fourth LC Facility, the “LC Facilities”). Upon the acquisition of Kirkland, in February 2022, the Company acquired a standby letter of credit facility with the same financial institution providing for an additional C$120.0 million uncommitted letter of credit facility for the Kirkland subsidiary. Effective September 2022, an amended and restated standby letter of facility combined these facilities and the amount available under the amended and restated facility was increased to C$320.0 million. Letters of credit issued under the Fifth 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 Fifth LC Facility are guaranteed by certain of its subsidiaries. As at December 31, 2022, the aggregate undrawn face amount of letters of credit under the Fifth LC Facility was $211.1 million. In February 2022, upon the acquisition of Kirkland, the Company acquired a standby letter of guarantee facility (the “Guarantee Facility”) with a financial institution providing for a $25.0 million uncommitted letter of guarantee facility. Guarantees issued under the Guarantee Facility may be used to support the reclamation obligations or non-financial or MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 23 performance obligations of certain subsidiaries of the Company. The obligations of the Company under this Guarantee Facility are guaranteed by certain of its subsidiaries. As at December 31, 2022, the aggregate undrawn face amount of guarantees under this facility was $12.5 million. The Company was in compliance with all covenants contained in the Credit Facility, the LC Facilities, the Guarantee Facility and the Notes as at December 31, 2022. Off-Balance Sheet Arrangements The Company’s off-balance sheet arrangements as at December 31, 2022 include outstanding letters of credit for environmental and site restoration costs, custom credits, government grants and other general corporate purposes of $795.1 million under the Credit Facility and the LC Facilities (see Note 27 to the consolidated annual financial statements). If the Company were to terminate these off-balance sheet arrangements, the Company’s liquidity position (as outlined in the table below) is sufficient to satisfy any related penalties or obligations. Contractual Obligations Agnico Eagle’s contractual obligations as at December 31, 2022 are set out below: Reclamation provisions(i) Contractual commitments(ii) Pension obligations(iii) Lease obligations Long-term debt – principal(iv) Long-term debt – interest(iv) Total(v) Total 2023 2024-2025 2026-2027 Thereafter (millions of United States dollars) $ 938.8 $ 29.2 $ 72.6 $100.1 $ 736.9 154.5 97.4 157.3 1,350.0 333.2 120.6 2.8 38.0 100.0 57.2 $3,031.2 $347.8 24.1 14.1 43.4 190.0 101.3 $445.5 5.7 15.3 21.6 300.0 75.3 4.1 65.2 54.3 760.0 99.4 $518.0 $1,719.9 Notes: (i) Mining operations are subject to environmental regulations that require companies to reclaim and remediate land disturbed by mining operations. The Company has submitted closure plans to the appropriate governmental agencies which estimate the nature, extent and costs of reclamation for each of its mining properties. Expected reclamation cash flows are presented above on an undiscounted basis. Reclamation provisions recorded in the Company’s consolidated financial statements are measured at the expected value of future cash flows discounted to their present value using a risk-free interest rate. (ii) Purchase commitments include contractual commitments for the acquisition of property, plant and mine development. Agnico Eagle’s attributable interest in the purchase commitments associated with its joint operations totaled $36.5 million as at December 31, 2022. (iii) Agnico Eagle provides defined benefit plans for certain current and former senior officers and certain employees. The benefits are generally based on the employee’s years of service, age and level of compensation. The data included in this table have been actuarially determined. (iv) The Company has assumed that repayment of its long-term debt obligations will occur on each instrument’s respective maturity date. (v) The Company’s future operating cash flows are expected to be sufficient to satisfy its contractual obligations. 24 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS 2023 Liquidity and Capital Resources Analysis The Company believes that it has sufficient capital resources to satisfy its 2023 mandatory expenditure commitments (including the contractual obligations set out above) and discretionary expenditure commitments. The following table sets out expected capital requirements and resources for 2023: 2023 Mandatory Commitments: Contractual obligations, including capital expenditures (see table above) Accounts payable and accrued liabilities (as at December 31, 2022) Total 2023 mandatory expenditure commitments 2023 Discretionary Commitments: Expected capital expenditures Expected exploration and corporate development expenses Total 2023 discretionary expenditure commitments Total 2023 mandatory and discretionary expenditure commitments Amount (millions of United States dollars) $ 347.8 672.5 $1,020.3 $1,539.0 328.4 1,867.4 $2,887.7 As of December 31, 2022, the Company believes it had adequate capital resources available to satisfy its commitments, which include cash, cash equivalents and short-term investments of $668.5 million, working capital (excluding cash, cash equivalents and short-term investments) of $565.1 million and $1,199.1 million of available credit under its Credit Facility. In addition, the Company anticipated funding its commitments through cash provided by operating activities. While the Company believes its capital resources will be sufficient to satisfy all 2023 commitments (mandatory and discretionary), the Company may choose to decrease certain of its discretionary expenditure commitments, which include certain capital expenditures and exploration and corporate development expenses, should unexpected financial circumstances arise in the future. The Company believes that it will continue to have sufficient capital resources available to satisfy its planned development and growth activities. See Outlook and Risk Profile – Impact of COVID-19 on the Company’s Business and Operations in this MD&A. On June 16, 2022, Fitch Ratings upgraded its credit rating for the Company to BBB+ from BBB with a stable outlook reflecting the Company’s strong credit profile, along with the size and scale benefits arising from the Merger. Quarterly Results Review For the Company’s detailed 2022 and 2021 quarterly financial and operating results see Summarized Quarterly Data in this MD&A. Fourth Quarter 2022 vs. Fourth Quarter 2021 Revenues from mining operations increased by 45.5% to $1,384.7 million in the fourth quarter of 2022 compared with $951.5 million in the fourth quarter of 2021, primarily due to the contribution of gold sales volume from the Detour Lake, Fosterville and Macassa mines following the Merger, partially offset by lower gold sales volume at the LaRonde Complex, the Kittila and La India mines and the Hope Bay project. Production costs increased by 42.8% to $666.9 million in the fourth quarter of 2022 compared with production costs of $467.1 million in the fourth quarter of 2021, primarily due to the contribution of production costs from the Detour Lake, Fosterville and Macassa mines following the Merger, partially offset by the weakening of the Canadian dollar relative to the US dollar between periods. Exploration and corporate development expenses increased by 70.0% to $70.9 million in the fourth quarter of 2022 compared with $41.7 million in the fourth quarter of 2021, primarily due to the contribution of expensed exploration drilling at the Detour Lake, Fosterville and Macassa mines following the Merger and higher expensed exploration drilling at the Meadowbank Complex, the Meliadine mine, Hope Bay project and Amalgamated Kirkland properties. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 25 Amortization of property, plant and mine development increased by 40.8% to $269.7 million in the fourth quarter of 2022 compared with $191.6 million in the fourth quarter of 2021 primarily due to the contribution of amortization from Detour Lake, Fosterville and Macassa mines following the Merger. Net income of $205.0 million was recorded in the fourth quarter of 2022 after income and mining taxes expense of $73.9 million compared with net income of $101.4 million in the fourth quarter of 2021 after income and mining taxes expense of $87.9 million. Cash provided by operating activities increased by 45.2% to $380.5 million in the fourth quarter of 2022 compared with $262.1 million in the fourth quarter of 2021. The increase in cash provided by operating activities is primarily due to the contribution of gold sales from the Detour Lake, Fosterville and Macassa mines following the Merger. Fourth Quarter 2022 vs. Third Quarter 2022 Revenues from mining operations decreased by 4.5% to $1,384.7 million in the fourth quarter of 2022 compared with $1,449.7 million in the third quarter of 2022, primarily due to a 5.0% decrease in the sales volume of gold between periods, driven by lower sales volumes at the LaRonde and Meadowbank complexes, partially offset by higher sales volumes at the Meliadine and Detour Lake mines. Production costs increased by 1.5% to $666.9 million in the fourth quarter of 2022 compared with production costs of $657.1 million in the third quarter of 2022, primarily due to higher production costs at the Meadowbank Complex and Meliadine mine, partially offset by lower production costs at the LaRonde Complex. Exploration and corporate development expenses increased to $70.9 million in the fourth quarter of 2022 compared with exploration and corporate development expenses of $64.0 million in the third quarter of 2022. The increase in exploration and corporate development expenses between periods is primarily due to increased exploration activities at the Canadian Malartic complex and the Upper Beaver and Hope Bay projects in Canada. Amortization of property, plant and mine development decreased to $269.7 million in the fourth quarter of 2022 compared with amortization of property, plant and mine development of $273.2 million in the third quarter of 2022, primarily due to a decrease in tonnage processed at the Meadowbank Complex and the Fosterville and Kittila mines, partially offset by an increase in tonnes processed at the Meliadine and Goldex mines. Cash provided by operating activities decreased by 33.9% to $380.5 million in the fourth quarter of 2022 compared with $575.4 million in the third quarter of 2022. The decrease in cash provided by operating activities is primarily due to a $65.0 million decrease in revenues from mining operations and a $122.1 million decrease in non-cash working capital between periods. Outlook The following section contains “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws. See “Note to Investors Concerning Forward-Looking Information” and “Risk Profile – Impact of COVID-19 on the Company’s Business and Operations” in this MD&A for a discussion of assumptions and risks relating to such statements and information and a discussion of the certain risks facing the Company relating to the pandemic. 2023 and 2024 Outlook Update Payable gold production is forecast to be between 3.24 to 3.44 million ounces in 2023, between 3.35 and 3.55 million ounces in 2024 and between 3.40 and 3.60 million ounces in 2025. The Company’s production guidance assumes 50% ownership of Canadian Malartic for the first three months of 2023 and 100% ownership starting in April 1 2023. 2022 Results Comparison to 2022 Outlook Gold Production and Costs Payable gold production for the full year 2022 was 3,135,007 ounces, which was lower than the previous guidance range of 3,210,000 and 3,390,000 ounces as the guidance included Kirkland production for the pre-Merger period from the beginning of the year to the closing of the Merger on February 8, 2022. Including the pre-Merger period, pro-forma gold production was 3,280,731 ounces which was within the previous guidance range. Total cash costs per ounce of gold produced on a by-product basis for the full year 2022 was $793, which was higher than the previous guidance range of approximately $725 to $775 primarily reflecting the period after the closing of the Merger as noted above. Including the pre-Merger period, pro-forma total cash costs per ounce of gold produced on a by-product basis was $780, which was slightly higher than the previous guidance range as a result of inflationary cost pressures driven by higher input prices on key consumables, such as fuel, cyanide and steel. 26 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Capital Expenditures and All-In Sustaining Costs per Ounce of Gold Produced Total capital expenditures (including sustaining capital) for the full year 2022 were $1,536.9 million, compared to the previous guidance of approximately $1,543.6 million, which included capitalized exploration as well as Kirkland capital expenditures for the pre-merger period from the beginning of the year to the closing of the Merger on February 8, 2022. Including the pre-merger period, capital expenditures were $1,591.1 million, which was higher than the previous guidance range. The increase in capital expenditures compared to the previous guidance is primarily related to additional spending at the LaRonde Complex and the Detour Lake mine, which was partially offset by a decrease in capitalized expenditures at the Macassa mine. At the LaRonde Complex, there was approximately $23.3 million of additional capital expenditures for deferred development. At the Detour Lake mine, there was approximately $36.8 million of additional capitalized deferred stripping costs. At the Macassa mine there was approximately $35.3 million of lower capital expenditures due to the timing of projects. All-in sustaining costs per ounce of gold produced on a by-product basis for the full year 2022 were $1,109, which was higher than the previous guidance range of approximately $1,000 to $1,050 primarily due to the higher total cash costs and additional capital expenditures noted above. Exploration and Corporate Development Expense Previous guidance for exploration and corporate development expense was $258.5 million which included Kirkland exploration and corporate development expenditures for the pre-merger period from the beginning of the year to the closing of the Merger on February 8, 2022. On August 11, 2022, the Company announced the approval of an additional $30.0 million to exploration expenditures. Exploration and corporate development expense for the full year 2022 was $271.1 million, slightly lower than the updated previous guidance of approximately $288.5 million. Amortization of Property, Plant and Mine Development On July 27, 2022, the Company provided a new outlook for 2022 regarding Company-wide expected amortization (the “New Outlook”). Amortization of property, plant and mine development expense for the full year 2022 was $1,094.7 million in 2022, which was lower than the New Outlook range of approximately $1,250.0 million to $1,350.0 million primarily due to the New Outlook reflecting the period prior the closing of the Merger on February 8, 2022. Including the pre-merger period, pro-forma amortization expense was lower than the New Outlook primarily due to adjustments to the purchase price allocation. General and Administrative Expense General and administrative expenses for the full year 2022 were $220.9 million, which was within the range in previous guidance of approximately $215.0 to $235.0 million. Operations Outlook LaRonde Complex In 2022, the LaRonde Complex produced 356,337 ounces of gold at production costs per ounce of $885 and total cash costs per ounce of $703. In 2023, the Company expects production at the LaRonde Complex to be between 265,000 and 285,000 ounces at total cash costs per ounce of approximately $923. The LaRonde mine consists of the East and West mines. The mining at both mines extends below three kilometres from surface where the in-situ stress contributes to influence the ground conditions surrounding the excavations. Seismicity is a significant aspect of the operation and a team of rock mechanics experts has been engaged to attepmt to manage the seismic related challenges. The Company’s objective remains to address the seismic risk by continuously improving mitigation measures to keep a safe work environment while maintaining reasonable production rates. These mitigation measures include non-entry protocols, dynamic ground support and, increasingly, remote operation from surface. The mining sequence is also designed to attempt to push the stress away from the orebody to reduce the seismic risk. For the lower levels at the LaRonde mine, the transverse open stoping method, combined with a primary-secondary stope mining sequence, is almost exclusively used to address the deep and high stress conditions. In the primary-secondary stope mining sequence, primary stopes are mined out first and backfilled with pastefill, leaving secondary stopes as temporary pillars. Secondary stopes are mined once the pastefill in the primary stopes has cured. Secondary stopes are backfilled with waste rock or pastefill. With the deepening of the mine, the Company has determined that a change in mining sequence in the East mine is required to attempt to reduce the stress levels on the secondary stopes, reduce seismic risk and promote sustainability of MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 27 the operation in the long run. Rather than a primary-secondary stope sequence, the Company plans to mine sequentially to remove the usage of temporary pillars. This mining sequence is referred to as “pillarless” mining. In addition, the design of the ramp in the East mine has been adjusted to be further away from the geological structures. Pillarless mining, combined with an adjusted development plan, results in a longer cycle time to extract stopes, resulting in a reduced mining rate. In 2022, the new East mine ramp infrastructure required to keep advancing the mining sequence in the East mine was completed in 2022. Production was mainly affected by the modified mining sequence at LaRonde mine due to accumulated delays in lateral development in the East mine and revisions to the mining plan. The dry stack tailings facilities were commissioned in the fourth quarter of 2022 and it has been operating as expected since commissioning In the fourth quarter of 2022, drilling at the LZ5 mine confirmed the extension of mineralization to the west onto the Ellison property at depth. At the LaRonde mine, exploration drilling at the East mine indicates that the mineralization could extend to similar depths as seen in the West mine area. This drilling resulted in the addition of new inferred mineral resources in the East mine at year-end 2022. Canadian Malartic Complex In 2022, the Canadian Malartic complex produced 329,396 ounces of gold at total cash costs per ounce of $787. In 2023, the Company expects production at the Canadian Malartic complex to be between 575,000 and 595,000 ounces at total cash costs per ounce of approximately $873. Mining activities in the Canadian Malartic pit continued to advance as planned and the pit is expected to be mined out late in the first half of 2023. Upon depletion of the Canadian Malartic pit, preparation work will be undertaken to prepare for in-pit tailings disposal, which is expected to start in the second half of 2024. In the fourth quarter of 2022, the Odyssey project continued to advance on schedule. The project is now fully permitted with both the mine production certificate of authorization and the mining lease granted during the quarter. Production stope design and drilling was initiated in the fourth quarter of 2022, and the first tonnes of development ore were processed at the mill (approximately 59,000 tonnes grading 0.87 g/t gold containing 1,567 ounces of gold). Production from the Odyssey South orebody is expected to begin before the end of March 2023. The emphasis in the first quarter of 2023 will be on installation of an underground escapeway in the underground mine and starting work on the installation of the underground paste backfill network to further facilitate the production ramp up. The startup of the paste plant remains on schedule and is expected to occur in the second quarter of 2023. Structural steel installation for the headframe reached the seventh floor in the fourth quarter of 2022, with completion to the ninth and final floor expected in during first quarter of 2023. Structural steel installation is sensitive to weather conditions, and the schedule was affected by rain and high winds in the fourth quarter of 2022. As a result, shaft sinking activities are now planned to commence at the end the first quarter of 2023. Exploration drilling by the Partnership in the fourth quarter of 2022 at the Odyssey project focused on infilling the East Gouldie deposit from surface and the Odyssey South deposit from underground, as well as obtaining more information on the Odyssey internal zones. Exploration drilling also continued to investigate extensions of the East Gouldie Zone laterally to the east and to the west. The Company is currently evaluating a number of near surface and underground opportunities on the Canadian Malartic property to leverage anticipated future excess mill capacity and mining infrastructure. The Canadian Malartic land package contains two properties (Camflo and LTA) that hosted significant past producing gold mines. These properties appear to have considerable exploration potential and are both located within trucking distance of the Canadian Malartic mill. The Camflo mine property is located approximately six kilometres northeast of the town of Malartic. Historical production at the Camflo mine occurred between 1965 and 1992 and approximately 1.65 million ounces of gold were produced. The property has not been explored since the mid-1980s and the Company has identified porphyry hosted gold mineralization that could potentially be mined in an open pit scenario. In 2023, an exploration drilling program is planned to further evaluate the exploration potential on the property. In January 12, 2023, the Partnership entered into an agreement with Barrick Gold Corporation to acquire the LTA property, which is expected to close in the first half of 2023. The LTA property is one of the last inlier claims on the eastern portion 28 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS of the Canadian Malartic property. The LTA property covers approximately 3,200 hectares and hosted approximately 50% of the historical gold production at the Malartic Goldfields mine (1.7 million ounces of gold from 9.0 Mt grading 5.91 g/t gold). In the near term, the Company plans to complete compilation of the historical data to prioritize drill targets for later in 2023. Goldex Mine In 2022, Goldex achieved several milestones, including record annual tonnage hauled by the Rail-Veyor system, record tonnage of ore hoisted and record tonnage of ore milled. In 2022, Goldex produced 141,502 ounces of gold at cash costs per ounce of $765. In 2023, the Company expects to produce between 130,000 and 140,000 ounces of gold at the Goldex mine at cash costs per ounce of $786. Strong operational performance in the South Zone in the fourth quarter of 2022 and full year 2022 was the key driver to exceed the minesite production targets. In the fourth quarter of 2022, Goldex achieved above forecast lateral development which supports the development of new production areas in the South Zone and Deep 2 Zone planned for 2023. In 2022, the Company commenced development activities at the Akasaba West project, the main activities included the removal of overburden and the installation of surface infrastructure (offices, water treatment installation). The Company expects to complete construction for production in early 2024 and the project is expected to provide additional production flexibility to Goldex starting in 2024. Conversion drilling at Goldex in 2022 succeeded in adding 124,000 ounces of gold to mineral reserves to partly replace mine production depletion of 159,000 ounces of gold in situ, with mineral reserves now standing at 962,000 ounces of gold (18.4 million tonnes grading 1.62 g/t gold). Exploration drilling in the fourth quarter of 2022 in South Zone Sector 3 continued to return significant results, including hole GD138-011 that intersected 21.5 g/t gold over 3.6 metres at 1,461 metres depth. Meliadine Mine In 2022, the Meliadine mine produced 372,874 ounces of gold at total cash costs per ounce of $863. In 2023, the Company expects production at the Meliadine mine to be between 355,000 and 375,000 ounces at total cash costs per ounce of approximately $850. In the fourth quarter of 2022, the underground mine continued to deliver solid operational performance resulting in higher than forecast ore tonnes hauled to surface. Development activities were lower than forecast primarily due to unplanned maintenance on mobile equipment and workforce availability. The delay in underground development is not expected to affect the mining sequence in the upcoming quarter. In the open pit, ore production was above forecast mostly related to increased ore available for mucking and good overall productivity. Meliadine continued consistent and productive automated mucking and haulage activities between shifts with automation used on 84% of days in the fourth quarter of 2022. In 2023, the Company expects to increase automated activities, as well as complete the deployment of a new fleet management system. Meadowbank Complex The Meadowbank complex acheived its best year of production in 2022, increasing annual mill throughput by over 300,000 tonnes (including pre-commercial production), while achieving commercial production at the Amaruq underground deposit on August 1, 2022. In 2022, the Meadowbank complex produced 373,785 ounces of gold at total cash costs per ounce of $1,210. In 2023, the Company expects production at the Meadowbank Complex to be between 410,000 and 430,000 ounces at total cash costs per ounce of approximately $1,315. In the fourth quarter of 2022, the open pit entered into a lower gold grade area at Whale Tail and IVR and a higher waste stripping period that is expected to last through 2023. Mill throughput was affected by high sulfur content ore and the ongoing ramp-up of the high pressure grinding roll system while gold recovery was affected by a leach tank that was down during the month of October. The Company continues to ramp up the use of the high pressure grinding rolls following the commissioning of the project in the second quarter of 2022 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 29 Hope Bay Project On February 2, 2021, Agnico Eagle completed the acquisition of TMAC for consideration of approximately $226.0 million. In September and October of 2021, there were a significant number of COVID-19 cases identified at the Hope Bay project. As a precautionary measure, the Company decided to suspend mining and milling operations. The Company started to ramp-up exploration and underground activities in mid-November 2021. However, with increasing cases of COVID-19 in December 2021, the Company again reduced all activities at site to essential services only. The Company determined in February 2022 that production activities would be suspended for the remainder of 2022 and 2023 and the Company’s primary focus during this time would be accelerating exploration and the evaluation of larger production scenarios. In 2022, exploration drilling at Hope Bay confirmed the potential to upgrade and expand mineral resources at the Doris deposit. Exploration in 2023 will primarily shift to the Madrid deposit to further expand the mineral resources with a focus on defining areas of higher-grade mineralization. Work continues on evaluating various future production scenarios. Farther south in the Hope Bay belt at the Boston deposit, the camp was refurbished in 2022 and is ready for exploration drilling in 2023. Kittila Mine In 2022, Kittila produced 216,947 ounces of gold at cash costs per ounce of $980. In 2023, the Company expects to produce between 190,000 to 210,000 ounces of gold at the Kittla mine at cash costs per ounce of $950, current guidance contemplates operating under the 1.6 Mtpa operating permit while awaiting for a final decision by the Supreme Administrative Court of Finland on the reinstatement of the 2.0 Mtpa operating permit. As a result of the permit limitation and the electricity price volatility in the fourth quarter of 2022, the underground mine production was reduced to approximately 183,000 tonnes and the underground mine activities were largely focused on lateral development. The Company expects a final decision from the SAC during the second half of 2023. Until then, the Company will rely on the current mining permit while maintaining operational flexibility to reach the 2.0 Mtpa volume in case of a positive decision by the SAC. If the SAC does not reinstate Agnico Finland’s right to operate at, or close to, 2.0 Mtpa, the Company intends to submit an updated permit application for 2.0 Mtpa output level or higher. Electricity prices stabilized towards the end of December 2022, with the commissioning of a nearby nuclear power plant now expected to be completed in the first quarter of 2023. As a result, the underground mine activities resumed in January 2023 (not at the 2.0 Mtpa rate). The Company continues to monitor closely the stability of the grid and electricity pricing. During the fourth quarter of 2022, the shaft sinking project progressed as planned. The service hoist rope-up was completed and the production hoist rope-up is underway. The final conveyor at the S1000 production level was also completed. The commissioning of the production hoist is expected to start in the first quarter of 2023 and ramp up of activities in the second quarter of 2023. In the fourth quarter of 2022, the commissioning of a nitrogen removal plant commenced and the Company focused on ramping-up and stabilizing the process. Nitrogen removal of 70% to 80% was achieved, which is ahead of expectations. During the fourth quarter of 2022, drilling continued to extend the Sisar Zone at depth in the Rimpi area by approximately 130 metres down-plunge from the Suuri area. Detour Lake Mine For the period between February 8 and December 31, 2022 the Detour Lake mine produced 651,182 ounces at cash costs per ounce of $657. For the complete twelve months of 2022, including the period before the Merger, pro-forma total gold production at the Macassa mine was 732,572 ounces. In 2023, the Company expects production at the Detour Lake mine to be between 675,000 and 705,000 ounces at total cash costs per ounce of approximately $707. In the fourth quarter of 2022, tonnage milled was lower than forecast as a result of the five week long secondary crusher screen installation on the first line of the mill circuit which was originally planned earlier in the year. The lower tonnage from the shutdown was partially offset by better than planned performance from the recently commissioned refeed system. The Company continues to advance multiple initiatives with the goal of increasing mill throughput from 23.0 Mtpa in 2020 to 28.0 Mtpa in 2025. The initiatives completed to date include improved fragmentation at the mine, improved primary crusher choke feeding, removal of the daily regulatory mill limit, the completion of the 610 conveyor re-feed and the installation of screens before the secondary crushers. All of these initiatives are expected to bring the mill throughput capacity to approximately 27.5 Mtpa in 2023. The installation and commissioning of the screens before the secondary crushers on line two were completed in the third quarter of 2022 and on line one in the fourth quarter of 2022. 30 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Exploration at Detour Lake in the fourth quarter of 2022 was focused on infill drilling under the West Pit Zone, conversion drilling to the west along the West Pit Extension, and exploration drilling of several regional targets. Macassa Mine For the period between February 8, 2022, the Macassa mine produced 180,833 ounces of gold at cash costs per ounce of $683. For the complete twelve months of 2022, including the period before the Merger, pro-forma total gold production at the Macassa mine was 200,288 ounces. In 2023, the Company expects production at the Macassa mine to be between 205,000 and 225,000 ounces at total cash costs per ounce of approximately $761. Development work to connect the new shaft infrastructure to the existing mining areas continued to advance during the fourth quarter of 2022. Construction of the conveyor loadout station is underway and is expected to be completed in first quarter of 2023. The Shaft #4 production hoist commissioning commenced in December 2022, with final commissioning of the full material handling system expected to be completed in the first quarter of 2023. The upgrade of the ventilation system progressed as planned. In the fourth quarter of 2022, the civil construction for the installation of the two 3,000 horse power fans was completed and work on the mechanical and electrical installation is underway. The commissioning of the fans is expected to commence in the first quarter of 2023. At the Macassa mine, the near-term focus is optimizing the mill with high-grade ore from the South Mine Complex. As a result, the Company is evaluating the potential to transport ore from the AK deposit at Macassa to the LaRonde mill (a distance of approximately 130 kilometres) to utilize the excess mill capacity. Fosterville Mine For the period between February 8, 2022 and December 31, 2022, the Fosterville mine produced 338,327 ounces of gold at cash costs per ounce of $378. For the complete twelve months of 2022, including the period before the Merger, pro-forma total gold production at the Fosterville mine was 383,206 ounces. In 2023, the Company expects production at the Fosterville mine to be between 295,000 and 315,000 ounces at total cash costs per ounce of approximately $457. In the fourth quarter of 2022, mine production was affected by lower than target grade reconciliation in an ultra-high- grade stope. Significant rainfall and flooding in October 2022, stressed the mine water management system and resulted in a pause in development at Robbins Hill as development crews were redeployed to the Harrier area. Mine production continues to be affected by primary ventilation operating restrictions related to low frequency noise issues. The Company is exploring means of reducing the regenerative noise from the existing main ventilation fans’ silencers. In the fourth quarter of 2022, a structural and air borne noise investigation was completed. Additional surface attenuation engineering design was completed in the quarter and testing is expected to commence in the first quarter of 2023. The Company will continue to work towards a resolution into 2023, while also evaluating the potential installation of the primary fans underground in the longer term. Four underground ventilation raises are planned to be excavated at Lower Phoenix and Harrier to upgrade the ventilation system and extend the service of the primary fans. The excavation of the ventilation raises commenced in the fourth quarter of 2022 and completion of the full ventilation upgrade project is expected in the first half of 2024. In the fourth quarter of 2022, work continued on the seventh raise of the flotation tailings storage facility, despite the challenge with heavy spring rains. The wall raise is expected to provide an additional 17 months of tailings storage capacity and be completed in the first half of 2023. Exploration drilling on the Fosterville mining lease and exploration licenses totalled 154,917 metres during 2022. Drilling in the Lower Phoenix and Cardinal zones was paused early in the fourth quarter of 2022 to extend the P3912 drill drive development, which advanced 137 metres during the quarter. Drilling will resume from the drill drive in the second quarter of 2023 to test the extensions of high-grade mineralization identified in the Lower Phoenix and Cardinal zones. Infill and extension drilling progressed from the Robbins Hill exploration decline during the fourth quarter of 2022 with a new splay structure named Wu identified in the hanging wall of the Curie Fault. Pinos Altos Mine In 2022, the Pinos Altos mine produced 96,522 ounces of gold at total cash costs per ounce of $1,249. In 2023, the Company expects production at the Pinos Altos mine to be between 80,000 and 90,000 ounces at total cash costs per ounce of approximately $1,168. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 31 The backlog in underground development at the Santo Niño and Cerro Colorado areas, resulting from the higher than anticipated rehabilitation work in the first six months of 2022, continued to affect the stope availability and ore delivery to the mill in the fourth quarter of 2022. In the third quarter of 2022, the Company adjusted the mining sequence and mining rate according to the current mining conditions and established a plan to improve the mining recovery and reduce dilution. With these initiatives in place, the Company saw improvements in the development and production rates in the fourth quarter of 2022 aligned with the modified mining plan. At Reyna de Plata, open pit pre-stripping activities at Pit 1 were completed in the fourth quarter of 2022 as planned. Ore production from Reyna de Plata was above target in the fourth quarter of 2022. In the fourth quarter of 2022, pre-construction activities at the Cubiro deposit were halted. Additional exploration and definition drilling is planned for 2023 to better define the high grade ore shoot for future production and optimize the mine design and sequence. Initial production is now expected in the second half of 2024. Once production commences, Cubiro is expected to provide additional production flexibility to the Pinos Altos operations. In addition to the planned drilling at Cubiro, the exploration program at Pinos Altos is focused on testing the depth potential of the Cerro Colorado, Santo Nino and Reyna East zones and other targets on the property. La India Mine In 2022, the La India mine produced 74,672 ounces of gold at total cash costs per ounce of $1,056. In 2023, the Company expects production at the La India mine to be between 60,000 and 70,000 ounces at total cash costs per ounce of approximately $1,147. In the fourth quarter of 2022, the La India pit was depleted. At El Realito pit, the stripping ratio in the early mining phase was higher than anticipated and resulted in lower ore tonnes being placed on the heap leach. The El Realito rock storage facilities were completed in December 2022 as planned The El Realito pit is expected to be mined out late in the fourth quarter of 2023. Gold production in 2024 will come from the residual leaching of the heap leach pads. An exploration program aimed to investigate additional sulphide mineralization is continuing with a plan to drill approximately 4,000 metres in 2023 at the Chipriona polymetallic sulphide deposit to test potential lateral extensions and parallel structures at open pit depths. Production Summary Following the completion of the Merger, the Company now has six cornerstone production assets (the LaRonde, Meadowbank and Canadian Malartic complexes and the Detour Lake, Fosterville and Meliadine mines) each with annual production rates in 2023 expected to be in excess of 300,000 ounces of gold. In 2022, payable gold production was 3,135,007 ounces. As the Company optimizes this expanded production platform, it expects to continue to deliver on its vision and strategy. The Company expects that the main contributors to achieving the targeted levels of payable gold production, mineral reserves and mineral resources in the near term will include: • continued ramp-up of the Nunavut operations; • continued mill and mine plan optimization; and • continued conversion of current mineral resources to mineral reserves. Financial Outlook As of the date of this MD&A, the Company does not expect that the COVID-19 pandemic will affect its planned 2023 capital expenditure and exploration program, but cannot provide any assurances that proposed capital expenditure or exploration activities will not be delayed, postponed or cancelled whether as a result of the COVID-19 pandemic, measures taken associated with the pandemic or otherwise. See “Notes to Investor Concerning Forward-Looking Statements” and Risk Profile – Impact of COVID-19 on the Company’s Business and Operations” in this MD&A for a discussion of assumptions and risks relating to such statements and information and a discussion of certain risks facing the Company relating to the pandemic. Revenue from Mining Operations and Production Costs In 2023, the Company expects to continue to generate solid cash flow with payable production of approximately 3,240,000 to 3,440,000 ounces of gold compared with 3,135,007 ounces in 2022. This expected increase in payable production of 32 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS gold is primarily due to the completion of the Merger, with production from the Detour and Macassa mines in Canada and the Fosterville mine in Australia that was previously held by Kirkland, the acquisition of the other 50% of the Canadian Malartic complex upon closing of the Yamana Transaction and the continued ramp-up of production at the Meliadine and Amaruq underground mines. The table below sets out expected payable production in 2023 and actual payable production in 2022: Gold (ounces) Silver (thousands of ounces) Zinc (tonnes) Copper (tonnes) 2023 Forecast 2022 Actual 3,240,000 – 3,440,000 3,135,007 2,371 10,532 2,683 2,292 8,195 2,901 In 2023, the Company expects total cash costs per ounce of gold produced on a by-product basis to be between $840 and $890. At the LaRonde Complex total cash costs per ounce of gold produced on a by-product basis is expected to be approximately $923 compared with $703 in 2022. In calculating expectations of total cash costs per ounce of gold produced on a by-product basis for the LaRonde mine, net silver, zinc and copper by-product revenue offsets production costs. Therefore, production and price assumptions for by-product metals play an important role in the LaRonde Complex’s expected total cash costs per ounce of gold produced on a by-product basis. The Pinos Altos mine also generates significant silver by-product revenue. An increase in by-product metal prices above forecast levels would result in improved total cash costs per ounce of gold produced on a by-product basis at these mines. Total cash costs per ounce of gold produced on a co-product basis are expected to be approximately $1,052 in 2023 at the LaRonde Complex compared with $885 in 2022. As production costs at the LaRonde, Canadian Malartic and Meadowbank complexes as well as the Detour Lake, Macassa, Meliadine and Goldex mines are incurred primarily in Canadian dollars, production costs at the Fosterville mine are incurred primarily in Australian dollars, production costs at the Kittila mine are incurred primarily in Euros, and a portion of the production costs at the Pinos Altos and La India mines are incurred in Mexican pesos, the US dollar/Canadian dollar, US dollar/Australian dollar, US dollar/Euro and US dollar/Mexican peso exchange rates also affect the Company’s expectations for the total cash costs per ounce of gold produced both on a by-product and co-product basis. The table below sets out the metal price and exchange rate assumptions used in deriving the expected 2023 total cash costs per ounce of gold produced on a by-product basis (forecast production for each metal is shown in the table above) as well as the actual market average closing prices for each variable for the period of January 1, 2023 through February 28, 2023: Silver (per ounce) Zinc (per tonne) Copper (per tonne) Diesel (C$ per litre) US$/C$ exchange rate (C$) US$/Euro exchange rate (Euros) US$/Mexican peso exchange rate (Mexican pesos) US$/A$ exchange rate (A$) Actual Market Average (January 1, 2023 – February 28, 2023) 2023 Assumptions $22.00 $3,086 $8,818 $ 0.93 $ 1.32 € 0.91 20.00 $ 1.40 $22.90 $3,224 $8,989 $ 1.85 $ 1.34 € 0.93 18.79 $ 1.44 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 33 See Risk Profile – Commodity Prices and Foreign Currencies in this MD&A for the expected impact on forecast 2023 total cash costs per ounce of gold produced on a by-product basis of certain changes in commodity prices and exchange rate assumptions. Exploration and Corporate Development Expenditures In 2023, Agnico Eagle expects to incur exploration and corporate development expenses of approximately $328.4 million. A top priority of the 2023 exploration program is a major drilling campaign in the deeper, higher-grade portions of the Detour Lake deposit to assist in the study of a potential underground mining scenario and to improve understanding of the deposit in support of further optimization and potential expansion of the open pit. Other priorities in 2023 are the growth of the underground Odyssey project at the Canadian Malartic complex and exploration campaigns at the LaRonde Complex, the Macassa, Meliadine, Fosterville, Kittila mines and Hope Bay project. At the LaRonde Complex, the Company expects to spend approximately $1.6 million for 13,200 metres of capitalized drilling and approximately $9.8 million for 43,000 metres of exploration drilling into multiples targets including Zone 5, Zone 6, Zone 20N and the recently discovered Zone 20N Zn South with the aim of adding new mineral reserves and mineral resources to extend mine life further into the 2030s. The budgeted work program includes further extension of the exploration drift on Level 215 by 1,060 metres to the west to provide drill platforms to test the vertical extensions of known zones on the Bousquet property and below the LZ5 deposit. At the Goldex mine, the Company expects to spend approximately $4.8 million for 41,000 metres of drilling comprised of 25,300 metres of conversion drilling and 15,700 metres of exploration drilling, focused on the M Zone, West area, South Zone and at depth in the Deep 3 Zone. At the Canadian Malartic complex and Odyssey project, the Company expects to spend a total of approximately $21.8 million (50% portion attributable to the Company for the first quarter of 2023 and 100% basis for the remaining quarters of 2023) for 164,000 metres of drilling (100% basis). Exploration at the Odyssey Project will include $11.8 million for 102,000 metres of drilling with four objectives: continued drilling into the East Gouldie deposit to convert additional inferred mineral resources to indicated mineral resources towards the outer portions of the deposit; testing the immediate extensions of East Gouldie to the west and at shallower depths; continued conversion drilling into extensions of the Odyssey South deposit; and further investigation of Odyssey’s internal zones. Approximately $5.0 million is budgeted for 22,000 metres of exploration drilling mainly to complete a first phase of drilling at the adjacent Camflo property acquired by the Partnership in 2021 for its near-surface, bulk-tonnage gold mineralization potential. The remaining $5.0 million is budgeted for 40,000 metres of drilling into gold targets along the Barnat and East Gouldie corridors on the Canadian Malartic and Rand Malartic properties. At the Detour Lake mine, the Company expects to spend a total of approximately $33.2 million for 171,000 metres of drilling that will include $29.4 million for 157,000 metres of capitalized drilling to expand mineral resources at depth and to the west in support of a preliminary economic assessment of the underground project and further optimization of the open pit in the Saddle and West Pit areas. The remaining $3.7 million is for 14,000 metres of exploration drilling to continue to investigate the Sunday Lake deformation zone to the east and west of the current pit’s mineral resources. At the Macassa mine, the Company expects to spend approximately $18.3 million for 145,400 metres of capitalized drilling to replace depletion of mineral reserves and mineral resources. $1.2 million is budgeted for 9,500 metres of exploration drilling to continue to investigate extensions of key targets at South Mine Complex (East, West, Upper and Lower), Main Break, ‘04 Break, Amalgamated Break and Near-Surface. The remaining $14.1 million of capitalized exploration will be spent to further develop exploration drifts including the 1.3 kilometre exploration ramp from the Near- Surface area in order to access, develop and infill with underground drilling the mineralization on the AK property. For regional exploration in Ontario, the Company expects to spend a total of $9.5 million to undertake a major compilation of all historical information in the Company’s properties in the Kirkland Lake camp. The compilation will assist in developing new exploration targets around the Macassa mine and the Company anticipates undertaking 8,000 metres of exploration drilling at some of these targets beyond the mine site. At Upper Beaver the Company continues to evaluate different development scenarios with the adjacent operations and processing facilities that the Company owns along the Cadillac- Larder Lake break in Quebec and Ontario. At the Meliadine mine, the Company expects to spend approximately $12.3 million for 53,100 metres of capitalized drilling with a focus on conversion drilling at the Tiriganiaq, Pump, Normeg, Wesmeg and F-Zone deposits, and $2.4 million for further development of the exploration drift. An additional $1.9 million is budgeted for 10,100 metres of exploration drilling of the Tiriganiaq, Normeg, Wesmeg and F-Zone deposits. 34 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS At the Meadowbank Complex, the Company expects to spend approximately $8.4 million for 32,000 metres of expensed exploration drilling focused on testing open-pit and depth extensions of mineralization and the potential for further underground deposits at the Amaruq satellite operation. The Company expects to spend an additional $6.7 million for 8,000 metres of drilling to investigate for new, near-surface satellite deposits close to the road and infrastructure around the Meliadine and Meadowbank/Amaruq operations. At the Hope Bay property, the Company expects to complete 72,200 metres of drilling in a $30.6 million exploration program that will include 30,800 metres of underground exploration drilling at the Doris deposit to explore the extensions of mineralization and to add mineral reserves and mineral resources in the BTD zone to the north and in the BCO, BCN and West Valley zones below the dike. The Company expects to spend $17.3 million for 41,400 metres of surface drilling into exploration targets around the Doris deposit, between the Doris and Madrid deposits, and around the Madrid deposit with the objective of adding mineral reserves and mineral resources to the project. At the Fosterville mine, the Company expects to spend approximately $20.7 million for 105,300 metres of capitalized drilling and the development of exploration drifts to replace mineral reserve depletion and to add mineral resources in the Cygnet, Lower Phoenix and Robbins Hill areas. $4.5 million is budgeted for 11,300 metres of underground and surface expensed exploration with the aim of discovering additional high-grade mineralization at the Fosterville mine. An additional $1.3 million is budgeted for regional exploration on properties surrounding the Fosterville mine and $3.3 million is budgeted for 4,000 metres of drilling in the Northern Territory mostly to test new targets at Pine Creek, Maud Creek, Mt Paqualin and Union Reefs. At the Kittila mine, the Company expects to spend approximately $10.7 million for 68,500 metres of drilling focused on the Main zone in the Roura and Rimpi areas as well as the Sisar zone. The drilling includes 53,000 metres of capitalized conversion drilling at the mine as described above and 15,500 metres of expensed exploration drilling. The expensed drilling will be focused on targets beyond the current mineral reserve area, especially from 1,500 to 2,000 metres depth and at shallower depths in the area north of the mine. At the Pinos Altos mine, the Company expects to spend approximately $6.5 million for 11,000 metres of capitalized drilling and 21,500 metres of expensed exploration drilling. The two main objectives of the exploration drilling are to continue to infill and expand the mineral resource at Cubiro, and to test the depth potential of the Cerro Colorado, Santo Nino and Reyna East zones and other targets on the property. At the Santa Gertrudis project, the Company expects to spend $7.3 million for 10,000 metres of exploration drilling. In other regional exploration in Mexico, the Company expects to spend approximately $8.5 million for work that will include 3,000 metres of expensed drilling. Exploration programs are designed to infill and expand known deposits and test other favourable target areas that could ultimately supplement the Company’s existing production profile. Exploration is success-driven and thus planned exploration could change materially based on the interim results of the various exploration programs. When it is determined that a project can generate future economic benefit, the costs of drilling and development to further delineate the ore body on such a property are capitalized. In 2023, the Company expects to capitalize approximately $123.4 million of drilling and development costs related to further delineating ore bodies and converting mineral resources into mineral reserves. Amortization of Property, Plant and Mine Development Amortization of property, plant and mine development expense is expected to be between $1,360.0 million and $1,410.0 million in 2023 compared with $1,094.7 million in 2022. Other Expenses General and administrative expenses are expected to be between $175.0 million and $195.0 million in 2023 compared with $220.9 million in 2022. In 2023, the Company expects additional expenses to be between $35.0 million and $40.0 million related to site maintenance costs at the Hope Bay project, Holt mining complex and Northern Territory in Australia, and other expenses to be between $10.0 million and $15.0 million related to sustainable development activities in the Abitibi region of Quebec. Capital Expenditures Capital expenditures, including sustaining capital, construction and development costs and capitalized exploration costs, are expected to total approximately $1,539.0 million in 2023. The Company expects to fund its 2023 capital expenditures MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 35 through operating cash flow from the sale of its gold production and the associated by-product metals. Significant components of the expected 2023 capital expenditures program include the following: • $799.6 million in sustaining capital expenditures(i) relating to the Detour Lake mine ($233.8 million), Meadowbank Complex ($107.4 million), Canadian Malartic complex ($105.0 million – 50% portion attributable to the Company for the first quarter of 2023 and 100% for the remaining quarters of 2023), LaRonde Complex ($74.4 million), Fosterville mine ($53.7 million), Meliadine mine ($62.5 million), Kittila mine ($58.3 million), Macassa mine ($49.1 million), Goldex mine ($20.6 million), Pinos Altos mine ($18.3 million) and other projects ($16.5 million); • $616.0 million in development capital expenditures(i) relating to the Canadian Malartic complex ($133.4 million – 50% portion attributable to the Company for the first quarter of 2023 and 100% for the remaining quarters of 2023), Detour Lake mine ($116.5 million), Meliadine mine ($113.3 million), Macassa mine ($89.8 million), Goldex mine ($57.9 million), LaRonde Complex ($54.7 million), Kittila mine ($26.8 million), Fosterville mine ($17.7 million), Pinos Altos mine ($5.9 million); and • $123.4 million in capitalized exploration expenditures. The Company continues to examine other possible corporate development opportunities which may result in the acquisition of companies or assets using the Company’s securities, cash or a combination thereof. If cash is used to fund acquisitions, Agnico Eagle may be required to issue debt or securities to satisfy cash payment requirements. All-in Sustaining Costs per Ounce of Gold Produced The Company calculates all-in sustaining costs per ounce of gold produced on a by-product basis as the aggregate of total cash costs per ounce on a by-product basis, sustaining capital expenditures (including capitalized exploration), general and administrative expenses (including stock option expense), lease payments related to sustaining assets and reclamation expenses, and then dividing by the number of ounces of gold produced. The all-in sustaining costs per ounce of gold produced on a co-product basis is calculated in the same manner as the all-in sustaining costs per ounce of gold on a by-product basis, except that the total cash costs per ounce on a co-product basis is used, meaning no adjustment is made for by-product metal revenues. Agnico Eagle’s all-in sustaining costs per ounce of gold produced on a by-product basis are expected to be approximately $1,140 to $1,190 in 2023 compared with $1,109 in 2022. Risk Profile The Company is subject to significant risks due to the inherent nature of the business of exploration, development and mining of properties with precious metals. The risks described below are not the only ones facing the Company. The risk factors below may include details of how the Company seeks to mitigate these risks where possible. For a more comprehensive discussion of these inherent risks, see “Risk Factors” in our most recent Form 40-F/AIF on file with the SEC and Canadian provincial securities regulatory authorities. Impact of COVID-19 on the Company’s Business and Operations In December 2019, a novel strain of coronavirus known as COVID-19 surfaced in Wuhan, China and has spread around the world, with resulting business and social disruption. COVID-19 was declared a worldwide pandemic by the World Health Organization on March 11, 2020. The speed and extent of the spread of COVID-19 and its variants, and the duration and intensity of resulting business disruption and related financial and social impact, remain uncertain. While there has been a significant reduction in public health measures in 2022, the extent and manner in which COVID-19, and future measures taken by governments, the Company or others to attempt to reduce the spread of COVID-19 and its variants, may affect the Company cannot be predicted with certainty. COVID-19, its variants and these measures have had and may continue to have an adverse impact on many aspects of the Company’s business including, employee health, workforce productivity and availability, travel, contractor availability, availability of supplies, ability to sell or deliver gold doré bars or concentrate, the Company’s ability to maintain its controls and procedures regarding financial and disclosure matters and the availability of insurance and the costs thereof. Some of (i) (i) Sustaining capital expenditure and development capital expenditures are non-GAAP measures that are not standardized financial measures under the financial reporting framework used to prepare the Company’s financial statements. For a reconciliation to total capital expenditures see “Non-GAAP Financial Performance Measures” below. See also “Note to Investors Concerning Certain Measures of Performance”. Sustaining capital expenditure and development capital expenditures are non-GAAP measures that are not standardized financial measures under the financial reporting framework used to prepare the Company’s financial statements. For a reconciliation to total capital expenditures see “Non-GAAP Financial Performance Measures” below. See also “Note to Investors Concerning Certain Measures of Performance”. 36 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS these impacts, individually or when aggregated with other impacts, may be material to the Company. Measures taken by governments, the Company or others in relation to COVID-19 and its variants has, and could again, result in the Company reducing or suspending operations at one or more of its mines. In December 2021, the Company experienced an increase in COVID-19 cases at its Nunavut operations given the increased spread and transmission of the Omicron variant of COVID-19. The Company took precautionary steps to protect the continued health of its Nunavut based workforce (“Nunavummiut”) and local residents in the communities in which they live. In collaboration with the Nunavut public health authorities, the Company sent home the Nunavummiut from its Meliadine, Meadowbank and Hope Bay operations as well as its Nunavut exploration projects. Activities at the Meliadine mine were affected until mid-January 2022 and activities at the Meadowbank complex were affected until early February 2022. The Company worked with the Nunavut public health authorities on a reintegration plan and the process to return the Nunavummiut to the Company’s Nunavut operations was completed in early April 2022. Both operations are now back to operating at normal levels. In 2022, all sites are maintaining health and safety protocols but the impact appears to becoming more manageable as the virus continues to evolve into milder variant strains. Financial Instruments The Company’s principal financial liabilities are comprised of accounts payable and accrued liabilities, long-term debt and derivative financial instruments. The Company uses these financial instruments to manage its cash flows which are used to support ongoing operations and future growth. The Company’s principal financial assets are comprised of cash and cash equivalents, trade receivables, equity securities and derivative financial instruments, including share purchase warrants. Cash and cash equivalents and trade receivables are generated by the Company’s operations. Equity securities and share purchase warrants are generally strategic investments made in other mining companies. Using financial instruments exposes the Company to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate risk, commodity price risk and foreign currency risk, as discussed below). Credit risk is the risk that the counterparties to financial contracts will fail to perform on an obligation to the Company. Credit risk is partially mitigated by dealing with what the Company believes to be high quality counterparties such as major banks and limiting concentration risk. Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company attempts to mitigate liquidity risk primarily by monitoring its debt rating and the maturity dates of existing debt and other payables. Market risk is the risk that changes in market factors, such as interest rates, commodity prices and foreign exchange rates, will affect the value of Agnico Eagle’s financial instruments. The following table sets out a summary of the Company’s financial instruments(i) as at December 31, 2022: Financial Instrument Cash and cash equivalents Short-term investments Trade receivables Loans receivable Equity securities Share purchase warrants Fair value of derivative financial instruments Accounts payable and accrued liabilities Fair value of derivative financial instruments Long-term debt Lease obligations Carrying Value Associated Risks 658,625 Credit, Market 9,896 8,579 3,939 Credit, Market Credit, Market Credit, Market 304,618 Liquidity, Market 28,124 Liquidity, Market 8,774 (672,503) (78,114) (1,342,070) (151,342) Market Liquidity Market Liquidity Market MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 37 Note: (i) See Note 6 and Note 20 in the consolidated annual financial statements for details on the Company’s financial instruments, fair value measurements and financial risk management. Interest Rates The Company’s current exposure to market risk for changes in interest rates relates primarily to drawdowns on its Credit Facility and its investment portfolio. Drawdowns on the Credit Facility are used primarily to fund a portion of the capital expenditures related to the Company’s development projects and working capital requirements. As at December 31, 2022, there were no amounts outstanding on the Company’s Credit Facility. In addition, the Company invests its cash in investments with short maturities or with frequent interest reset terms and a credit rating of R1-High or better. As a result, the Company’s interest income fluctuates with short-term market conditions. As at December 31, 2022, short-term investments were $9.9 million. Amounts drawn under the Credit Facility are subject to floating interest rates based on benchmark rates available in the United States and Canada or on LIBOR (or its replacement). In the past, the Company has entered into derivative instruments to hedge against unfavourable changes in interest rates. The Company will continue to monitor its interest rate exposure and may enter into such agreements to manage its exposure to fluctuating interest rates. Commodity Prices and Foreign Currencies Agnico Eagle’s net income is sensitive to metal prices and the US dollar/Canadian dollar, US dollar/Australian dollar, US dollar/Euro and US dollar/Mexican peso exchange rates. Changes in the market price of gold may be attributed to numerous factors such as demand, global mine production levels, central bank purchases and sales and investor sentiment. Changes in the market prices of other metals may be attributed to factors such as demand and global mine production levels. Changes in the market price of diesel may be attributed to factors such as supply and demand. Changes in exchange rates may be attributed to factors such as supply and demand for currencies and economic conditions in each country or currency area. In 2022, the ranges of metal prices, diesel prices and exchange rates were as follows: • Silver: $17.77 – $26.18 per ounce, averaging $21.73 per ounce; • Zinc: $2,680 – $4,582 per tonne, averaging $3,474 per tonne; • Copper: $6,995 – $10,730 per tonne, averaging $8,754 per tonne; • Diesel: C$1.03 – C$2.41 per litre, averaging C$1.62 per litre; • US dollar/Canadian dollar: C$1.24 – C$1.40 per $1.00, averaging C$1.30 per $1.00; • US dollar/Australian dollar: A$1.31 – A$1.62 per $1.00, averaging A$1.44 per $1.00. • US dollar/Euro: €0.87 – €1.05 per $1.00, averaging €0.95 per $1.00; and • US dollar/Mexican peso: 19.04 – 21.47 Mexican pesos per $1.00, averaging 20.11 Mexican pesos per $1.00 In order to mitigate the impact of fluctuating by-product metal prices, the Company occasionally enters into derivative financial instrument contracts under its Board-approved Risk Management Policies and Procedures. The Company has a long-standing policy of no forward gold sales. However, the policy does allow the Company to use other hedging strategies where appropriate to mitigate foreign exchange and by-product metal pricing risks. The Company occasionally buys put options, enters into price collars and enters into forward contracts to protect minimum by-product metal prices while maintaining full exposure to the price of gold. The Risk Management Committee has approved the strategy of using short-term call options in an attempt to enhance realized by-product metal prices. The Company’s policy does not allow speculative trading. The Company receives payment for all of its metal sales in US dollars and pays most of its operating and capital costs in Canadian dollars, Australian dollars, Euros, or Mexican pesos. This gives rise to significant currency risk exposure. The Company enters into currency hedging transactions under its Board-approved Foreign Exchange Risk Management Policies and Procedures to hedge part of its foreign currency exposure. The policy does not permit the hedging of translation exposure (that is, the gains and losses that arise from the accounting translation into US dollars of assets and liabilities denominated in other currencies), as it does not give rise to cash exposure. The Company’s foreign currency derivative financial instrument strategy includes the use of purchased puts, written calls, collars and forwards that are not held for speculative purposes. As at December 31, 2022, there were foreign exchange derivatives outstanding related to 38 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS $2,907.9 million of 2023 and 2024 expenditures. During the year ended December 31, 2022 the Company recognized a loss of $100.2 million on foreign exchange derivatives in the loss on derivative financial instruments line item of the consolidated statements of income. Cost Inputs The Company considers and may enter into risk management strategies to mitigate price risk on certain consumables, including diesel fuel. These strategies may include longer term purchasing contracts and financial and derivative instruments. As at December 31, 2022, there were derivative financial instruments outstanding relating to 19.0 million gallons of heating oil. During the year ended December 31, 2022 the Company recognized a gain of $18.5 million on heating oil derivatives in the loss on derivative financial instruments line item of the consolidated statements of income. Operational Risk The Detour Lake and Meliadine mines and the Meadowbank and LaRonde complexes were the Company’s most significant contributors in 2022 to the Company’s payable production of gold at 20.8%, 11.9%, 11.9% and 11.4%, respectively, and are expected to account for a significant portion of the Company’s payable production of gold in the future. Mining is a complex and unpredictable business and, therefore, actual payable production of gold ounces may differ from expectations. Adverse conditions affecting mining or milling may have a material adverse impact on the Company’s financial performance and results of operations. The Company anticipates using revenue generated by its operations to finance the capital expenditures required at its mine projects. Regulatory Risk The Company’s mining and mineral processing operations, exploration activities and properties are subject to the laws and regulations of federal, provincial, state and local governments in the jurisdictions in which the Company operates. These laws and regulations are extensive and govern prospecting, exploration, development, production, exports, taxes, labour standards, occupational health and safety, waste disposal and, among other things, tailings management, toxic substances, environmental protection, greenhouse gases, mine safety, reporting of payments to governments and other matters. Compliance with such laws and regulations increases the costs of planning, designing, drilling, developing, constructing, operating, managing, closing, reclaiming and rehabilitating mines and other facilities. New laws or regulations, amendments to current laws and regulations governing operations and activities on mining properties or more stringent implementation or interpretation thereof could have a material adverse effect on the Company, increase costs, cause a reduction in levels of production and delay or prevent the development of new mining properties. Regulatory enforcement, in the form of compliance or infraction notices, has occurred at some of the Company’s mines and, while the current risks related to such enforcement are not expected to be material, the risk of material fines or corrective action cannot be ruled out in the future. Controls Evaluation 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. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 39 There have been no significant changes in our internal controls during the year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting. Limitation on scope of design The Company acquired Kirkland during the year ended December 31, 2022. Financial information for this acquisition is included in this MD&A and in Note 5 to the consolidated annual financial statements. The CSA’s National Instrument 52-109 (“NI 52-109’’) and the SEC staff provide an exemption whereby companies undergoing acquisitions can exclude the acquired business in the year of acquisition from the scope of testing and assessment of design and operational effectiveness of internal controls over financial reporting. In accordance with NI 52-109 and SEC staff guidance, the Company’s management excluded Kirkland from management’s report on internal control over financial reporting for the year ending December 31, 2022. The tables below set out summary financial information for Kirkland included in the Company’s consolidated annual financial statements. Result of operations from Kirkland have been consolidated with those of the Company from February 8, 2022: (in thousands of United States Dollars) Revenues from mining operations Income before income and mining taxes Total current assets Total non-current assets Total current liabilities Total non-current liabilities February 8, 2022 – December 31, 2022 $2,161,140 $ 799,154 As at December 31, 2022 $ 518,710 $13,513,239 $ 228,310 $ 3,010,837 The Company’s management, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of its ICFR and DC&P as at December 31, 2022. Based on this evaluation, management concluded that the Company’s ICFR and DC&P were effective as at December 31, 2022. Outstanding Securities The following table sets out the maximum number of common shares that would be outstanding if all dilutive instruments outstanding at March 22, 2022 were exercised: Common shares outstanding Employee stock options Common shares held in a trust in connection with the Restricted Share Unit plan, Performance Share Unit plan and Long Term Incentive Plan Total 458,000,925 5,585,567 740,855 464,327,347 Critical IFRS Accounting Policies and Accounting Estimates The Company’s consolidated annual financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Agnico Eagle’s significant accounting policies including a summary of current and future changes in accounting policies are disclosed in Note 3 in the consolidated annual financial statements. The preparation of the consolidated annual financial statements in accordance with IFRS requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Critical accounting estimates have a reasonable likelihood that materially different amounts could be reported under different conditions or 40 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS using different assumptions. In making judgments about the carrying value of assets and liabilities, the Company uses estimates based on historical experience and assumptions that are considered reasonable in the circumstances. Although the Company evaluates its accounting estimates on an ongoing basis using the most current information available, actual results may differ from these estimates. The critical judgments and key sources of estimation uncertainties in the application of accounting policies during the year ended December 31, 2022 are disclosed in Note 4 to the consolidated annual financial statements. Management has discussed the development and selection of critical accounting policies and estimates with the Audit Committee which has reviewed the Company’s disclosure in this MD&A. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 41 Mineral Reserve Data The scientific and technical information contained in this MD&A other than regarding mineral reserves and mineral resources, relating to Nunavut, Quebec and Finland operations has been approved by Dominique Girard, Eng., Executive Vice President & Chief Operating Officer – Nunavut, Quebec & Europe; relating to Ontario, Australia and Mexico operations has been approved by Natasha Vaz, Executive Vice President & Chief Operating Officer – Ontario, Australia & Mexico; and relating to exploration has been approved by Guy Gosselin, Eng. and P.Geo., Executive Vice President, Exploration, each of whom is a “Qualified Person” for the purposes of NI 43-101. The scientific and technical information relating to Agnico Eagle’s mineral reserves and mineral resources contained herein (other than the Canadian Malartic complex) has been approved by Dyane Duquette, P.Geo., Vice President, Mineral Resources Management; relating to mineral reserves and mineral resources at the Canadian Malartic complex, has been approved by Patrick Fiset, Eng., Technical Services Manager at Canadian Malartic Corporation (for engineering open-pit), Sylvie Lampron, Eng., Senior Project Mine Engineer at Canadian Malartic Corporation (for engineering underground) and Pascal Lehouiller, P.Geo., Senior Resource Geologist at Canadian Malartic Corporation (for geology), each of whom is a “Qualified Person” for the purposes of NI 43-101. The assumptions used for the mineral reserve estimates at all mines and advanced projects held by Agnico Eagle on December 31, 2022 (except the Hope Bay project, Hammond Reef project, Akasaba West project and Upper Beaver project) are $1,300 per ounce gold, $18.00 per ounce silver, $1.00 per pound zinc and $3.00 per pound copper as at December 31, 2022. Mineral reserve estimates at the Hope Bay project and Hammond Reef project are $1,350 per ounce gold. Mineral reserve estimates at the Akasaba West project are $1,250 per ounce gold. Mineral reserves estimates at the Upper Beaver project are $1,200 per ounce of gold and $2.75 per pound of copper. Foreign exchange rates assumptions of C$1.30 per US$1.00, A$1.36 per US$1.00, €0.90 per US$1.00, and 18.00 Mexican pesos per US$1.00 were used for all mines and projects, except for C$1.25 per US$1.00 used for Upper Beaver, Upper Canada and Holt Complex, and Detour Zone 58N; CAD$1.11 per US$1.00 used for Aquarius; and €0.86 per US$1.00 used for Barsele. 42 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS The following table sets out the proven and probable mineral reserves for properties held by Agnico Eagle as of December 31, 2022: Proven and Probable Mineral Reserves by Property(i)(ii) Proven Mineral Reserves LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex (attributable 50.0%) Goldex mine Detour Lake mine Macassa mine Meadowbank Complex Meliadine mine Hope Bay project Fosterville mine Kittila mine Pinos Altos mine La India mine Total Proven Mineral Reserves Probable Mineral Reserves LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex (attributable 50.0%) Goldex mine Akasaba West project Detour Lake mine Macassa mine Meadowbank Complex Meliadine mine Hope Bay project Upper Beaver project Hammond Reef project Fosterville mine Kittila mine Pinos Altos mine Gold Grade (Grams per Tonne) Contained Gold (Ounces)(iii) (thousands) Tonnes (thousands) 2,809 4,904 25,802 607 107,622 135 1,892 1,015 93 608 1,224 2,673 14 149,399 9,497 5,490 27,564 17,820 5,419 742,795 3,803 14,718 18,449 16,232 7,992 123,473 5,955 26,029 7,630 5.23 2.08 0.7 2.89 0.91 15.33 2.14 5.77 6.77 23.19 4.36 2.08 0.39 1.2 6.69 2.17 1.16 1.58 0.84 0.73 15.1 4.30 6.03 6.49 5.43 0.84 6.39 4.20 1.98 473 327 579 56 3,133 66 130 188 20 453 171 178 – 5,776 2,042 383 1,025 906 147 17,551 1,846 2,034 3,578 3,389 1,395 3,323 1,224 3,512 486 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 43 Proven and Probable Mineral Reserves by Property(i)(ii) La India mine Total Probable Mineral Reserves Total Proven and Probable Mineral Reserves Gold Grade (Grams per Tonne) 0.76 1.29 1.28 Contained Gold (Ounces)(iii) (thousands) 81 42,921 48,697 Tonnes (thousands) 3,310 1,036,174 1,185,573 Amounts presented in this table have been rounded to the nearest thousand and therefore totals may differ slightly from the addition of the numbers. Notes: (i) (ii) Complete information on the verification procedures, quality assurance program, quality control procedures, expected payback period of capital, parameters and methods and other factors that may materially affect scientific and technical information presented in this MD&A and definitions of certain terms used herein may be found in: the AIF under the heading “Information on Mineral Reserves and Mineral Resources of the Company”; the Technical Report on the 2005 LaRonde Mineral Resource & Mineral Reserve Estimate filed with Canadian securities regulatory authorities on SEDAR on March 23, 2005; the Technical Report on the Mineral Resources and Mineral Reserves at Meadowbank Gold Complex including the Amaruq satellite deposit, Nunavut, Canada as at December 31, 2017 filed with Canadian securities regulatory authorities on SEDAR on February 14, 2018; the Updated Technical Report on the Meliadine Gold Project, Nunavut, Canada dated February 11, 2015 filed with Canadian securities regulatory authorities on SEDAR on March 12, 2015; the Technical Report on the Mineral Resource and Mineral Reserve Estimates for the Canadian Malartic property with an effective date of December 31, 2020 filed with the Canadian securities regulatory authorities on SEDAR on March 25, 2021; the Technical Report on the Mineral Resource and Mineral Reserve Estimates for the Detour Lake Operation as at July 26, 2021 filed with Canadian securities regulatory authorities on October 15, 2021, with an amended and restated date of October 19, 2021; and the Technical Report on the Mineral Resource and Mineral Reserve Estimates for the Fosterville Gold Mine in the State of Victoria, Australia as at December 31, 2018 filed on April 1, 2019. (iii) Total contained gold ounces does not include equivalent gold ounces for the by-product metals contained in the mineral reserves. 44 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Non-GAAP Financial Performance Measures This MD&A presents certain financial performance measures, including adjusted net income, adjusted net income per share, total cash costs per ounce of gold produced (on both a by-product and co-product basis), minesite costs per tonne, all-in sustaining costs per ounce of gold produced (on both a by-product and co-product basis), operating margin, realized prices, sustaining capital expenditures and development capital expenditures, that are not recognized measures under IFRS. These measures may not be comparable to similar measures reported by other gold producers. Non-GAAP financial performance measures should be considered together with other data prepared in accordance with IFRS. Refer to Note to Investors Concerning Certain Measures of Performance in this MD&A for details on the composition, usefulness and other information regarding such measures. Adjusted Net Income and Adjusted Net Income Per Share Refer to Note to Investors Concerning Certain Measures of Performance in this MD&A for details on the Company’s calculation and use of adjusted net income and adjusted net income per share. The following table sets out the calculation of adjusted net income and adjusted net income per share for the years ended December 31, 2022, December 31, 2021 and December 31, 2020. 2022 2021 2020 Net income for the year(i) Foreign currency translation (gain) loss Loss (gain) on derivative financial instruments Impairment loss Environmental remediation Severance and transaction costs related to acquisitions Integration costs Purchase price allocation to inventory Penna self-insurance for Meadowbank fire Gain on sale of non-strategic exploration properties Net loss on disposal of property, plant and equipment Multi-year health care donation Other(ii) Income and mining taxes adjustments(iii) Adjusted net income for the year Net income per share – basic Net income per share – diluted Adjusted net income per share – basic Adjusted net income per share – diluted (thousands of United States dollars) $561,945 $ 670,249 $ 511,607 (16,081) 90,692 55,000 10,417 95,035 956 158,510 6,500 5,672 11,103 – 576 12,943 – – – – (10,000) 22,480 (107,873) – 27,540 – – – – – 8,754 – 3,258 (79,737) 9,451 7,952 – 8,368 14,248 – 5,506 (21,940) $1,003,553 $608,010 $ 451,568 $ $ $ $ 1.53 1.53 2.29 2.28 $ $ $ $ 2.31 2.30 2.49 2.48 $ $ $ $ 2.12 2.10 1.87 1.86 Notes: (i) Net income for the year ended December 31, 2021, has been restated to reflect the retrospective application of IAS 16. (ii) The Company includes certain adjustments in “Other” that are not individually significant to the extent that management believes that these items are not reflective of the underlying performance of the Company’s core operating business. In 2022, other expenses were primarily comprised of disposals of supplies inventory at non-operating sites. In 2020, other expenses are comprised of temporary suspension costs incurred during the period of limited or no production activity due to COVID-19 and interest on the Credit Facility, which was drawn down as a cautionary measure in the uncertain economic environment in the first quarter of 2020 resulting from the onset of the COVID-19 pandemic. (iii) Income and mining taxes adjustments reflect items such as foreign currency translation recorded to the income and mining taxes expense, the impact of income and mining taxes on adjusted items, recognition of previously unrecognized capital losses, the result of income and mining taxes audits, impact of tax law changes and adjustments to prior period tax filings. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 45 Total Cash Costs per Ounce of Gold Produced and Minesite Costs per Tonne Refer to Note to Investors Concerning Certain Measures of Performance in this MD&A for details on the composition, usefulness and other information regarding the Company’s use of the non-GAAP measures total cash costs per ounce of gold produced and minesite costs per tonne. 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 consolidated statements of income in accordance with IFRS. Total Production Costs by Mine (thousands of United States dollars) LaRonde mine LaRonde Zone 5 mine LaRonde Complex Canadian Malartic complex(i) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 $ 213,393 $ 232,392 $ 169,824 72,096 285,489 235,735 103,830 318,141 442,681 – 210,661 489,703 129,774 204,649 144,489 1,943 76,226 56,380 288,772 242,589 96,181 250,822 408,863 83,118 192,742 – – – 141,488 8,165 60,381 47,899 217,723 195,312 82,654 245,700 284,976 – 169,884 – – – 124,678 35,088 68,137 Production costs per the consolidated statements of income $2,643,321 $1,773,121 $1,424,152 46 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Reconciliation of Production Costs to Total Cash Costs per Ounce of Gold Produced by Mine and Reconciliation of Production Costs to Minesite Costs per Tonne by Mine (thousands of United States dollars, except as noted) LaRonde Mine Per Ounce of Gold Produced Gold production (ounces) Production costs Inventory adjustments(ii) Realized gains and losses on hedges of production costs Operational care and maintenance due to COVID-19(iii) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 284,780 308,946 288,239 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 213,393 $ 749 $ 232,392 $ 752 $ 169,824 $ 6,569 6,879 – 15,331 23 24 – 54 (19,807) (64) 7,906 (9,923) (32) (2,886) – 18,905 – 61 (2,464) 13,034 $ 242,172 (64,654) $ 177,518 $ $ 850 $ 221,567 (227) (74,499) 623 $ 147,068 $ $ 717 $ 185,414 (241) (51,217) 476 $ 134,197 $ $ 589 27 (10) (9) 46 643 (177) 466 LaRonde Mine Per Tonne Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore milled (thousands of tonnes) 1,670 1,837 1,706 Production costs Production costs (C$) Inventory adjustments (C$)(ii) Operational care and maintenance due to COVID-19 (C$)(iii) Other adjustments (C$)(vi) (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) $ 213,393 C$ 278,014 5,360 – $ C$ 128 166 $ 232,392 C$ 291,681 $ C$ 3 – (21,969) – (12,208) (7) (11,921) 127 159 (12) – (7) $ 169,824 C$ 226,605 6,385 $ C$ (2,368) (13,710) 100 133 3 (1) (8) Minesite costs (C$) C$ 271,166 C$ 162 C$ 257,791 C$ 140 C$ 216,912 C$ 127 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 47 LaRonde Zone 5 Mine Per Ounce of Gold Produced Gold production (ounces) Production costs Inventory adjustments(ii) Realized gains and losses on hedges of production costs Operational care and maintenance due to COVID-19(iii) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 71,557 70,788 61,674 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 72,096 $ 1,008 $ 56,380 $ 796 $ 47,899 $ 777 (503) 1,602 – 136 (7) 22 – 2 2,009 (2,346) – 171 28 (32) – 2 (117) (681) (465) 167 $ $ 73,331 (259) 73,072 $ $ 1,025 (4) 1,021 $ $ 56,214 (288) 55,926 $ $ 794 (4) 790 $ $ 46,803 (261) 46,542 $ $ (2) (11) (8) 3 759 (4) 755 LaRonde Zone 5 Mine Per Tonne Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore milled (thousands of tonnes) 1,146 1,124 968 (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) Production costs Production costs (C$) Inventory adjustments (C$)(ii) Operational care and maintenance due to COVID-19 (C$)(iii) $ 72,096 C$ 93,655 $ C$ (289) – Minesite costs (C$) C$ 93,366 C$ 63 82 (1) – 81 $ 56,380 C$ 70,770 2,447 $ C$ – C$ 73,217 C$ 50 63 2 – 65 $ 47,899 C$ 63,944 $ C$ (201) (653) C$ 63,090 C$ 49 66 – (1) 65 LaRonde Complex Per Ounce of Gold Produced Gold production (ounces) Production costs Inventory adjustments(ii) Realized gains and losses on hedges of production costs Operational care and maintenance due to COVID-19(iii) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 356,337 379,734 349,913 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 285,489 $ 801 $ 288,772 $ 760 $ 217,723 $ 6,066 8,481 – 15,467 17 24 – 43 (17,798) (47) 7,789 (12,269) (32) (3,567) – 19,076 – 51 (2,929) 13,201 $ 315,503 (64,913) $ 250,590 $ $ 885 $ 277,781 (182) (74,787) 703 $ 202,994 $ $ 732 $ 232,217 (197) (51,478) 535 $ 180,739 $ $ 622 22 (10) (8) 38 664 (147) 517 48 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS LaRonde Complex Per Tonne Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore milled (thousands of tonnes) 2,816 2,961 2,674 (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) Production costs Production costs (C$) Inventory adjustments (C$)(ii) Operational care and maintenance due to COVID-19 (C$)(iii) Other adjustments (C$)(vi) $ 285,489 C$ 371,669 5,071 – $ C$ 101 132 $ 288,772 C$ 362,451 $ C$ 98 $ 217,723 122 C$ 290,549 $ C$ 1 – (19,522) – (6) – (4) 6,184 (3,021) (13,710) (12,208) (4) (11,921) 81 109 2 (1) (5) Minesite costs (C$) C$ 364,532 C$ 129 C$ 331,008 C$ 112 C$ 280,002 C$ 105 Canadian Malartic Complex(i) Per Ounce of Gold Produced(vii) Gold production (ounces) Production costs Inventory adjustments(ii) Realized gains and losses on hedges of production costs Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 329,396 357,392 265,387 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 235,735 $ 716 $ 242,589 $ 679 $ 195,312 $ 736 (1,867) (6) 1,213 – 30,568 – 93 (78) 557 3 – 2 (319) 3,385 789 $ 264,436 (5,087) $ 259,349 $ $ 803 $ 244,281 (16) (7,233) 787 $ 237,048 $ $ 684 $ 199,167 (21) (7,198) 663 $ 191,969 $ $ (2) 13 3 750 (27) 723 Canadian Malartic Complex(i) Per Tonne(viii) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore milled (thousands of tonnes) 9,770 11,130 9,669 (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) Production costs Production costs (C$) Inventory adjustments (C$)(ii) Other adjustments (C$)(vi) $ 235,735 C$ 302,734 $ C$ 902 35,981 24 31 – 4 $ 242,589 C$ 307,005 $ C$ 2,042 – 22 28 – – $ 195,312 C$ 260,019 $ C$ (34) – Minesite costs (C$) C$ 339,617 C$ 35 C$ 309,047 C$ 28 C$ 259,985 C$ 20 27 – – 27 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 49 Goldex Mine Per Ounce of Gold Produced Gold production (ounces) Production costs Inventory adjustments(ii) Realized gains and losses on hedges of production costs Operational care and maintenance due to COVID-19(iii) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 141,502 134,053 127,540 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 103,830 $ 734 $ 96,181 $ 717 $ 82,654 $ 1,227 3,048 – 199 $ 108,304 (48) $ 108,256 $ $ 9 21 – 1 765 – 765 (264) (2) 75 (4,407) (33) (1,391) – 206 $ $ 91,716 (42) 91,674 $ $ – 2 684 – 684 (610) 170 80,898 (37) 80,861 $ $ $ $ 648 1 (11) (5) 1 634 – 634 Goldex Mine Per Tonne Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore milled (thousands of tonnes) 2,940 2,874 2,655 Production costs Production costs (C$) Inventory adjustments (C$)(ii) Operational care and maintenance due to COVID-19 (C$)(iii) Minesite costs (C$) Meliadine Mine Per Ounce of Gold Produced(ix) Gold production (ounces) Production costs Inventory adjustments(ii) Realized gains and losses on hedges of production costs IAS 16 amendments(iv) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) $ 103,830 C$ 135,084 1,818 $ C$ – C$ 136,902 C$ 35 46 1 – 47 $ 96,181 C$ 120,667 $ C$ (374) – 33 42 – – $ 82,654 C$ 109,727 $ C$ 44 (331) 31 41 – – C$ 120,293 C$ 42 C$ 109,440 C$ 41 Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 372,874 367,630 312,398 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 318,141 $ 853 $ 250,822 $ 682 $ 245,700 $ 653 3,500 – 313 2 9 – 1 9,686 26 (3,995) (12,674) (14,059) 252 (34) (38) 1 433 – 209 $ 322,607 (753) $ 321,854 $ $ 865 $ 234,027 (2) (808) 863 $ 233,219 $ $ 637 $ 242,347 (3) (527) 634 $ 241,820 $ $ 786 (12) 1 – 1 776 (2) 774 50 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Meliadine Mine Per Tonne(x) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore milled (thousands of tonnes) 1,757 1,501 1,346 Production costs Production costs (C$) Inventory adjustments (C$)(ii) IAS 16 amendments (C$)(iv) (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) $ 318,141 C$ 407,871 $ C$ 2,510 – 181 232 2 – $ 250,822 C$ 315,720 $ C$ 11,784 (17,706) 167 210 7 (11) $ 245,700 C$ 329,036 $ C$ (5,458) – 183 244 (4) – Minesite costs (C$) C$ 410,381 C$ 234 C$ 309,798 C$ 206 C$ 323,578 C$ 240 Meadowbank Complex Per Ounce of Gold Produced(xi) Gold production (ounces) Production costs Inventory adjustments(ii) Realized gains and losses on hedges of production costs Operational care and maintenance due to COVID-19(iii) IAS 16 amendments(iv) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 373,785 322,852 198,418 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 442,681 $ 1,184 $ 408,863 $ 1,266 $ 284,976 $ 1,436 14,807 40 (548) (2) (4,975) (1,691) (1,436) – 34 (4) (4) – – (14,256) (44) 5,505 (2,612) (2,374) 1,117 (8) (7) 4 (5,749) – 191 (25) 28 (29) – 1 $ 454,395 (2,127) $ 452,268 $ $ 1,216 $ 390,190 (6) (2,414) 1,210 $ 387,776 $ $ 1,209 $ 279,948 (8) (1,342) 1,201 $ 278,606 $ $ 1,411 (7) 1,404 Meadowbank Complex Per Tonne(xii) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore milled (thousands of tonnes) 3,739 3,556 2,482 (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) Production costs Production costs (C$) Inventory adjustments (C$)(ii) Operational care and maintenance due to COVID-19 (C$)(iii) IAS 16 amendments (C$)(vi) $ 442,681 C$ 574,895 12,203 (1,793) – $ C$ 118 154 $ 408,863 C$ 515,800 $ C$ 3 – – (982) (3,326) (2,995) 115 145 – (1) (1) $ 284,976 C$ 382,592 $ C$ 115 154 (6,691) (7,716) – (3) (3) – Minesite costs (C$) C$ 585,305 C$ 157 C$ 508,497 C$ 143 C$ 368,185 C$ 148 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 51 Hope Bay Project Per Ounce of Gold Produced Gold production (ounces) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 – 56,229 103,652 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) Production costs Inventory adjustments(ii) Operational care and maintenance due to COVID-19(iii) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) $ $ $ – – – – – – – $ $ $ Hope Bay Project Per Tonne Year Ended December 31, 2022 Tonnes of ore milled (thousands of tonnes) – – – – – – – – $ 83,118 $ 1,478 $ 88,289 $ (13,713) (244) 5,160 (9,964) 374 59,815 (46) 59,769 $ $ (177) 7 1,064 (1) 1,063 $ $ – 575 $ $ 94,024 (96) 93,928 $ $ 852 50 – 5 907 (1) 906 Year Ended December 31, 2021 Year Ended December 31, 2020 228 383 Production costs Production costs (C$) Inventory adjustments (C$)(ii) Operational care and maintenance due to COVID-19 (C$)(iii) Minesite costs (C$) Kittila Mine Per Ounce of Gold Produced Gold production (ounces) Production costs Inventory adjustments(ii) Realized gains and losses on hedges of production costs Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) $ C$ C$ – – – – – $ C$ C$ – – – – – $ 83,118 C$ 104,291 $ C$ (17,801) (12,304) 365 457 (78) (53) $ 88,289 C$ 118,412 6,921 $ C$ – 231 309 18 – C$ 74,186 C$ 326 C$ 125,333 C$ 327 Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 216,947 239,240 208,125 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 210,661 $ 971 $ 192,742 $ 806 $ 169,884 $ (5,349) (25) 5,908 7,329 274 34 1 577 705 25 2 3 (2,098) (662) 639 $ 212,915 (295) $ 212,620 $ $ 981 $ 199,932 (1) (249) 980 $ 199,683 $ $ 836 $ 167,763 (1) (238) 835 $ 167,525 $ $ 816 (10) (3) 3 806 (1) 805 52 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Kittila Mine Per Tonne Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore milled (thousands of tonnes) 1,925 2,052 1,702 Production costs Production costs (€) Inventory adjustments (€)(ii) Minesite costs (€) Detour Lake Mine Per Ounce of Gold Produced Gold production (ounces) (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) $ 210,661 € 198,484 (3,853) € 194,631 $ € € 109 103 (2) $ 192,742 € 163,165 5,330 101 € 168,495 $ € € Year Ended December 31, 2022 Year Ended December 31, 2021 651,182 94 80 2 82 – $ 169,884 € 147,993 (1,667) € 146,326 $ € € 100 87 (1) 86 Year Ended December 31, 2020 – (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) Production costs $ 489,703 $ 752 $ Inventory adjustments(ii) Purchase price allocation to inventory(v) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) (8,195) (74,509) 24,483 $ 431,482 (3,712) $ 427,770 $ $ (13) (113) 37 663 (6) 657 $ $ – – – – – – – $ $ $ Detour Lake Mine Per Tonne Year Ended December 31, 2022 Year Ended December 31, 2021 Tonnes of ore milled (thousands of tonnes) 22,782 $ $ $ – – – – – – – – – – – – – – – $ $ $ Year Ended December 31, 2020 – – – – – – – – (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) Production costs Production costs (C$) Inventory adjustments (C$)(ii) Purchase price allocation to inventory (C$)(v) Other adjustments (C$)(vi) $ 489,703 C$ 637,567 $ C$ (8,782) (95,791) 31,917 Minesite costs (C$) C$ 564,911 C$ 21 28 – (4) 1 25 $ C$ C$ – – – – – – $ C$ C$ – – – – – – $ C$ C$ – – – – – – $ C$ C$ – – – – – – MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 53 Macassa Mine Per Ounce of Gold Produced Gold production (ounces) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 180,833 – – (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) Production costs $ 129,774 $ 718 $ Inventory adjustments(ii) Purchase price allocation to inventory(v) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) 38 (10,326) 4,237 $ 123,723 (298) $ 123,425 $ $ – (57) 23 684 (1) 683 $ $ – – – – – – – $ $ $ Macassa Mine Per Tonne Year Ended December 31, 2022 Year Ended December 31, 2021 Tonnes of ore milled (thousands of tonnes) 280 $ $ $ – – – – – – – – – – – – – – – $ $ $ Year Ended December 31, 2020 – – – – – – – (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) Production costs Production costs (C$) Inventory adjustments (C$)(ii) Purchase price allocation to inventory (C$)(v) Other adjustments (C$)(vi) $ 129,774 C$ 168,400 $ C$ 533 (13,248) 5,538 $ C$ 463 602 2 (47) 20 Minesite costs (C$) C$ 161,223 C$ 577 C$ – – – – – – $ C$ C$ Fosterville Mine Per Ounce of Gold Produced Gold production (ounces) Year Ended December 31, 2022 Year Ended December 31, 2021 338,327 – – – – – – – $ C$ C$ – – – – – – $ C$ C$ Year Ended December 31, 2020 – – – – – – – Production costs Inventory adjustments(ii) Purchase price allocation to inventory(v) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 204,649 (2,691) (73,674) $ 128,284 (527) $ 127,757 $ $ $ 605 $ (8) (218) 379 (1) 378 $ $ – – – – – – $ $ $ – – – – – – $ $ $ – – – – – – $ $ $ – – – – – – 54 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Fosterville Mine Per Tonne Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore milled (thousands of tonnes) 524 – – (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) Production costs Production costs (A$) $ 204,649 A$ 293,875 $ A$ Inventory adjustments (A$)(ii) Purchase price allocation to inventory (A$)(v) (3,045) (104,507) $ A$ 391 561 (6) (199) Minesite costs (A$) A$ 186,323 A$ 356 A$ – – – – – $ A$ A$ – – – – – $ A$ A$ – – – – – $ A$ A$ – – – – – Pinos Altos Mine Per Ounce of Gold Produced Gold production (ounces) Production costs Inventory adjustments(ii) Realized gains and losses on hedges of production costs Operational care and maintenance due to COVID-19(iii) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 96,522 126,932 114,798 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 144,489 $ 1,497 $ 141,488 $ 1,115 $ 124,678 $ 1,086 (2,295) (24) 241 2 (3,955) (879) (9) (2,515) (20) 477 – 1,235 – 13 – 1,627 – 13 (2,782) 2,171 (34) 4 (25) 19 $ 142,550 (21,983) $ 120,567 $ $ 1,477 $ 140,841 (228) (31,965) 1,249 $ 108,876 $ $ 1,110 $ 120,589 (252) (34,646) 858 $ 85,943 $ $ 1,050 (301) 749 Pinos Altos Mine Per Tonne Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore processed (thousands of tonnes) 1,510 1,899 1,796 (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) Production costs Inventory adjustments(ii) Operational care and maintenance due to COVID-19(iii) $ 144,489 $ 96 $ 141,488 $ 75 $ 124,678 $ (2,295) – (2) – 94 241 – – – (3,955) (2,782) $ 141,729 $ 75 $ 117,941 $ 69 (2) (1) 66 Minesite costs $ 142,194 $ MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 55 Creston Mascota Mine Per Ounce of Gold Produced Gold production (ounces) Production costs Inventory adjustments(ii) Operational care and maintenance due to COVID-19(iii) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 2,630 12,801 38,599 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 1,943 $ 739 $ 8,165 $ 638 $ 35,088 $ 222 – 78 84 – 30 $ $ 2,243 (158) 2,085 $ $ 853 (60) 793 $ $ (349) (27) (1,957) – 327 8,143 (2,914) 5,229 $ $ – 25 636 (228) 408 (517) 852 $ $ 33,466 (10,116) 23,350 $ $ 909 (51) (13) 22 867 (262) 605 Creston Mascota Mine Per Tonne(xiii) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore processed (thousands of tonnes) – – 526 (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) Production costs Inventory adjustments(ii) Operational care and maintenance due to COVID-19(iii) Other adjustments(vi) $ 1,943 $ 222 – (2,165) Minesite costs $ – $ – – – – – $ 8,165 $ (349) – (7,816) $ – $ – – – – – $ 35,088 $ (1,957) (517) (4,362) $ 28,252 $ 67 (4) (1) (8) 54 La India Mine Per Ounce of Gold Produced Gold production (ounces) Production costs Inventory adjustments(ii) Operational care and maintenance due to COVID-19(iii) Other adjustments(vi) Total cash costs (co-product basis) By-product metal revenues Total cash costs (by-product basis) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 74,672 63,529 84,974 (thousands) ($ per ounce) (thousands) ($ per ounce) (thousands) ($ per ounce) $ 76,226 $ 1,021 $ 60,381 $ 950 $ 68,137 $ 802 3,598 – 699 48 – 9 98 – 458 2 – 7 $ $ 80,523 (1,689) 78,834 $ $ 1,078 (22) 1,056 $ $ 60,937 (1,298) 59,639 $ $ 959 (20) 939 $ $ (295) (600) 1,036 68,278 (1,317) 66,961 $ $ (3) (8) 12 803 (15) 788 56 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS La India Mine Per Tonne Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Tonnes of ore processed (thousands of tonnes) 5,102 6,018 5,526 (thousands) ($ per tonne) (thousands) ($ per tonne) (thousands) ($ per tonne) Production costs Inventory adjustments(ii) Operational care and maintenance due to COVID-19(iii) $ 76,226 $ 3,598 – Minesite costs $ 79,824 $ 15 1 – 16 $ 60,381 $ 10 $ 68,137 $ 98 – – – (295) (600) $ 60,479 $ 10 $ 67,242 $ 12 – – 12 The information set out in this table reflects the Company’s 50% interest in the Canadian Malartic complex. Notes: (i) (ii) 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 the 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. (iii) This adjustment reflects the costs associated with the temporary suspension of mining activities at the Company’s mine sites in response to the COVID-19 pandemic and includes primarily payroll and other incidental costs associated with maintaining the sites and properties, and payroll costs associated with employees who were not working during the period of reduced or suspended operations. These expenses also include payroll costs of employees who could not work following the period of temporary suspension or reduced operations due to the Company’s effort to prevent or curtail community transmission of COVID-19. These costs were previously classified as “other adjustments” and have now been disclosed separately to provide additional detail on the reconciliation, allowing investors to better understand the impacts of such events on the total cash costs per ounce and minesite cost per tonne. (iv) Amendments to IAS 16 issued by the IASB in 2020 clarified that entities were prohibited from deducting amounts received from selling items produced from the cost of property, plant and mine development while the Company is preparing the asset for its intended use. Instead, sales proceeds and the cost of producing these items must be recognized in the consolidated statements of income. The amendments are effective for annual reporting periods beginning on or after January 1, 2022. The amendments apply retrospectively, but only to assets brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the Company first applies the amendments. The Company adopted the standard on the effective date and applying it retrospectively to the fiscal year beginning January 1, 2021. For the year ended December 31, 2021, the Company has made an adjustment for these IAS 16 amendments to calculations of cash costs per ounce of gold produced (on both a by-product and co-product basis) and minesite costs per tonne of ore to ensure the measures for this year are comparable to the measures as calculated for prior years. No adjustment for the IAS 16 amendments were made in respect of these measures for the year ended December 31, 2022. If such adjustments were made, total cash costs (on both a co-product and by-product basis) at the Meadowbank complex would decrease by $6.6 million in aggregate and $6 per ounce of gold produced and minesite costs at the Meadowbank complex would decrease by C$8.6 million in aggregate and C$1 per tonne of ore milled. Accordingly, for the year ended December 31, 2022 consolidated total cash costs (on both co-product and by-product basis) would reduce by $6.6 million in aggregate and $1 per ounce. (v) On February 8, 2022, the Company closed the Merger with Kirkland and this adjustment reflects the fair value allocated to inventory on the purchase price allocation. (vi) Other adjustments consists of costs associated with a 5% in-kind royalty paid in respect of the Canadian Malartic complex, a 2% in-kind royalty paid in respect of the Detour Lake mine, a 1.5% in-kind royalty paid in respect of the Macassa mine and smelting, refining, and marketing charges to production costs. (vii) The Canadian Malartic complex’ cost calculations per ounce of gold produced for the year ended December 31, 2020 exclude 18,930 ounces of payable production of gold which were produced prior to the achievement of commercial production at the Barnat deposit on September 30, 2020. (viii) The Canadian Malartic complex’ cost calculations per tonne for the year ended December 31, 2020 exclude 731,309 tonnes of ore which were processed prior to the achievement of commercial production at the Barnat deposit on September 30, 2020. (ix) The Meliadine mine’s cost calculations per ounce of gold produced for the year ended December 31, 2021 exclude 24,057 ounces of payable production of gold which were produced prior to the achievement of commercial production at the Tiriganiaq open pit deposit on August 15, 2021. The Meliadine mine’s cost calculations per ounce of gold produced for the year ended December 31, 2020 exclude 6,491 ounces of payable production of gold which were produced prior to the achievement of commercial production at the Tiriganiaq open pit deposit on August 15, 2021. The Meliadine mine’s cost calculations per tonne for the year ended December 31, 2021 exclude 213,867 tonnes of ore which were processed prior to the achievement of commercial production at the Tiriganiaq open pit deposit on August 15, 2021. The Meliadine mine’s cost calculations per tonne for the year ended December 31, 2020 exclude 49,504 tonnes which were processed prior to the achievement of commercial production at the Tiriganiaq open pit deposit on August 15, 2021. (x) (xi) The Meadowbank Complex’s cost calculations per ounce of gold produced for the year ended December 31, 2021 exclude 1,956 ounces of payable production of gold which were produced prior to the achievement of commercial production at the Amaruq underground project on August 1, 2022. The Meadowbank Complex’s cost calculations per ounce of gold produced for the year ended December 31, 2020 exclude 10,995 ounces of payable production of gold which were produced prior to the achievement of commercial production at the IVR deposit on December 31, 2020. (xii) The Meadowbank Complex’s cost calculations per tonne for the year ended December December 31, 2021 exclude 14,299 tonnes of ore which were processed prior to the achievement of commercial production at the Amaruq underground project on August 1, 2022. The Meadowbank Complex’s cost calculations per tonne for the year ended December 31, 2020 exclude 121,317 tonnes which were processed prior to the achievement of commercial production at the IVR deposit on December 31, 2020. (xiii) The Creston Mascota mine’s cost calculations per tonne for the year ended December 31, 2022 exclude approximately $2.2 million of production costs incurred during the year ended December 31, 2022 following the cessation of mining activities at the Bravo pit. The Creston Mascota mine’s cost calculation per tonne for the year ended December 31, 2021 exclude approximately $7.8 million of production costs incurred during the year ended December 31, 2021 following the cessation of mining activities at the Bravo pit. The Creston Mascota mine’s cost calculation per tonne for the year ended December 31, 2020 exclude approximately $4.4 million of production costs incurred during the three months ended December 31, 2020 following the cessation of mining activities at the Bravo pit during the third quarter of 2020. Pro-forma Production Costs and Pro-forma Total Cash Costs per Ounce of Gold Produced for Kirkland Lake Gold Assets for full year 2022 Refer to Note to Investors Concerning Certain Measures of Performance in this MD&A for details on the Company’s calculation and use of total cash costs per ounce of gold produced and minesite costs per tonne. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 57 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) for the Kirkland assets to production costs, exclusive of amortization. Considering the Company completed the merger with Kirkland on February 8, 2022 and provided 2022 guidance including the Kirkland assets, the data disclosed below is for comparative purposes only and this information was not derived from the annual audited consolidated financial statements. Pro-forma Production Cost by Mine (thousands of United States dollars) LaRonde Complex Canadian Malartic Complex(i) Goldex mine Meliadine mine Meadowbank Complex Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Pro-forma production costs Year Ended December 31, 2022 Agnico Eagle $ 285,489 235,735 103,830 318,141 442,681 210,661 489,703 129,774 204,649 144,489 1,943 76,226 Kirkland (to February 8, 2022) $ – – – – – – Pro-forma $ 285,489 235,735 103,830 318,141 442,681 210,661 28,816 518,519 11,418 141,192 8,586 213,235 – – – 144,489 1,943 76,226 $2,643,321 $48,820 $2,692,141 (i) The information set out in this table reflects the Company’s 50% interest in the Canadian Malartic complex. 58 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Reconciliation of Pro-forma Production Costs to Total Cash Costs per Ounce of Gold Produced by Mine for Kirkland Lake Gold assets (thousands of United States dollars, except as noted) Detour Lake Mine Pro-forma Per Ounce of Gold Produced Pro-forma Gold production (ounces) Pro-forma Production costs Inventory adjustments(i) Operational care & maintenance due to COVID-19(ii) Purchase price allocation to inventory(iii) Other adjustments(iv) Pro-forma total cash costs (co-product basis) By-product metal revenues Pro-forma total cash costs (by-product basis) Macassa Mine Pro-forma Per Ounce of Gold Produced Pro-forma Gold production (ounces) Pro-forma Production costs Inventory adjustments(i) Operational care & maintenance due to COVID-19(ii) Purchase price allocation to inventory(iii) Other adjustments(iv) Pro-forma total cash costs(co-product basis) By-product metal revenues Pro-forma total cash costs (by-product basis) Year Ended December 31, 2022 732,572 (thousands) ($ per ounce) $ 518,519 $ 708 6,106 – (74,509) 27,510 $ 477,626 (3,907) $ 473,719 $ $ 8 – (102) 38 652 (5) 647 Year Ended December 31, 2022 200,288 (thousands) ($ per ounce) $ 141,192 $ 705 2,627 – (10,326) 3,460 $ 136,953 (372) $ 136,581 $ $ 13 – (52) 17 683 (2) 681 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 59 Fosterville Mine Pro-forma Per Ounce of Gold Produced Pro-forma Gold production (ounces) Pro-forma Production costs Inventory adjustments(i) Operational care & maintenance due to COVID-19(ii) Purchase price allocation to inventory(iii) Pro-forma total cash costs (co-product basis) By-product metal revenues Pro-forma total cash costs (by-product basis) Notes: Year Ended December 31, 2022 383,206 (thousands) ($ per ounce) $ 213,235 $ 556 2,343 – (73,674) $ 141,904 (527) $ 141,377 $ $ 6 – (192) 370 (1) 369 (i) 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 the 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. (ii) This adjustment reflects the costs associated with the temporary suspension of mining activities at the mine sites in response to the COVID-19 pandemic and includes primarily payroll and other incidental costs associated with maintaining the sites and properties, and payroll costs associated with employees who were not working during the period of reduced or suspended operations. These expenses also include payroll costs of employees who could not work following the period of temporary suspension or reduced operations due to the Company’s effort to prevent or curtail community transmission of COVID-19. (iii) On February 8, 2022, the Company completed the Merger with Kirkland and this adjustment reflects the fair value allocated to inventory on the purchase price allocation. (iv) Other adjustments consists of costs associated with a 2% in-kind royalty paid in respect of the Detour Lake mine, a 1.5% in-kind royalty paid in respect of the Macassa mine and smelting, refining, and marketing charges to production costs. Pro-forma Total Cash Costs per Ounce of Gold Produced (United States dollars per ounce of gold produced, except where noted) Agnico Eagle Kirkland (to February 8, 2022) Pro-forma Production costs per the consolidated statements of income (thousands of United States dollars) Gold production (ounces) Production costs per ounce of gold production Adjustments: Inventory adjustments(i) Purchase price allocation to inventory(ii) Realized gains and losses on hedges of production costs Other(iii) Total cash costs per ounce of gold produced (co-product basis)(iv) By-product metal revenues Total cash costs per ounce of gold produced (by-product basis)(iv) Notes: $2,643,321 3,135,007 $ 843 $ 48,820 $2,692,141 145,724 3,280,731 $ 335 $ 821 2 (51) 6 25 825 (32) 793 $ $ 150 — — 15 $ $ 500 $ (2) 498 $ 8 (49) 6 25 811 (31) 780 (i) 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 the 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. (ii) On February 8, 2022 the Company completed the Merger with Kirkland and this adjustment reflects the fair value allocated to inventory on the purchase price allocation. (iii) Other adjustments consists of smelting, refining and marketing charges to production costs. (iv) The 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. See Non-GAAP Financial Performance Measures – Total Cash Costs per Ounce of Gold Produced and Minesite Costs per Tonne for more information on the Company’s use of total cash cost per ounce of gold produced. 60 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Pro-forma Sustaining and Development Capital Expenditures by Mine (thousands of United States dollars) LaRonde mine LaRonde Zone 5 mine Canadian Malartic Complex(ii) Goldex mine Meliadine mine(i) Meadowbank Complex Hope Bay project Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine La India mine Sustaining capital expenditures LaRonde mine LaRonde Zone 5 mine Canadian Malartic Complex(ii) Goldex mine Akasaba mine Meliadine mine(i) Meadowbank Complex Amaruq Underground Project Hope Bay project Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine La India mine Other Year Ended December 31, 2022 Agnico Eagle $ 92,921 Kirkland (to February 8, 2022) Pro-forma $ — $ 92,921 9,258 69,137 25,125 62,086 86,435 3,619 48,799 214,060 30,298 56,344 26,501 8,963 $ 733,546 $ 54,829 17,191 128,551 29,627 9,453 93,808 8 53,385 13,169 52,764 180,072 92,175 38,368 26,749 6,129 7,076 — — — — — — — 5,062 2,998 3,504 — — 9,258 69,137 25,125 62,086 86,435 3,619 48,799 219,122 33,296 59,848 26,501 8,963 $11,564 $ 745,110 — — — — — — — — — — 25,684 12,547 4,415 — — — $ 54,829 17,191 128,551 29,627 9,453 93,808 8 53,385 13,169 52,764 205,756 104,722 42,783 26,749 6,129 7,076 Development capital expenditures Total Capital Expenditures $ 803,354 $1,536,900 $42,646 $54,210 $ 846,000 $1,591,110 Notes: (i) Certain previously reported line items have been restated to reflect the retrospective application of IAS 16. (ii) The information set out in this table reflects the Company’s 50% interest in the Canadian Malartic complex. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 61 All-in Sustaining Costs per Ounce of Gold Produced Refer to Note to Investors Concerning Certain Measures of Performance in this MD&A for details on the composition, usefulness and other information regarding the Company’s use of the non-GAAP measure all-in sustaining costs per ounce of gold produced. The following tables set out a reconciliation of production costs to all-in sustaining costs per ounce of gold produced for the years ended December 31, 2022, December 31, 2021, and December 31, 2020 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) Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Production costs per the consolidated statements of income (thousands of United States dollars) Gold production (ounces)(i)(ii)(iii) $2,643,321 $1,773,121 $1,424,152 3,135,007 2,060,392 1,700,152 Production costs per ounce of gold production $ 843 $ 861 $ 838 Adjustments: Inventory adjustments(iv) Purchase price allocation to inventory(v) IAS 16 amendments(vi) Realized gains and losses on hedges of production costs Operational care and maintenance costs due to COVID-19(vii) Other(viii) Total cash costs per ounce of gold produced (co-product basis)(ix) By-product metal revenues Total cash costs per ounce of gold produced (by-product basis)(ix) Adjustments: Sustaining capital expenditures (including capitalized exploration) General and administrative expenses (including stock option expense) Non-cash reclamation provision and sustaining leases All-in sustaining costs per ounce of gold produced (by-product basis) By-product metal revenues All-in sustaining costs per ounce of gold produced (co-product basis) 2 (51) – 6 – 25 825 (32) 793 232 70 14 1,109 32 1,141 $ $ $ $ (8) – (8) (22) (6) 12 829 (59) 770 207 69 13 1,059 59 1,118 $ $ $ $ (4) – – 2 (8) 10 838 (63) 775 199 68 9 1,051 63 1,114 $ $ $ $ Notes: (i) Gold production for the year ended December 31, 2020 excludes 18,930 ounces of payable production of gold at the Canadian Malartic complex which were produced prior to the achievement of commercial production at the Barnat deposit on September 30, 2020. (ii) Gold production for the year ended December 31, 2021 excludes 24,057 ounces of payable production of gold at the Meliadine mine which were produced prior to the achievement of commercial production at the Tiriganiaq open pit deposit on August 15, 2021. Gold production for the year ended December 31, 2020 excludes 6,491 ounces of payable production of gold at the Meliadine mine which were produced prior to the achievement of commercial production at the Tiriganiaq open pit deposit on August 15, 2021. (iii) Gold production for the year ended December 31, 2021 exclude 1,956 ounces of payable production of gold at the Meadowbank Complex which were produced prior to the achievement of commercial production at the Amaruq underground project on August 1, 2022. Gold production for the year ended December 31, 2020 excludes 10,995 ounces of payable production of gold at the Meadowbank Complex which were produced prior to the achievement of commercial production at the IVR deposit on December 31, 2020. (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 the 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. 62 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS (v) On February 8, 2022 the Company completed the Merger with Kirkland and this adjustment reflects the fair value allocated to inventory on the purchase price allocation. (vi) Certain previously reported line items have been restated to reflect the retrospective application of IAS 16. This adjustment eliminates the effects of the retrospective application of the IAS 16 amendments on the total cash costs per ounce of gold produced (by-product and co-product) as well as all-in sustaining costs (by-product and co-product). (vii) This adjustment reflects the costs associated with the temporary suspension of mining activities at the Company’s mine sites in response to the COVID-19 pandemic which primarily includes payroll and other incidental costs associated with maintaining the sites and properties, and payroll costs associated with employees who were not working during the period of reduced or suspended operations. These costs were previously classified as “other adjustments” and have now been disclosed separately to provide additional detail on the reconciliation, allowing investors to better understand the impacts of such events on the total cash costs per ounce and minesite cost per tonne. (viii) Other adjustments consists of smelting, refining and marketing charges to production costs. (ix) The 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. See Non-GAAP Financial Performance Measures – Total Cash Costs per Ounce of Gold Produced and Minesite Costs per Tonne for more information on the Company’s use of total cash cost per ounce of gold produced. Operating Margin Refer to Note to Investors Concerning Certain Measures of Performance in this MD&A for details on the composition, usefulness and other information regarding the Company’s use of the non-GAAP measure operating margin. The following tables set out the reconciliation of operating margin by minesite to net income for the years ended December 31, 2022, December 31, 2021, and December 31, 2020. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 63 Year Ended December 31, 2022 Revenues from Mining Operations Production Costs Operating Margin $ 553,931 $ (213,393) $ 340,538 129,569 575,938 250,512 677,713 645,021 144 407,669 1,188,741 327,028 645,371 199,830 4,476 135,219 (72,096) (235,735) (103,830) (318,141) (442,681) – (210,661) (489,703) (129,774) (204,649) (144,489) (1,943) (76,226) 57,473 340,203 146,682 359,572 202,340 144 197,008 699,038 197,254 440,722 55,341 2,533 58,993 $5,741,162 $(2,643,321) $3,097,841 271,117 1,094,691 220,861 82,935 90,692 55,000 10,417 (16,081) 41,895 130,891 445,174 $ 670,249 LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Segment totals Corporate and other: Exploration and corporate development Amortization of property, plant, and mine development General and administrative Finance costs Loss on derivative financial instruments Impairment loss Environmental remediation Foreign currency translation gain Care and maintenance Other expenses Income and mining taxes expense Net income per the consolidated statements of income 64 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine(i) Meadowbank complex(i) Hope Bay project Kittila mine Pinos Altos mine Creston Mascota mine La India mine Segment totals Corporate and other: Exploration and corporate development Amortization of property, plant, and mine development General and administrative Finance costs Loss on derivative financial instruments Environmental remediation Foreign currency translation loss Other expenses Income and mining taxes expense Net income per the consolidated statements of income Year Ended December 31, 2021 Revenues from Mining Operations Production Costs Operating Margin $ 654,577 $ (232,392) $ 422,185 121,236 645,607 241,404 678,766 592,835 115,439 414,656 259,446 27,784 117,875 (56,380) (242,589) (96,181) (250,822) (408,863) (83,118) (192,742) (141,488) (8,165) (60,381) 64,856 403,018 145,223 427,944 183,972 32,321 221,914 117,958 19,619 57,494 $3,869,625 $(1,773,121) $2,096,504 152,514 738,129 142,003 92,042 11,103 576 5,672 21,742 370,778 $ 561,945 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 65 Year Ended December 31, 2020 Revenues from Mining Operations Production Costs Operating Margin $ 543,864 $ (169,824) $ 374,040 111,244 478,542 227,181 569,063 366,743 – 372,132 244,283 77,762 147,299 (47,899) (195,312) (82,654) (245,700) (284,976) – (169,884) (124,678) (35,088) (68,137) 63,345 283,230 144,527 323,363 81,767 – 202,248 119,605 42,674 79,162 $3,138,113 $(1,424,152) $1,713,961 113,492 631,101 116,288 95,134 (107,873) 27,540 22,480 48,234 255,958 $ 511,607 LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Pinos Altos mine Creston Mascota mine La India mine Segment totals Corporate and other: Exploration and corporate development Amortization of property, plant, and mine development General and administrative Finance costs Gain on derivative financial instruments Environmental remediation Foreign currency translation loss Other expenses Income and mining taxes expense Net income per the consolidated statements of income Notes: (i) Certain previously reported line items have been restated to reflect the retrospective application of IAS 16. (ii) The information set out in this table reflects the Company’s 50% interest in the Canadian Malartic mine. Realized Prices Refer to Note to Investors Concerning Certain Measures of Performance in this MD&A for details on the composition, usefulness and other information regarding the Company’s use of the non-GAAP measure realized prices. Sustaining Capital Expenditures and Development Capital Expenditures Refer to Note to Investors Concerning Certain Measures of Performance in this MD&A for details on the composition, usefulness and other information regarding the Company’s use of the non-GAAP measures sustaining capital expenditures and development capital expenditures. 66 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS (thousands of United States dollars) 2022 2021 2020 2022 2021 2020 Three Months Ended December 31, Year Ended December 31, LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine(i) Meadowbank complex Hope Bay project Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine La India mine $ 26,247 $ 30,301 $ 25,333 $ 92,921 $ 96,299 $ 76,446 2,272 18,858 7,125 19,392 40,872 15 14,503 58,546 9,558 19,526 8,333 1,793 4,338 18,978 7,789 13,567 11,729 9,447 15,144 – – – 8,395 4,237 2,631 18,616 6,740 11,481 6,039 – 12,602 – – – 12,295 4,473 9,258 69,137 25,125 62,086 86,435 3,619 48,799 214,060 30,298 56,344 26,501 8,963 14,095 72,749 31,017 50,341 48,917 44,160 42,632 – – – 9,299 52,482 24,018 41,492 55,814 – 39,943 – – – 22,216 10,117 24,242 13,780 Sustaining capital expenditures $227,040 $123,925 $100,210 $ 733,546 $432,543 $337,516 LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Akasaba mine Meliadine mine(i) Meadowbank complex Amaruq Underground Project Hope Bay project Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine La India mine Other $ 11,870 $ 11,872 $ 14,589 $ 54,829 $ 48,373 $ 35,187 6,787 42,649 8,256 7,757 21,023 (1,379) 2,993 4,034 15,918 63,824 27,998 7,398 6,682 338 3,986 1,999 23,207 4,761 – 21,403 932 22,712 384 21,272 – – – 8,622 3,219 1,481 619 2,572 3,927 – 24,311 28,483 8,547 – 50,397 – – – 1,297 3,999 630 17,191 128,551 29,627 9,453 93,808 8 53,385 13,169 52,764 180,072 92,175 38,368 26,749 6,129 7,076 4,782 56,613 18,673 – 103,995 9,643 99,603 7,882 77,175 – – – 23,777 9,383 11,971 700 3,317 13,023 – 88,140 77,464 27,145 – 163,463 – – – 3,730 8,927 14,864 Development capital expenditures $230,134 $121,864 $139,371 $ 803,354 $471,870 $435,960 Total Capital Expenditures $457,174 $245,789 $239,581 $1,536,900 $904,413 $773,476 Working capital adjustments (56,343) (8,500) (14,843) 1,337 (7,415) (14,134) Additions to property, plant and mine development per the consolidated statements of cash flows $400,831 $237,289 $224,738 $1,538,237 $896,998 $759,342 Notes: (i) Certain previously reported line items have been restated to reflect the retrospective application of IAS 16. (ii) The information set out in this table reflects the Company’s 50% interest in the Canadian Malartic complex. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 67 AGNICO EAGLE MINES LIMITED SUMMARIZED QUARTERLY DATA (thousands of United States dollars, except where noted) Three Months Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Total 2022 Operating margin(i): Revenues from mining operations $1,325,688 $1,581,058 $1,449,697 $1,384,719 $5,741,162 Production costs Total operating margin(i) Operating margin(i) by mine: LaRonde mine LaRonde Zone 5 mine Canadian Malartic mine(ii) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Total operating margin(i) 661,735 663,953 103,564 16,656 79,302 37,118 84,279 (5,198) 144 46,111 128,058 24,155 106,856 19,431 1,177 22,300 663,953 Amortization of property, plant and mine development 260,748 – 228,638 174,567 64,815 Impairment loss Exploration, corporate and other Income before income and mining taxes Income and mining taxes Net income for the period Net income per share – basic Net income per share – diluted Cash flows: 657,636 923,422 90,877 7,866 104,461 41,656 96,740 68,044 – 67,611 214,841 74,778 125,442 11,487 642 18,977 923,422 291,052 – 196,680 435,690 159,845 657,073 792,624 77,180 20,137 72,905 32,375 83,469 97,092 – 58,762 170,834 54,294 103,457 11,030 487 10,602 792,624 273,191 – 293,149 226,284 146,641 666,877 2,643,321 717,842 3,097,841 68,917 12,814 83,535 35,533 95,084 42,402 – 24,524 185,305 44,027 104,967 13,393 227 7,114 340,538 57,473 340,203 146,682 359,572 202,340 144 197,008 699,038 197,254 440,722 55,341 2,533 58,993 717,842 3,097,841 269,700 1,094,691 55,000 114,260 55,000 832,727 278,882 1,115,423 73,873 445,174 $ 109,752 $ 275,845 $ $ 0.29 0.28 $ $ 0.61 0.60 $ $ $ 79,643 $ 205,009 $ 670,249 0.17 0.17 $ $ 0.45 0.45 $ $ 1.53 1.53 Cash provided by operating activities $ 507,432 $ 633,266 $ 575,438 $ 380,500 $2,096,636 Cash provided by (used in) investing activities $ 535,652 $ (394,129) $ (439,296) $ (412,685) $ (710,458) Cash used in financing activities $ (167,858) $ (294,307) $ (317,985) $ (134,703) $ (914,853) 68 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Realized prices: Gold (per ounce) Silver (per ounce) Zinc (per tonne) Copper (per tonne) Payable production(iii): Gold (ounces) LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine Meadowbank complex Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Total gold (ounces) Silver (thousands of ounces) LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine Meadowbank complex Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Total silver (thousands of ounces) Zinc (tonnes) Copper (tonnes) AGNICO EAGLE MINES LIMITED SUMMARIZED QUARTERLY DATA (thousands of United States dollars, except where noted) Three Months Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 $ $ $ 1,880 24.11 3,480 $ 10,243 $ $ $ $ 1,866 22.21 3,947 8,953 $ $ $ $ 1,726 18.68 3,435 5,674 $ $ $ $ 1,728 21.51 2,979 8,206 $ $ $ $ Total 2022 1,797 21.63 3,440 8,381 87,549 17,488 80,509 34,445 80,704 59,765 45,508 100,443 24,488 81,827 25,170 1,006 21,702 660,604 153 2 74 1 9 18 3 50 3 8 256 4 28 609 70,736 17,774 87,186 36,877 97,572 96,698 64,814 195,515 61,262 86,065 23,020 635 20,016 858,170 167 2 57 – 10 27 3 41 5 15 236 2 23 588 63,573 19,048 75,262 33,889 91,201 122,994 61,901 175,487 51,775 81,801 23,041 538 16,285 816,795 147 2 57 1 8 30 4 2 4 3 280 – 15 553 62,922 17,247 86,439 36,291 103,397 94,328 44,724 179,737 43,308 88,634 25,291 451 16,669 799,438 142 7 57 – 8 28 3 32 5 6 242 1 11 542 1,069 769 2,568 778 2,108 653 2,450 701 284,780 71,557 329,396 141,502 372,874 373,785 216,947 651,182 180,833 338,327 96,522 2,630 74,672 3,135,007 609 13 245 2 35 103 13 125 17 32 1,014 7 77 2,292 8,195 2,901 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 69 AGNICO EAGLE MINES LIMITED SUMMARIZED QUARTERLY DATA (thousands of United States dollars, except where noted) Three Months Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Total 2022 Payable metal sold: Gold (ounces) LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii)(iv) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Total gold (ounces) Silver (thousands of ounces) LaRonde mine LaRonde Zone 5 mine Canadian Malartic mine(ii)(iv) Goldex mine Meliadine mine Meadowbank complex Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Total silver (thousands of ounces) Zinc (tonnes) Copper (tonnes) 70 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS 70,967 17,595 72,268 33,884 87,772 48,755 98 61,296 13,538 85,160 36,681 97,354 93,737 – 51,615 64,378 131,837 188,517 29,530 101,950 24,787 855 58,050 93,177 24,730 599 21,009 19,306 692,922 836,523 89,667 22,304 75,067 34,019 89,652 119,531 – 63,813 164,300 50,739 79,458 23,436 650 17,610 830,246 59,565 18,747 84,697 34,946 102,933 99,434 – 46,560 174,803 43,197 81,750 26,080 240 15,950 281,495 72,184 317,192 139,530 377,711 361,457 98 226,366 659,457 181,516 356,335 99,033 2,344 73,875 788,902 3,148,593 160 165 150 147 4 79 1 9 12 4 50 3 8 249 7 26 612 1,034 766 1 44 – 8 26 3 46 5 5 233 1 22 559 1,679 783 2 61 – 9 36 3 38 5 5 268 2 19 598 2,099 647 5 59 1 8 26 3 34 1 5 285 – 11 585 1,915 720 622 12 243 2 34 100 13 168 14 23 1,035 10 78 2,354 6,727 2,916 AGNICO EAGLE MINES LIMITED SUMMARIZED QUARTERLY DATA (thousands of United States dollars, except where noted) Three Months Ended March 31, 2021(v) June 30, 2021(v) September 30, 2021(v) December 31, 2021(v) Total 2021(v) Operating margin(i): Revenues from mining operations $ 949,623 $ 984,653 $ 983,818 $ 951,531 $ 3,869,625 Production costs Total operating margin(i) Operating margin(i) by mine: LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Pinos Altos mine Creston Mascota mine La India mine Total operating margin(i) 417,376 433,050 532,247 551,603 93,728 12,598 115,617 15,252 103,748 109,579 38,739 37,881 111,216 109,932 49,950 11,230 58,703 26,426 7,634 18,275 56,063 14,396 51,438 31,905 5,171 4,369 532,247 551,603 Amortization of property, plant and mine development 177,793 176,946 Exploration, corporate and other 111,289 81,592 Income before income and mining taxes 243,165 293,065 Income and mining taxes 97,926 96,674 455,627 528,191 125,770 19,449 93,439 29,421 90,884 52,087 11,633 57,362 31,971 4,186 11,989 528,191 191,771 129,148 207,272 88,315 467,068 1,773,121 484,463 2,096,504 87,070 17,557 96,252 39,182 115,912 25,872 (4,938) 54,411 27,656 2,628 22,861 422,185 64,856 403,018 145,223 427,944 183,972 32,321 221,914 117,958 19,619 57,494 484,463 2,096,504 191,619 103,623 189,221 87,863 738,129 425,652 932,723 370,778 561,945 2.31 2.30 $ $ $ Net (loss) income for the period $ 145,239 $ 196,391 $ 118,957 $ 101,358 Net (loss) income per share – basic Net (loss) income per share – diluted Cash flows: $ $ 0.60 0.59 $ $ 0.81 0.80 $ $ 0.49 0.49 $ $ 0.41 0.41 Cash provided by operating activities $ 366,642 $ 419,376 $ 297,176 $ 262,114 $ 1,345,308 Cash used in investing activities $(538,123) $(210,068) $(268,213) $(247,599) $(1,264,003) Cash used in financing activities $(100,134) $ (64,161) $ (62,404) $ (70,543) $ (297,242) MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 71 AGNICO EAGLE MINES LIMITED SUMMARIZED QUARTERLY DATA (thousands of United States dollars, except where noted) Three Months Ended March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 $ $ $ $ 1,780 26.13 2,743 8,958 $ $ $ 1,814 27.01 2,843 $ 10,902 $ $ $ $ 1,787 23.54 2,967 9,031 $ $ $ 1,795 23.08 3,258 $ 10,120 $ $ $ $ 75,389 17,689 89,550 34,650 96,126 79,965 12,259 60,716 29,175 4,252 17,033 80,681 16,842 92,106 34,659 96,694 85,899 25,308 53,263 32,614 3,228 4,712 88,795 17,952 86,803 28,823 97,024 89,706 17,957 62,089 32,402 2,988 17,124 64,081 18,305 88,933 35,921 101,843 69,238 705 63,172 32,741 2,333 24,660 Total 2021 1,794 25.07 2,947 9,724 308,946 70,788 357,392 134,053 391,687 324,808 56,229 239,240 126,932 12,801 63,529 516,804 526,006 541,663 501,932 2,086,405 203 199 3 82 – 7 24 – 3 373 36 16 747 1,867 752 3 69 1 8 23 2 2 307 32 7 653 2,736 779 171 3 70 – 7 25 – 3 287 22 6 594 2,826 825 151 5 69 1 8 22 2 3 318 15 19 613 1,408 599 724 14 290 2 30 94 4 11 1,285 105 48 2,607 8,837 2,955 Realized prices: Gold (per ounce) Silver (per ounce) Zinc (per tonne) Copper (per tonne) Payable production(iii): Gold (ounces) LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Pinos Altos mine Creston Mascota mine La India mine Total gold (ounces) Silver (thousands of ounces) LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Pinos Altos mine Creston Mascota mine La India mine Total silver (thousands of ounces) Zinc (tonnes) Copper (tonnes) 72 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE MINES LIMITED SUMMARIZED QUARTERLY DATA (thousands of United States dollars, except where noted) Three Months Ended March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 Total 2021 75,285 14,314 83,556 34,358 98,349 76,281 20,221 59,597 27,613 4,878 18,834 86,844 16,168 89,372 34,993 94,163 83,915 17,731 54,790 34,672 3,356 5,739 95,947 19,256 81,511 29,534 82,005 91,474 19,230 60,820 34,920 3,065 15,675 75,388 17,850 81,977 35,500 103,531 77,611 8,019 55,363 29,901 2,385 24,640 333,464 67,588 336,416 134,385 378,048 329,281 65,201 230,570 127,106 13,684 64,888 513,286 521,743 533,437 512,165 2,080,631 199 193 3 67 – 8 19 – 2 361 50 19 728 2,660 754 3 68 1 9 26 – 3 331 41 7 682 2,875 778 176 2 66 – 7 30 – 2 305 23 8 619 2,744 833 153 4 58 1 8 22 3 3 298 14 16 580 2,524 608 721 12 259 2 32 97 3 10 1,295 128 50 2,609 10,803 2,973 Payable metal sold(iv): Gold (ounces) LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Pinos Altos mine Creston Mascota mine La India mine Total gold (ounces) Silver (thousands of ounces) LaRonde mine LaRonde Zone 5 mine Canadian Malartic complex(ii) Goldex mine Meliadine mine Meadowbank complex Hope Bay project Kittila mine Pinos Altos mine Creston Mascota mine La India mine Total silver (thousands of ounces) Zinc (tonnes) Copper (tonnes) Notes: (i) Operating margin (a non-GAAP non-financial performance measure) is calculated as revenues from mining operations less production costs. Details by minesite are disclosed in the Operating Summary below. (ii) The information set out in this table reflects the Company’s 50% interest in the Canadian Malartic complex. (iii) Payable production (a non-GAAP non-financial performance measure) is the quantity of mineral produced during a period contained in products that are 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. (iv) The Canadian Malartic complex’ payable metal sold excludes the 5.0% net smelter return royalty granted to Osisko Gold Royalties Ltd., in connection with the Company’s acquisition of its 50% interest of the Canadian Malartic complex, a 2% in-kind royalty paid in respect of the Detour Lake mine, a 1.5% in-kind royalty paid in respect of the Macassa mine, smelting, refining, and marketing charges to production costs. (v) Certain previously reported line items have been restated to reflect the retrospective application of IAS 16. The Company considers the disclosure of the total cash cost per ounce of gold produced (by-product and co-product) without the impact of the retrospective application of the IAS 16 amendments so investors can compare current performance to what management considers steady-state operational costs for the comparative period. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 73 AGNICO EAGLE MINES LIMITED THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted) Revenues from mining operations Production costs Operating margin(i) 2022 2021 2020 $ 5,741,162 $ 3,869,625 $3,138,113 2,643,321 1,773,121 1,424,152 3,097,841 2,096,504 1,713,961 Amortization of property, plant and mine development 1,094,691 738,129 631,101 Impairment loss Exploration, corporate and other Income before income and mining taxes Income and mining taxes Net income for the year Net income per share – basic Net income per share – diluted Cash provided by operating activities Cash used in investing activities Cash used in financing activities Dividends declared per share Capital expenditures per Consolidated Statements of Cash Flows Realized price per ounce of gold Realized price per ounce of silver Realized price per tonne of zinc Realized price per tonne of copper 55,000 832,727 1,115,423 445,174 670,249 1.53 1.53 $ $ $ – 425,652 932,723 370,778 – 315,295 767,565 255,958 $ $ $ 561,945 $ 511,607 2.31 2.30 $ $ 2.12 2.10 $ 2,096,636 $ 1,345,308 $1,192,054 $ (710,458) $ (1,264,003) $ (808,812) $ (914,853) $ (297,242) $ (302,822) $ 1.60 $ 1,538,237 $ $ $ $ 1,797 21.63 3,440 8,381 $ $ $ $ $ $ 1.40 $ 0.95 896,998 $ 759,342 1,794 25.07 2,947 9,724 $ $ $ $ 1,788 20.44 2,377 6,298 Weighted average number of common shares outstanding – basic (thousands) 437,678 243,708 241,508 Total assets Long-term debt Shareholders’ equity $23,494,808 $10,216,090 $9,614,755 $ 1,242,070 $ 1,340,223 $1,565,241 $16,241,345 $ 5,999,771 $5,683,213 74 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE MINES LIMITED THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted) Operating Summary LaRonde Mine Revenues from mining operations Production costs Operating margin(i) Amortization of property, plant and mine development Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Zinc production – tonnes Copper production – tonnes Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) LaRonde Zone 5 Mine Revenues from mining operations Production costs Operating margin(i) Amortization of property, plant and mine development Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) 2022 2021 2020 $ 553,931 $ 654,577 $ 543,864 213,393 232,392 169,824 $ 340,538 $ 422,185 $ 374,040 79,067 89,697 74,913 $ 261,471 $ 332,488 $ 299,127 1,669,900 1,837,310 1,706,446 5.62 284,780 609 8,195 2,901 5.50 308,946 724 8,837 2,955 $ $ $ C$ C$ 749 850 (227) 623 166 162 $ $ $ C$ C$ 752 717 (241) 476 159 140 $ $ $ C$ C$ 5.53 288,239 672 6,259 3,069 589 643 (177) 466 133 127 $ 129,569 $ 121,236 $ 111,244 72,096 57,473 8,927 48,546 $ $ 56,380 64,856 7,635 57,221 $ $ 1,145,788 1,124,014 2.05 71,557 13 1,008 1,025 (4) 1,021 82 81 $ $ $ C$ C$ 2.07 70,788 14 796 794 (4) 790 63 65 $ $ $ C$ C$ 47,899 63,345 8,240 55,105 967,990 2.10 61,674 12 777 759 (4) 755 66 65 $ $ $ $ $ C$ C$ MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 75 AGNICO EAGLE MINES LIMITED THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted) LaRonde Complex Revenues from mining operations Production costs Operating margin(i) 2022 2021 2020 $ 683,499 $ 775,813 $ 655,108 285,489 288,772 217,723 $ 398,010 $ 487,041 $ 437,385 Amortization of property, plant and mine development 87,994 97,332 83,153 Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Zinc production – tonnes Copper production – tonnes Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) Canadian Malartic Complex(v) Revenues from mining operations Production costs Operating margin(i) $ 310,016 $ 389,709 $ 354,232 2,815,688 2,961,324 2,674,436 4.17 356,337 622 8,195 2,901 4.20 379,734 738 8,837 2,955 $ $ $ C$ C$ 801 885 (182) 703 132 129 $ $ $ C$ C$ 760 732 (197) 535 122 112 $ $ $ C$ C$ 4.29 349,913 684 6,259 3,069 622 664 (147) 517 109 105 $ 575,938 $ 645,607 $ 478,542 235,735 242,589 195,312 $ 340,203 $ 403,018 $ 283,230 Amortization of property, plant and mine development 127,842 167,157 132,531 Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii)(vi) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii)(vi) Production costs per tonne Minesite costs per tonne(iv)(vii) 76 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS $ 212,361 $ 235,861 $ 150,699 9,769,942 11,130,195 10,399,883 1.15 329,396 1.11 357,392 0.97 284,317 245 716 803 (16) 787 31 35 $ $ $ C$ C$ $ $ $ C$ C$ 290 679 684 (21) 663 28 28 $ $ $ C$ C$ 348 736 750 (27) 723 27 27 AGNICO EAGLE MINES LIMITED THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted) Goldex Mine Revenues from mining operations Production costs Operating margin(i) 2022 2021 2020 $ 250,512 $ 241,404 $ 227,181 103,830 96,181 82,654 $ 146,682 $ 145,223 $ 144,527 Amortization of property, plant and mine development 42,160 37,432 36,116 Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) Meliadine Mine Revenues from mining operations Production costs Operating margin(i) $ 104,522 $ 107,791 $ 108,411 2,940,103 2,873,589 2,654,677 1.68 1.60 1.64 141,502 134,053 127,540 $ $ $ C$ C$ 734 765 – 765 46 47 $ $ $ C$ C$ 717 684 – 684 42 42 $ $ $ C$ C$ 648 634 – 634 41 41 $ 677,713 $ 678,766 $ 569,063 318,141 250,822 245,700 $ 359,572 $ 427,944 $ 323,363 Amortization of property, plant and mine development 155,482 110,819 108,958 Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii)(viii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii)(viii) Production costs per tonne Minesite costs per tonne(iv)(ix) $ 204,090 $ 317,125 $ 214,405 1,756,971 1,714,892 1,395,298 6.83 7.37 7.35 372,874 391,687 318,889 35 853 865 (2) 863 232 234 $ $ $ C$ C$ 30 682 637 (3) 634 210 206 $ $ $ C$ C$ 27 786 776 (2) 774 244 240 $ $ $ C$ C$ MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 77 AGNICO EAGLE MINES LIMITED THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted) Meadowbank Complex Revenues from mining operations Production costs Operating margin(i) Amortization of property, plant and mine development Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii)(x) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii)(x) Production costs per tonne Minesite costs per tonne(iv)(xi) Hope Bay Project Revenues from mining operations Production costs Operating margin(i) Amortization of property, plant and mine development Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) 78 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS 2022 2021 2020 $ 645,021 $ 592,835 $ 366,743 442,681 408,863 284,976 $ 202,340 $ 183,972 $ 81,767 117,068 111,508 70,015 $ 85,272 $ 72,464 $ 11,752 3,739,419 3,570,491 2,602,827 3.40 3.07 2.72 373,785 324,808 209,413 103 1,184 1,216 (6) 1,210 154 157 144 – 144 – 144 – – – – – – – – – – $ $ $ C$ C$ $ $ $ $ $ $ C$ C$ 94 1,266 1,209 (8) 1,201 145 143 $ $ $ C$ C$ $ 115,439 83,118 $ 32,321 11,238 $ 21,083 227,739 8.42 56,229 4 1,478 1,064 (1) 1,063 457 326 $ $ $ C$ C$ 63 1,436 1,411 (7) 1,404 154 148 – – – – – – – – – – – – – – – $ $ $ C$ C$ $ $ $ $ $ $ C$ C$ AGNICO EAGLE MINES LIMITED THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted) Kittila Mine Revenues from mining operations Production costs Operating margin(i) 2022 2021 2020 $ 407,669 $ 414,656 $ 372,132 210,661 192,742 169,884 $ 197,008 $ 221,914 $ 202,248 Amortization of property, plant and mine development 96,975 90,715 70,530 Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) Detour Lake Mine Revenues from mining operations Production costs Operating margin(i) Amortization of property, plant and mine development Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) $ 100,033 $ 131,199 $ 131,718 1,924,784 2,051,918 1,701,511 4.13 4.19 4.38 216,947 239,240 208,125 13 971 981 (1) 980 103 101 $ $ $ € € $ 1,188,741 489,703 $ 699,038 200,360 $ 498,678 22,781,511 0.97 651,182 125 752 663 (6) 657 28 25 $ $ $ C$ C$ $ $ $ € € $ $ $ $ $ $ C$ C$ 11 806 836 (1) 835 80 82 – – – – – – – – – – – – – – – $ $ $ € € $ $ $ $ $ $ C$ C$ 11 816 806 (1) 805 87 86 – – – – – – – – – – – – – – – MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 79 AGNICO EAGLE MINES LIMITED THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted) 2022 2021 2020 Macassa Mine Revenues from mining operations Production costs Operating margin(i) Amortization of property, plant and mine development Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) Fosterville Mine Revenues from mining operations Production costs Operating margin(i) Amortization of property, plant and mine development Gross profit(ii) Tonnes of ore milled Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) 80 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS $327,028 129,774 $197,254 83,780 $113,474 280,012 20.47 180,833 17 718 684 (1) 683 602 577 $ $ $ C$ C$ $645,371 204,649 $440,722 65,074 $375,648 523,507 20.41 338,327 32 605 379 (1) 378 561 356 $ $ $ A$ A$ $ $ $ $ $ $ C$ C$ $ $ $ $ $ $ A$ A$ – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – $ $ $ $ $ $ C$ C$ $ $ $ $ $ $ A$ A$ – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – AGNICO EAGLE MINES LIMITED THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted) Pinos Altos Mine Revenues from mining operations Production costs Operating margin(i) Amortization of property, plant and mine development Gross (loss) profit(ii) Tonnes of ore processed Gold – grams per tonne processed at the mill Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) Creston Mascota Mine Revenues from mining operations Production costs Operating margin(i) Amortization of property, plant and mine development Gross profit(ii) Tonnes of ore processed Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv)(xii) 2022 2021 2020 $ 199,830 $ 259,446 $ 244,283 144,489 141,488 124,678 $ 55,341 $ 117,958 $ 119,605 57,459 61,268 65,401 $ (2,118) $ 56,690 $ 54,204 1,510,393 1,899,477 1,796,317 2.07 96,522 2.20 2.25 126,932 114,798 1,014 1,497 1,477 (228) 1,249 96 94 4,476 1,943 2,533 – 1,285 1,115 1,110 (252) 858 75 75 $ $ $ $ $ 1,607 1,086 1,050 (301) 749 69 66 $ $ $ $ $ $ 27,784 $ 77,762 8,165 35,088 $ 19,619 $ 42,674 334 14,577 2,533 $ 19,285 $ 28,097 – – – – 2,630 12,801 525,650 2.00 38,599 7 739 853 (60) 793 – – 105 638 636 (228) 408 – – $ $ $ $ $ 558 909 867 (262) 605 67 54 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 81 AGNICO EAGLE MINES LIMITED THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted) La India Mine Revenues from mining operations Production costs Operating margin(i) Amortization of property, plant and mine development Gross profit(ii) Tonnes of ore processed Gold – grams per tonne Gold production – ounces Silver production – thousands of ounces Production costs per ounce of gold produced ($ per ounce basis) Total cash costs per ounce of gold produced – co-product basis(iii) By-product metal revenues Total cash costs per ounce of gold produced – by-product basis(iii) Production costs per tonne Minesite costs per tonne(iv) 2022 2021 2020 $ 135,219 $ 117,875 $ 147,299 76,226 60,381 68,137 $ 58,993 $ 57,494 $ 79,162 49,373 45,910 44,671 $ 9,620 $ 11,584 $ 34,491 5,101,814 6,018,341 5,525,514 0.59 74,672 77 1,021 1,078 (22) 1,056 15 16 $ $ $ $ $ 0.56 63,529 0.67 84,974 48 950 959 (20) 939 10 10 $ $ $ $ $ 65 802 803 (15) 788 12 12 $ $ $ $ $ Notes: (i) Operating margin is calculated as revenues from mining operations less production costs. (ii) Gross (loss) profit is not a recognized measure under IFRS and this data may not be comparable to data reported by other gold producers. Gross profit is calculated by deducting amortization of property plant and mine development from operating margin. The measure represents the amount of revenues in excess of production costs and amortization of property plant and mine development and is used by management to assess past operational profitability and performance of the mining operations. Management also uses these measures to, and believes it is useful to investors so they can monitor the performance of the Company’s mining operations. Management is aware, and investors should note, that the gross profit measure of performance can be impacted by fluctuations in processing levels, costs of gold produced and metal prices, management compensates for this inherent limitation by using this measure in conjunction with conjunction with minesite costs per tonne as well as other data prepared in accordance with IFRS. Refer to “Note to Investors Concerning Certain Measures of Performance” and “Non-Gaap Financial Performance Measures – operating margin” in this MD&A for additional details. (iii) The 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. Refer to “Note to Investors Concerning Certain Measures of Performance” and “Non-Gaap Financial Performance Measures – Total Cash Costs Per Ounce of Gold Produced and Minesite cost per tonne” in this MD&A for additional details. (iv) 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. Refer to “Note to Investors Concerning Certain Measures of Performance” and “Non-Gaap Financial Performance Measures – Total Cash Costs Per Ounce of Gold Produced and Minesite cost per tonne” in this MD&A for additional details. The information set out in this table reflects the Company’s 50% interest in the Canadian Malartic complex. (v) (vi) The Canadian Malartic complex’ cost calculations per ounce of gold produced for the year ended December 31, 2020 exclude 18,930 ounces of payable production of gold, which were produced prior to the achievement of commercial production at the Barnat deposit on September 30, 2020. (vii) The Canadian Malartic complex’ cost calculations per tonne for the year ended December 31, 2020 exclude 731,309 tonnes, which were processed prior to the achievement of commercial production at the Barnat deposit on September 30, 2020. (viii) The Meliadine mine’s cost calculations per ounce of gold produced for the year ended December 31, 2021 excludes 24,057 ounces of payable gold production which were produced prior to the achievement of commercial production at the Tiriganiaq open pit deposit on August 15, 2021. The Meliadine mine’s cost calculations per ounce of gold produced for the year ended December 31, 2020 excludes 6,491 ounces of payable production of gold which were produced prior to the achievement of commercial production at the Tiriganiaq open pit on August 15, 2021. (ix) The Meliadine mine’s cost calculations per tonne for the year ended December 31, 2021 excludes 213,867 tonnes of ore from the Tiriganiaq open pit deposit which were processed prior to the achievement of commercial production at the Tiriganiaq open pit deposit on August 15, 2021. The Meliadine mine’s cost calculations per tonne for the year ended December 31, 2020 excludes 49,504 tonnes which were processed during this period prior to the achievement of commercial production at the Tiriganiaq open pit deposit on August 15, 2021. The Meadowbank Complex’s cost calculations per ounce of gold produced for the year ended December 31, 2021 excludes 1,956 ounces of payable production of gold which were produced prior to the achievement of commercial production at the Amaruq Underground project on August 1, 2022. The Meadowbank Complex’s cost calculations per ounce of gold produced for the year ended December 31, 2020 excludes 10,995 ounces of payable production of gold which were produced prior to the achievement of commercial production at the IVR deposit on December 31, 2020. (x) (xi) The Meadowbank Complex’s cost calculations per tonne for the year ended December 31, 2021 excludes 14,299 tonnes of ore which were processed prior to the achievement of 82 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE MINES LIMITED THREE YEAR FINANCIAL AND OPERATING SUMMARY (thousands of United States dollars, except where noted) commercial production at the Amaruq Underground project on August 1, 2022. The Meadowbank Complex’s cost calculations per tonne for the year ended December 31, 2020 excludes 121,317 tonnes which were processed prior to the achievement of commercial production at the IVR deposit on December 31, 2020. (xii) The Creston Mascota mine’s cost calculation per tonne for the year ended December 31, 2022 excludes approximately $2.2 million of production costs incurred during the year ended December 31, 2022 following the cessation of mining activities at the Bravo pit during the third quarter of 2020. The Creston Mascota mine’s cost calculation per tonne for the year ended December 31, 2021 excludes approximately $7.8 million of production costs incurred during the three months ended December 31, 2021 following the cessation of mining activities at the Bravo pit during the third quarter of 2020.The Creston Mascota mine’s cost calculation per tonne for the year ended December 31, 2020 excludes approximately $4.4 million of production costs incurred during the three months ended December 31, 2020 following the cessation of mining activities at the Bravo pit during the third quarter of 2020. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 83 Annual Audited Consolidated Financial Statements (Prepared in accordance with International Financial Reporting Standards) MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of Agnico Eagle Mines Limited (“Agnico Eagle” or the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer and effected by the Company’s Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In making this assessment, the Company’s management used the criteria outlined by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework issued in 2013. Based on its assessment, management concluded that, as of December 31, 2022, the Company’s internal control over financial reporting was effective. The Company acquired Kirkland Lake Gold Ltd. (“Kirkland”) during the year ended December 31, 2022. The financial information for this acquisition is included in Note 5 to the consolidated financial statements. The CSA’s National Instrument 52-109 (“NI 52-109”) and the SEC staff provide an exemption whereby companies undergoing acquisitions can exclude the acquired business in the year of acquisition from the scope of testing and assessment of design and operational effectiveness of internal controls over financial reporting. In accordance with NI 52-109 and SEC staff guidance, the Company’s management excluded Kirkland from management’s report on internal control over financial reporting for the year ended December 31, 2022. The tables below set out summary financial information for Kirkland included in the Company’s consolidated financial statements. Result of operations from Kirkland have been consolidated with those of the Company from February 8, 2022: (in thousands of United States dollars) Revenues from mining operations Income before income and mining taxes Total assets Total liabilities Total net assets February 8, 2022 – December 31, 2022 $2,161,140 $ 799,154 As at December 31, 2022 $14,031,949 $ 3,239,147 $10,792,802 The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report that appears herein. Toronto, Canada March 24, 2023 By /s/ AMMAR AL-JOUNDI Ammar Al-Joundi President and Chief Executive Officer By /s/ DAVID SMITH David Smith Executive Vice-President, Finance and Chief Financial Officer 2 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Agnico Eagle Mines Limited Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Agnico Eagle Mines Limited (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), the Company’s internal control over financial reporting as of December 31, 2022, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 24, 2023 expressed an unqualified opinion thereon. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate. Description of the Matter Business combination As discussed in Note 5 to the financial statements, on February 8, 2022, the Company completed the acquisition of Kirkland Lake Gold Ltd. for total consideration of $10,283.1 million. The transaction was accounted for as a business combination. In determining the fair value of assets acquired and liabilities assumed, the Company ascribed a value of $10,428.3 million to property, plant and mine development assets acquired and $1,636.3 million to goodwill. Significant assumptions used to estimate the value of mineral interests included in property, plant and mine development assets included long-term commodity prices, discount rates, estimated quantities of mineralization to be valued using the income approach, and estimates of future operating and capital costs. The Company discloses significant judgments, estimates and assumptions in respect of the business combination in Note 4 to the consolidated financial statements and the results of their analysis in Note 5. MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 3 How We Addressed the Matter in Our Audit Description of the Matter How We Addressed the Matter in Our Audit interests which comprise a portion of This matter was identified as a critical audit matter due to the significant estimation uncertainty and judgment required by management to determine the fair value of the property, plant and mine mineral development acquired. The significant estimation was primarily due to the complexity of inputs and assumptions to the valuation model prepared by management to measure the fair value and the sensitivity of the fair values to the significant underlying assumptions. Our procedures included obtaining an understanding, evaluating the design and testing the operating effectiveness of controls over the Company’s business combination process, including the controls related to establishing the fair value of property, plant and mine development acquired. Our procedures also included, among others, involving professionals with specialized skills and knowledge to evaluate the discount rate against current industry and economic trends and company-specific risk premiums, compared long-term commodity prices against market data, including a range of analyst forecasts, and performed sensitivity analyses over these assumptions to assess the impact on the fair value of property, plant and mine development acquired. We tested the completeness, accuracy, and relevance of underlying data used in the Company’s models. We assessed the estimated quantities of mineralization by comparing to information compiled by management’s specialists. We involved our mining specialists in obtaining an understanding of the procedures performed by management’s specialists in estimating and characterizing known mineralization, determining the extent of mineralization for which value should be ascribed within the purchase accounting, and evaluating the methods employed by management’s specialists in developing cash flow estimates. Goodwill impairment assessment At December 31, 2022, the carrying value of goodwill was $2,044.1 million. The Company’s impairment tests with regard to goodwill required management to make significant assumptions in determining the recoverable amount of cash generating units, such as gold price, discount rate, estimated quantities of mineralization, and Net Asset Value (NAV) multiples. The Company discloses significant judgements, estimates and assumptions in respect of impairment in Note 4 to the consolidated financial statements and the results of their analysis in Note 24. This matter was identified as a critical audit matter due to the significant estimation uncertainty and judgement applied by management in determining the recoverable amount, primarily due to the sensitivity of the underlying significant assumptions to the future cash flows and the effect changes in these assumptions would have on the recoverable amount. Our procedures included obtaining an understanding, evaluating the design, and testing the operating effectiveness of controls over the Company’s impairment and mineralization processes. Our procedures also included, among other things, involving professionals with specialized skills and knowledge to evaluate the discount rate against current industry and economic trends, comparing gold prices against market data including a range of analyst forecasts, comparing NAV multiples to those implied from market information including analyst estimates, considering the characteristics of the assets, and performing sensitivity analyses over certain assumptions to assess the impact on the recoverable amounts. We tested the completeness, accuracy, and relevance of underlying data used in the Company’s models. The work of management’s specialists was used in performing the procedures to evaluate the reasonableness of mineralization estimates and the expected conversions of resources to reserves. To evaluate the estimates of reserves, resources 4 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS and exploration potential used in the impairment analysis, we reviewed the economic assumptions used in establishing cut-off grades for reserve and resource estimates. We involved our mining specialists to assist in understanding and evaluating the factors that affected the Company’s estimated conversion of mineral resources and exploration potential into reserves. /s/ Ernst & Young LLP Chartered Professional Accountants Licensed Public Accountants We have served as the Company’s auditor since 1983. Toronto, Canada March 24, 2023 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 5 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Agnico Eagle Mines Limited Opinion on Internal Control over Financial Reporting We have audited Agnico Eagle Mines Limited’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO criteria”). In our opinion, Agnico Eagle Mines Limited (the “Company”) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Kirkland Lake Gold Ltd., which is included in the 2022 consolidated financial statements of the Company and constituted $14,031,949 and $10,792,802 of total and net assets (in thousands of United States dollars), respectively, as of December 31, 2022 and $2,161,140 and $799,154 of revenues from mining operations and income before income and mining taxes (in thousands of United States dollars), respectively for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Kirkland Lake Gold Ltd. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income, equity and cash flows for the years then ended, and the related notes and our report dated March 24, 2023 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 6 AGNICO EAGLE MANAGEMENT’S DISCUSSION AND ANALYSIS Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Chartered Professional Accountants Licensed Public Accountants Toronto, Canada March 24, 2023 MANAGEMENT’S DISCUSSION AND ANALYSIS AGNICO EAGLE 7 AGNICO EAGLE MINES LIMITED CONSOLIDATED BALANCE SHEETS (thousands of United States dollars, except share amounts) ASSETS Current assets: Cash and cash equivalents Trade receivables (Notes 6 and 19) Inventories (Note 7) Income taxes recoverable Fair value of derivative financial instruments (Notes 6 and 21) Other current assets (Note 8A) Total current assets Non-current assets: Goodwill (Notes 23 and 24) Property, plant and mine development (Notes 9 and 13) Investments (Notes 6, 10 and 21) Deferred income tax asset (Note 25) Other assets (Note 8B) Total assets LIABILITIES Current liabilities: Accounts payable and accrued liabilities (Note 11) Share based liabilities (Note 17) Interest payable Income taxes payable (Note 25) Current portion of long-term debt (Note 14) Reclamation provision (Note 12) Lease obligations (Note 13) Fair value of derivative financial instruments (Notes 6 and 21) Total current liabilities Non-current liabilities: Long-term debt (Note 14) Reclamation provision (Note 12) Lease obligations (Note 13) Share based liabilities Deferred income and mining tax liabilities (Note 25) Other liabilities (Note 15) Total liabilities EQUITY Common shares (Note 16): Outstanding – 457,160,104 common shares issued, less 694,808 shares held in trust Stock options (Notes 16 and 17) Contributed surplus Deficit Other reserves (Note 18) Total equity Total liabilities and equity Commitments and contingencies (Note 27) On behalf of the Board: Ammar Al-Joundi, Director Jeffrey Parr, Director See accompanying notes 8 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS As at December 31, 2022 As at December 31, 2021 Restated (Note 3U) $ 658,625 8,579 1,209,075 35,054 8,774 259,952 2,180,059 2,044,123 18,459,400 332,742 11,574 466,910 $ 185,786 13,545 878,944 7,674 12,305 204,134 1,302,388 407,792 7,675,595 343,509 133,608 353,198 $23,494,808 $10,216,090 $ 672,503 $ 414,673 15,148 16,496 4,187 100,000 23,508 36,466 78,114 946,422 1,242,070 878,328 114,876 17,277 3,981,875 72,615 7,253,463 16,251,221 197,430 23,280 (201,580) (29,006) 16,241,345 $23,494,808 – 12,303 47,213 225,000 7,547 32,988 22,089 761,813 1,340,223 722,449 98,445 – 1,223,128 70,261 4,216,319 5,863,512 191,112 37,254 (146,383) 54,276 5,999,771 $10,216,090 AGNICO EAGLE MINES LIMITED CONSOLIDATED STATEMENTS OF INCOME (thousands of United States dollars, except per share amounts) REVENUES Revenues from mining operations (Note 19) COSTS AND EXPENSES Production(i) Exploration and corporate development Amortization of property, plant and mine development (Note 9) General and administrative Finance costs (Note 14) Loss on derivative financial instruments (Note 21) Impairment loss (Note 24) Foreign currency translation (gain) loss Care and maintenance Other expenses (Note 22) Income before income and mining taxes Income and mining taxes expense (Note 25) Net income for the year Net income per share – basic (Note 16) Net income per share – diluted (Note 16) Cash dividends declared per common share Note: (i) Exclusive of amortization, which is shown separately. Year Ended December 31, 2022 2021 Restated (Note 3U) $5,741,162 $3,869,625 2,643,321 271,117 1,094,691 220,861 82,935 90,692 55,000 (16,081) 41,895 141,308 1,115,423 445,174 $ 670,249 $ $ $ 1.53 1.53 1.60 1,773,121 152,514 738,129 142,003 92,042 11,103 – 5,672 – 22,318 932,723 370,778 $ 561,945 $ $ $ 2.31 2.30 1.40 See accompanying notes CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 9 AGNICO EAGLE MINES LIMITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (thousands of United States dollars) Net income for the year Other comprehensive income: Items that may be subsequently reclassified to net income: Derivative financial instruments (Note 18): Reclassified from the cash flow hedge reserve to net income Income tax impact Items that will not be subsequently reclassified to net income: Pension benefit obligations: Remeasurement (loss) gain on pension benefit obligations (Note 15) Income tax impact Equity securities (Note 18): Net change in fair value of equity securities Income tax impact Other comprehensive loss for the period Comprehensive income for the period Year Ended December 31, 2022 2021 Restated (Note 3U) $670,249 $561,945 1,176 1,125 2,301 (194) 230 (95,457) 9,874 (85,547) (83,246) 1,175 – 1,175 4,533 (1,412) (42,162) 4,954 (34,087) (32,912) $587,003 $529,033 10 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS See accompanying notes Common Shares Outstanding Shares Amount Stock Options Contributed Surplus Other Reserves Deficit Total Equity 242,884,314 $ 5,751,479 $175,640 $ 37,254 $(366,412) $ 85,252 $ 5,683,213 AGNICO EAGLE MINES LIMITED CONSOLIDATED STATEMENTS OF EQUITY (thousands of United States dollars, except share and per share amounts) Balance at December 31, 2020 Net income (Restated)(Note 3U) Other comprehensive income (loss) (Restated)(Note 3U) Total comprehensive income (loss) (Restated)(Note 3U) Transfer of loss on disposal of equity securities to deficit (Note 10) Transactions with owners: – – – – – – – – – – – – Shares issued under employee stock option plan (Notes 16 and 17A) 471,765 26,417 (4,710) Stock options (Notes 16 and 17A) – – 20,182 Shares issued under incentive share purchase plan (Note 17B) Shares issued under dividend reinvestment plan Dividends declared ($1.40 per share) Restricted Share Unit plan, Performance Share Unit plan, and Long Term Incentive Plan (Notes 16 and 17C, D) 497,767 1,165,077 – 27,479 64,891 – (17,066) (6,754) – – – – – – – – – – – – – – 561,945 – 561,945 3,121 (36,033) (32,912) 565,066 (36,033) 529,033 (5,057) 5,057 – – – – – (339,980) – – – – – – – 21,707 20,182 27,479 64,891 (339,980) (6,754) 670,249 – 670,249 36 (83,282) (83,246) 670,285 (83,282) 587,003 Balance at December 31, 2021 (Restated)(Note 3U) 245,001,857 $ 5,863,512 $191,112 $ 37,254 $(146,383) $ 54,276 $ 5,999,771 Net income Other comprehensive income (loss) Total comprehensive income (loss) Transactions with owners: – – – – – – – – – Shares issued under employee stock option plan (Notes 16 and 17A) 944,989 51,310 (9,465) Shares issued on acquisition of Kirkland, net of share issuance costs (Note 5) Stock options (Notes 16 and 17A) 209,274,263 10,268,160 – – – 15,783 Shares issued under incentive share purchase plan (Note 17B) 615,069 30,285 Shares issued under dividend reinvestment plan 2,459,599 117,252 Share repurchases (Note 16) Dividends declared ($1.60 per share) (1,569,620) (55,926) – – Restricted Share Unit plan, Performance Share Unit plan, and Long Term Incentive Plan (Notes 16 and 17C, D) (260,861) (23,372) – – – – – – – – – – – – – (13,974) – – – – – – – – (725,482) – – – – – – – – – 41,845 10,268,160 15,783 30,285 117,252 (69,900) (725,482) (23,372) Balance at December 31, 2022 456,465,296 $16,251,221 $197,430 $ 23,280 $(201,580) $(29,006) $16,241,345 See accompanying notes CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 11 AGNICO EAGLE MINES LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (thousands of United States dollars) OPERATING ACTIVITIES Net income for the year Add (deduct) adjusting items: Amortization of property, plant and mine development (Note 9) Deferred income and mining taxes (Note 25) Unrealized loss on currency and commodity derivatives (Note 21) Unrealized loss on warrants (Note 21) Stock-based compensation (Note 17) Impairment loss (Note 24) Foreign currency translation (gain) loss Other Changes in non-cash working capital balances: Trade receivables Income taxes Inventories Other current assets Accounts payable and accrued liabilities Interest payable Cash provided by operating activities INVESTING ACTIVITIES Additions to property, plant and mine development (Note 9) Cash and cash equivalents acquired in Kirkland acquisition (Note 5) Acquisition of TMAC Resources Inc., net of cash and cash equivalents (Note 5) Advance to TMAC Resources Inc. to fund repayment of debt (Note 5) Payment to repurchase the Hope Bay royalty (Note 5) Proceeds from sale of property, plant and mine development (Note 9) Net purchases of short-term investments Net proceeds from sale of equity securities Purchases of equity securities and other investments Payments for financial assets at amortized cost Proceeds from loan repayment Decrease in restricted cash Cash used in investing activities FINANCING ACTIVITIES Proceeds from Credit Facility (Note 14) Repayment of Credit Facility (Note 14) Repayment of Senior Notes (Note 14) Long-term debt financing costs (Note 14) Repayment of lease obligations Dividends paid Repurchase of common shares (Notes 16 and 17C,D) Proceeds on exercise of stock options (Note 17A) Common shares issued (Note 16) Cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents during the period Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period SUPPLEMENTAL CASH FLOW INFORMATION Interest paid Income and mining taxes paid 12 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS See accompanying notes Year Ended December 31, 2022 $ 670,249 2021 Restated (Note 3U) 561,945 $ 1,094,691 168,098 59,556 9,820 48,570 55,000 (16,081) 25,965 12,110 (35,010) (46,236) (10,756) 59,460 1,200 2,096,636 (1,538,237) 838,732 – – – 1,019 (4,608) – (47,364) – 40,000 – (710,458) 100,000 (100,000) (225,000) – (33,701) (608,307) (109,955) 41,845 20,265 (914,853) 1,514 472,839 185,786 658,625 67,510 316,743 $ $ $ 738,129 188,966 44,397 16,736 57,799 – 5,672 12,868 (1,678) (62,424) (185,090) (31,354) (75) (583) 1,345,308 (896,998) – (185,898) (105,000) (50,000) 2,696 (1,352) 5,361 (39,889) (16,000) – 23,077 (1,264,003) 595,000 (595,000) – (2,553) (25,020) (275,158) (34,606) 21,707 18,388 (297,242) (804) (216,741) 402,527 185,786 85,109 246,084 $ $ $ AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 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, Australia, Finland and Mexico and the Company has exploration activities in Canada, Europe, Latin America, Australia 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. On November 8, 2022 the Company entered into an arrangement agreement with Yamana Gold Inc (“Yamana”) and Pan American Silver Corp. (“Pan American”) pursuant to which Pan American will acquire all of the issued and outstanding shares of Yamana and Yamana will sell the subsidiaries and partnerships that hold Yamana’s interests in its Canadian assets to Agnico Eagle, including the Canadian Malartic mine (the “Yamana transaction”) (Note 29). 2. BASIS OF PRESENTATION A) Statement of Compliance The accompanying consolidated financial statements of Agnico Eagle have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These consolidated financial statements were authorized for issuance by the Board of Directors of the Company (the “Board”) on March 24, 2023. B) Basis of Presentation Overview These 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. The consolidated financial statements are presented in US dollars and all values are rounded to the nearest thousand, except where otherwise indicated. Subsidiaries These 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 CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 13 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 2. BASIS OF PRESENTATION (Continued) 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. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A) Business Combinations In a business combination, the acquisition method of accounting is used, whereby the purchase consideration is allocated to the fair value of identifiable assets acquired and liabilities assumed at the date of acquisition. Where the cost of the acquisition exceeds the fair values of the identifiable net assets acquired, the difference is recorded as goodwill. Preliminary fair values allocated at a reporting date are finalized as soon as the relevant information is available, within a period not to exceed twelve months from the acquisition date with retroactive restatement of the impact of adjustments to those preliminary fair values effective as at the acquisition date. Acquisition related costs are expensed as incurred. B) Foreign Currency Translation The functional currency of the Company, for each subsidiary and for joint arrangements, is the currency of the primary economic environment in which it operates. The functional currency of all of the Company’s operations is the US dollar. Once the Company determines the functional currency of an entity, it is not changed unless there is a significant change in the relevant underlying transactions, events and circumstances. Any change in an entity’s functional currency is accounted for prospectively from the date of the change, and the consolidated balance sheets are translated using the exchange rate at that date. At the end of each reporting period, the Company translates foreign currency balances as follows: • monetary items are translated at the closing rate in effect at the consolidated balance sheet date; • non-monetary items that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Items measured at fair value are translated at the exchange rate in effect at the date the fair value was measured; and • revenue and expense items are translated using the average exchange rate during the period. C) Cash and Cash Equivalents The Company’s cash and cash equivalents include cash on hand and short-term investments in money market instruments with remaining maturities of three months or less at the date of purchase. The Company places its cash and cash equivalents and short-term investments in high quality securities issued by government agencies, financial institutions and major corporations and limits the amount of credit exposure by diversifying its holdings. Cash and cash equivalents are classified as financial assets measured at amortized cost. D) Inventories Inventories consist of ore stockpiles, concentrates, dore bars and supplies. Inventories are carried at the lower of cost and net realizable value (“NRV”). Cost is determined using the weighted average basis and includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories includes direct costs of materials and labour related directly to mining and processing activities, including production phase stripping costs, amortization of property, plant and mine development directly involved in the related mining and production process, amortization of any stripping costs previously capitalized and directly attributable overhead costs. When interruptions to production occur, an adjustment is made to the costs included in inventories, such that they reflect normal capacity. Abnormal costs are expensed in the period they are incurred. 14 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The current portion of ore stockpiles, ore on leach pads and inventories is determined based on the amounts expected to be processed within the next twelve months. Ore stockpiles, ore on leach pads and inventories not expected to be processed or used within the next twelve months are classified as long-term. NRV is estimated by calculating the net selling price less costs to be incurred in converting the relevant inventories to saleable product and delivering it to a customer. Costs to complete are based on management’s best estimate as at the consolidated balance sheet date. An NRV impairment may be reversed in a subsequent period if the circumstances that triggered the impairment no longer exist. E) Financial Instruments The Company’s financial assets and liabilities (financial instruments) include cash and cash equivalents, trade receivables, loans receivable, equity securities, share purchase warrants, accounts payable and accrued liabilities, long-term debt and derivative financial instruments. Financial instruments are recorded at fair value and classified at initial recognition and subsequently measured at amortized cost, fair value through other comprehensive income (“FVOCI”), or fair value through profit or loss (“FVPL”). Subsequent to initial recognition, financial instruments classified as cash and cash equivalents, loans receivable, accounts payable and accrued liabilities, and long-term debt are measured at amortized cost using the effective interest method. Other financial instruments 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. On initial recognition of an equity investment, the Company may irrevocably elect to measure the investment at FVOCI where changes in the fair value of equity securities are permanently recognized in other comprehensive income and will not be reclassified to profit or loss. The realized gain or loss is reclassified from other comprehensive income to the deficit when the asset is de-recognized. The election is made on an investment-by-investment basis. 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 consolidated financial statements at fair value and they are classified based on contractual maturity. Derivative instruments are classified as either hedges of highly probable forecast 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 consolidated balance sheets 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 gain or loss on derivative financial instruments line item in the 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 gain or loss on derivative financial instruments line item in the consolidated statements of income (FVPL). CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 15 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Company also holds share purchase warrants of certain publicly traded entities where it has an investment in equity securities. Share purchase warrants are accounted for as derivative financial instruments and presented as part of investments in the consolidated balance sheets. Expected Credit Loss Impairment Model An assessment of the expected credit loss related to a financial asset is undertaken upon initial recognition and at the end of each reporting period based on the credit quality of the debtor and any changes that impact the risk of impairment. F) Goodwill Goodwill is recognized in a business combination if the cost of the acquisition exceeds the fair values of the identifiable net assets acquired. Goodwill is then allocated to the cash generating unit (“CGU”) or group of CGUs that are expected to benefit from the synergies of the combination. A CGU is the smallest identifiable group of assets that generates cash inflows which are largely independent of the cash inflows from other assets or groups of assets. The Company performs goodwill impairment tests on an annual basis as at December 31 each year. In addition, the Company assesses for indicators of impairment at each reporting period-end and, if an indicator of impairment is identified, goodwill is tested for impairment at that time. If the carrying value of the CGU or group of CGUs to which goodwill is assigned exceeds its recoverable amount, an impairment loss is recognized. Goodwill impairment losses are recorded in the consolidated statements of income and they are not subsequently reversed. The recoverable amount of a CGU or group of CGUs is measured as the higher of value in use and fair value less costs of disposal. G) Mining Properties, Plant and Equipment and Mine Development Costs Mining Properties The cost of mining properties includes the fair value attributable to proven and probable mineral reserves and mineral resources acquired in a business combination or asset acquisition, underground mine development costs, deferred stripping, capitalized exploration and evaluation costs and capitalized borrowing costs. Significant payments related to the acquisition of land and mineral rights are capitalized as mining properties at cost. If a mineable ore body is discovered, such costs are amortized to income when commercial production commences, using the units-of-production method, based on estimated proven and probable mineral reserves and the mineral resources included in the current life of mine plan. If no mineable ore body is discovered, such costs are expensed in the period in which it is determined that the property has no future economic value. Cost components of a specific project that are included in the capital cost of the asset include salaries and wages directly attributable to the project, supplies and materials used in the project, and incremental overhead costs that can be directly attributable to the project. Assets under construction are not amortized until the earlier of the end of the construction period or once commercial production is achieved. Upon achieving the production stage, the capitalized construction costs are transferred to the appropriate category within property, plant and mine development. Plant and Equipment Expenditures for new facilities and improvements that can extend the useful lives of existing facilities are capitalized as plant and equipment at cost. The cost of an item of plant and equipment includes: its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; 16 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and the estimate of the costs of dismantling and removing the item and restoring the site on which it is located other than costs that arise as a consequence of having used the item to produce inventories during the period. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statements of income when the asset is derecognized. Amortization of an asset begins when the asset is in the location and condition necessary for it to operate in the manner intended by management. Amortization ceases at the earlier of the date the asset is classified as held for sale or the date the asset is derecognized. Assets under construction are not amortized until the earlier of the end of the construction period or once commercial production is achieved. Amortization is charged according to either the units-of-production method or on a straight line basis, according to the pattern in which the asset’s future economic benefits are expected to be consumed. Amortization does not cease when an asset becomes idle or is retired from active use unless the asset is fully amortized; however, under the units-of-production method of amortization, the amortization charge can be zero when there is no production. The amortization method applied to an asset is reviewed at least annually. Useful lives of property, plant and equipment are based on the lesser of the estimated mine lives as determined by proven and probable mineral reserves and the mineral resources included in the current life of mine plan and the estimated useful life of the asset. Remaining mine lives at December 31, 2022 range from an estimated 2 to 28 years. The following table sets out the useful lives of certain assets: Buildings Leasehold Improvements Software and IT Equipment Furniture and Office Equipment Machinery and Equipment Mine Development Costs Useful Life 5 to 30 years 15 years 1 to 10 years 3 to 5 years 1 to 30 years Mine development costs incurred after the commencement of commercial production are capitalized when they are expected to have a future economic benefit. Activities that are typically capitalized include costs incurred to build shafts, drifts, ramps and access corridors which enables the Company to extract ore underground. The Company records amortization on underground mine development costs on a units-of-production basis based on the estimated tonnage of proven and probable mineral reserves and the mineral resources included in the current life of mine plan of the identified component of the ore body. The units-of-production method defines the denominator as the total tonnage of proven and probable mineral reserves and the mineral resources included in the current life of mine plan. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 17 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Deferred Stripping In open pit mining operations, it is necessary to remove overburden and other waste materials to access ore from which minerals can be extracted economically. The process of mining overburden and waste materials is referred to as stripping. During the development stage of the mine, stripping costs are capitalized as part of the cost of building, developing and constructing the mine and are amortized once the mine has entered the production stage. During the production stage of a mine, stripping costs are recorded as a part of the cost of inventories unless these costs are expected to provide a future economic benefit and, in such cases, are capitalized to property, plant and mine development. Production stage stripping costs provide a future economic benefit when: • It is probable that the future economic benefit (e.g., improved access to the ore body) associated with the stripping activity will flow to the Company; • The Company can identify the component of the ore body for which access has been improved; and • The costs relating to the stripping activity associated with that component can be measured reliably. Capitalized production stage stripping costs are amortized over the expected useful component of the ore body that becomes more accessible as a result of the stripping activity. life of the identified Borrowing Costs Borrowing costs are capitalized to qualifying assets. Qualifying assets are assets that take a substantial period of time to prepare for the Company’s intended use, which includes projects that are in the exploration and evaluation, development or construction stages. Borrowing costs attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognized as finance costs in the period in which they are incurred. Where the funds used to finance a qualifying asset form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to the relevant borrowings during the period. H) Leases At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company assesses whether: • The contract involves the use of an explicitly or implicitly identified asset; • The Company has the right to obtain substantially all of the economic benefits from the use of the asset throughout the contract term; • The Company has the right to direct the use of the asset. The Company recognizes a right-of-use asset and a lease obligation at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease obligations. The cost of right-of-use assets includes the initial amount of lease obligations recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. 18 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the right-of-use assets are depreciated on a straight-line basis over the shorter of the estimated useful life and the lease term. Right-of-use assets are subject to impairment. At the commencement date of the lease, the Company recognizes lease obligations measured at the present value of lease payments to be made over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. The lease payments include fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees and the exercise price of a purchase option reasonably certain to be exercised by the Company. After the commencement date, the amount of lease obligations is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease obligations is remeasured if there is a modification, a change in the lease term, a change in the fixed lease payments, changes based on an index or rate or a change in the assessment to purchase the underlying asset. The Company presents right-of-use assets in the property, plant and mine development line item on the consolidated balance sheets and lease obligations in the lease obligations line item on the consolidated balance sheets. The Company has elected not to recognize right-of-use assets and lease obligations for leases that have a lease term of 12 months or less and do not contain a purchase option, for leases related to low value assets, or for leases with variable lease payments. Payments on short-term leases, leases of low value assets, and leases with variable payment amounts are recognized as an expense in the consolidated statements of income. I) Development Stage Expenditures Development stage expenditures are costs incurred to obtain access to proven and probable mineral reserves or mineral resources and provide facilities for extracting, treating, gathering, transporting and storing the minerals. The development stage of a mine commences when the technical feasibility and commercial viability of extracting the mineral resource has been determined. Costs that are directly attributable to mine development are capitalized as property, plant and mine development to the extent that they are necessary to bring the property to commercial production. Abnormal costs are expensed as incurred. Indirect costs are included only if they can be directly attributed to the area of interest. General and administrative costs are capitalized as part of the development expenditures when the costs are directly attributed to a specific mining development project. Commercial Production A mine construction project is considered to have entered the production stage when the mine construction assets are available for use. In determining whether mine construction assets are considered available for use, the criteria considered include, but are not limited to, the following: • completion of a reasonable period of testing mine plant and equipment; • ability to produce minerals in saleable form (within specifications); and • ability to sustain ongoing production of minerals. When a mine construction project moves into the production stage, amortization commences, the capitalization of certain mine construction costs ceases and expenditures are either capitalized to inventories or expensed as incurred. Exceptions include costs incurred for additions or improvements to property, plant and mine development and open-pit stripping activities. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 19 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) J) Impairment and Impairment Reversal of Long-lived Assets At the end of each reporting period the Company assesses whether there is any indication that long-lived assets other than goodwill may be impaired. If an indicator of impairment exists, the recoverable amount of the asset is calculated in order to determine if any impairment loss is required. If it is not possible to estimate the recoverable amount of the individual asset, assets are grouped at the CGU level for the purpose of assessing the recoverable amount. An impairment loss is recognized for any excess of the carrying amount of the CGU over its recoverable amount. If the CGU includes goodwill, the impairment loss related to a CGU is first allocated to goodwill and the remaining loss is allocated on a pro-rata basis to the remaining long-lived assets of the CGU based on their carrying amounts. Impairment losses are recorded in the consolidated statements of income in the period in which they occur. Any impairment charge that is taken on a long-lived asset other than goodwill is reversed if there are subsequent changes in the estimates or significant assumptions that were used to recognize the impairment loss that result in an increase in the recoverable amount of the CGU. If an indicator of impairment reversal has been identified, the recoverable amount of the asset is calculated in order to determine if any impairment reversal is required. A recovery is recognized to the extent the recoverable amount of the asset exceeds its carrying amount. The amount of the reversal is limited to the difference between the current carrying amount and the amount which would have been the carrying amount had the earlier impairment not been recognized and amortization of that carrying amount had continued. The impairment reversal is allocated on a pro-rata basis to the existing long- lived assets of the CGU based on their carrying amounts. Impairment reversals are recorded in the consolidated statements of income in the period in which they occur. K) Debt Debt is initially recorded at fair value, net of financing costs incurred. Debt is subsequently measured at amortized cost. Any difference between the amounts received and the redemption value of the debt is recognized in the consolidated statements of income over the period to maturity using the effective interest rate method. L) Reclamation Provisions Asset retirement obligations (“AROs”) arise from the acquisition, development and construction of mining properties and plant and equipment due to government controls and regulations that protect the environment on the closure and reclamation of mining properties. The major parts of the carrying amount of AROs relate to tailings and heap leach pad closure and rehabilitation, demolition of buildings and mine facilities, ongoing water treatment and ongoing care and maintenance of closed mines. The Company recognizes an ARO at the time the environmental disturbance occurs or a constructive obligation is determined to exist based on the Company’s best estimate of the timing and amount of expected cash flows expected to be incurred. When the ARO provision is recognized, the corresponding cost is capitalized to the related item of property, plant and mine development. Reclamation provisions that result from disturbance in the land to extract ore in the current period is included in the cost of inventories. The timing of the actual environmental remediation expenditures is dependent on a number of factors such as the life and nature of the asset, the operating licence conditions and the environment in which the mine operates. Reclamation provisions are measured at the expected value of future cash flows discounted to their present value using a risk-free interest rate. AROs are adjusted each period to reflect the passage of time (accretion). Accretion expense is recorded in finance costs each period. Upon settlement of an ARO, the Company records a gain or loss if the actual cost differs from the carrying amount of the ARO. Settlement gains or losses are recorded in the consolidated statements of income. Expected cash flows are updated to reflect changes in facts and circumstances. The principal factors that can cause expected cash flows to change are the construction of new processing facilities, changes in the quantities 20 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) of material in mineral reserves and mineral resources and a corresponding change in the life of mine plan, changing ore characteristics that impact required environmental protection measures and related costs, changes in water quality that impact the extent of water treatment required and changes in laws and regulations governing the protection of the environment. Each reporting period, provisions for AROs are remeasured to reflect any changes to significant assumptions, including the amount and timing of expected cash flows and risk-free interest rates. Changes to the reclamation provision resulting from changes in estimate are added to or deducted from the cost of the related asset, except where the reduction of the reclamation provision exceeds the carrying value of the related assets in which case the asset is reduced to nil and the remaining adjustment is recognized in the consolidated statements of income. Environmental remediation liabilities (“ERLs”) are differentiated from AROs in that ERLs do not arise from environmental contamination in the normal operation of a long-lived asset or from a legal or constructive obligation to treat environmental contamination resulting from the acquisition, construction or development of a long-lived asset. The Company is required to recognize a liability for obligations associated with ERLs arising from past acts. ERLs are measured by discounting the expected related cash flows using a risk-free interest rate. The Company prepares estimates of the timing and amount of expected cash flows when an ERL is incurred. Each reporting period, the Company assesses cost estimates and other assumptions used in the valuation of ERLs to reflect events, changes in circumstances and new information available. Changes in these cost estimates and assumptions have a corresponding impact on the value of the ERL. Any change in the value of ERLs results in a corresponding charge or credit to the consolidated statements of income. Upon settlement of an ERL, the Company records a gain or loss if the actual cost differs from the carrying amount of the ERL in the consolidated statements of income. M) Post-employment Benefits In Canada, the Company maintains a defined contribution plan covering all of its employees (the “Basic Plan”). The Basic Plan is funded by Company contributions based on a percentage of income for services rendered by employees. In addition, the Company has a supplemental plan for designated executives at the level of Vice- President or above (the “Supplemental Plan”). Under the Supplemental Plan, an additional 10.0% of the designated executives’ income is contributed by the Company. The Company provides a defined benefit retirement program (the “Retirement Program”) for certain eligible employees that provides a lump-sum payment upon retirement. The payment is based on age and length of service at retirement. An eligible employee is entitled to a benefit if they have completed more than 10 years as a permanent employee and have attained a minimum age of 57. The Retirement Program is not funded. The Company also provides a non-registered supplementary executive retirement defined benefit plan for certain current and former senior officers (the “Executives Plan”). The Executives Plan benefits are generally based on the employee’s years of service and level of compensation. Pension expense related to the Executives Plan is the net of the cost of benefits provided (including the cost of any benefits provided for past service), the net interest cost on the net defined liability/asset, and the effects of settlements and curtailments related to special events. Pension fund assets are measured at their current fair values. The costs of pension plan improvements are recognized immediately in expense when they occur. Remeasurements of the net defined benefit liability are recognized immediately in other comprehensive income and are subsequently transferred to retained earnings. The Company provides three defined benefit retirement plans for certain eligible employees in Mexico (the “Mexico Plans”) that provide a lump-sum payment upon retirement. The payment is based on age and length of service at retirement. Eligible employees are entitled to a benefit if they have completed 15 years of service as a permanent employee and are 60 years of age or older. The Mexico Plans are not funded. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 21 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Defined Contribution Plan The Company recognizes the contributions payable to a defined contribution plan in exchange for services rendered by employees as an expense, unless another policy requires or permits the inclusion of the contribution in the cost of an asset. After deducting contributions already paid, a liability is recorded throughout each period to reflect unpaid but earned contributions. If the contribution paid exceeds the contribution due for the service before the end of the reporting period, the Company recognizes that excess as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. Defined Benefit Plan Plan assets are measured at their fair value at the consolidated balance sheet date and are deducted from the present value of plan liabilities to arrive at a net defined benefit liability/asset. The defined benefit obligation reflects the expected future payments required to settle the obligation resulting from employee service in the current and prior periods. Current service cost represents the actuarially calculated present value of the benefits earned by the active employees in each period and reflects the economic cost for each period based on current market conditions. The current service cost is based on the most recent actuarial valuation. The net interest on the net defined benefit liability/asset is the change during the period in the defined benefit liability/asset that arises from the passage of time. Past service cost represents the change in the present value of the defined benefit obligation resulting from a plan amendment or curtailment. Past service costs from plan amendments that increase or decrease vested or unvested benefits are recognized immediately in net income at the earlier of when the related plan amendment occurs or when the entity recognizes related restructuring costs or termination benefits. Gains or losses on plan settlements are measured as the difference in the present value of the defined benefit obligation and settlement price. This results in a gain or loss being recognized when the benefit obligation settles. Actuarial gains and losses are recorded on the consolidated balance sheets as part of the benefit plan’s funded status. Gains and losses are recognized immediately in other comprehensive income and are subsequently transferred to retained earnings and are not recognized in net income. N) Contingent Liabilities and Other Provisions Provisions are recognized when a present obligation exists (legal or constructive), as a result of a past event, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the expenditure required to settle the obligation at the consolidated balance sheet date, measured using the expected cash flows discounted for the time value of money. The increase in provision (accretion) due to the passage of time is recognized as a finance cost in the consolidated statements of income. Contingent liabilities are possible obligations whose existence will be confirmed only on the occurrence or non- occurrence of uncertain future events outside the entity’s control, or present obligations that are not recognized because it is not probable that an outflow of economic benefits would be required to settle the obligation or the amount cannot be measured reliably. Contingent liabilities are not recognized but are disclosed and described in the notes to the consolidated financial statements, including an estimate of their potential financial effect and uncertainties relating to the amount or timing of any outflow, unless the possibility of settlement is remote. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, with assistance from its legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. 22 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) O) Stock-based Compensation The Company offers equity-settled awards (the employee stock option plan, incentive share purchase plan, restricted share unit plan and performance share unit plan) to certain employees, officers and directors of the Company. Employee Stock Option Plan (“ESOP”) The Company’s ESOP provides for the granting of options to directors, officers, employees and service providers to purchase common shares. Options have exercise prices equal to the market price on the day prior to the date of grant. The fair value of these options is recognized in the consolidated statements of income or in the consolidated balance sheets if capitalized as part of property, plant and mine development over the applicable vesting period as a compensation cost. Any consideration paid by employees on exercise of options or purchase of common shares is credited to share capital. Fair value is determined using the Black-Scholes option valuation model, which requires the Company to estimate the expected volatility of the Company’s share price and the expected life of the stock options. Limitations with existing option valuation models and the inherent difficulties associated with estimating these variables create difficulties in determining a reliable single measure of the fair value of stock option grants. The cost is recorded over the vesting period of the award to the same expense category as the award recipient’s payroll costs and the corresponding entry is recorded in equity. Equity-settled awards are not remeasured subsequent to the initial grant date. The dilutive impact of stock option grants is factored into the Company’s reported diluted net income per share. The stock option expense incorporates an expected forfeiture rate, estimated based on expected employee turnover. Incentive Share Purchase Plan (“ISPP”) Under the ISPP, directors (excluding non-executive directors), officers and employees (the “Participants”) of the Company may contribute up to 10.0% of their basic annual salaries and the Company contributes an amount equal to 50.0% of each Participant’s contribution. All common shares subscribed for under the ISPP are issued by the Company. The Company records an expense equal to its cash contribution to the ISPP. No forfeiture rate is applied to the amounts accrued. Where an employee leaves prior to the vesting date, any accrual for contributions by the Company during the vesting period related to that employee is reversed. Restricted Share Unit (“RSU”) Plan The RSU plan is open to directors and certain employees, including senior executives, of the Company. Common shares are purchased and held in a trust until the RSU has vested. The cost is recorded over the vesting period of the award to the same expense category as the award recipient’s payroll costs. The cost of the RSUs is recorded within equity until settled. Equity-settled awards are not remeasured subsequent to the initial grant date. Performance Share Unit (“PSU”) Plan The PSU plan is open to senior executives of the Company. PSUs are subject to vesting requirements based on specific performance measurements by the Company. PSUs awarded to eligible executives and may be settled in cash, common shares, or a combination thereof. They are measured at fair value at the grant date. The fair value of the estimated number of PSUs awarded that are expected to vest is recognized as share based compensation expense over the vesting period of the PSUs. If a PSU is cash-settled a corresponding amount is recorded as share based liabilities until the liability is settled through a cash payment. At each reporting date and on settlement, the share based liability is remeasured, with any changes in fair value recorded as compensation CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 23 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) expense. If a PSU is settled in common shares, the cost of the PSUs is recorded as equity until settled. Equity- settled awards are not remeasured subsequent to the initial grant date. Deferred Share Units (“DSU”) Plan The DSU Plan is for non-executive directors of the Company, which provides a cash payment, common shares, or a combination thereof on the date when a director ceases to be a director. The fair value of the DSUs awarded, representing the market price of the Company’s shares, is recognized as compensation expense at grant date, as the units vest immediately, with a corresponding amount recorded as a share based liability. Until the DSU liability is settled, the fair value of the DSUs is remeasured at the end of each reporting period and at the date of settlement, with changes in fair value recognized as compensation expense in the period. P) Revenue from Contracts with Customers 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 24 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) metal prices. These changes in the fair value of the receivable are adjusted through revenue from other sources at each subsequent financial statement date. 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. Q) Exploration and Evaluation Expenditures Exploration and evaluation expenditures are the costs incurred in the initial search for mineral deposits with economic potential or in the process of obtaining more information about existing mineral deposits. Exploration expenditures typically include costs associated with prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore. Evaluation expenditures are the costs incurred to establish the technical and commercial viability of developing mineral deposits identified through exploration activities or by acquisition. Exploration and evaluation expenditures are expensed as incurred unless it can be demonstrated that the project will generate future economic benefit. When it is determined that a project can generate future economic benefit the costs are capitalized in the property, plant and mine development line item in the consolidated balance sheets. The exploration and evaluation phase ends when the technical feasibility and commercial viability of extracting the mineral is demonstrable. R) Net Income Per Share Basic net income per share is calculated by dividing net income for a given period by the weighted average number of common shares outstanding during that same period. Diluted net income per share reflects the potential dilution that could occur if holders with rights to convert instruments to common shares exercise these rights. The weighted average number of common shares used to determine diluted net income per share includes an adjustment, using the treasury stock method, for stock options outstanding. Under the treasury stock method: • the exercise of options is assumed to occur at the beginning of the period (or date of issuance, if later); • the proceeds from the exercise of options plus the future period compensation expense on options granted are assumed to be used to purchase common shares at the average market price during the period; and • the incremental number of common shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) is included in the denominator of the diluted net income per share calculation. S) Income Taxes Current and deferred tax expenses are recognized in the consolidated statements of income except to the extent that they relate to a business combination, or to items recognized directly in equity or in other comprehensive income. Current tax expense is based on substantively enacted statutory tax rates and laws at the consolidated balance sheet date. Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the tax basis of such assets and liabilities measured using tax rates and laws that are substantively enacted at the consolidated balance sheet date and effective for the reporting period when the temporary differences are expected to reverse. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 25 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Deferred taxes are not recognized in the following circumstances: • where a deferred tax liability arises from the initial recognition of goodwill; • where a deferred tax asset or liability arises on the initial recognition of an asset or liability in a transaction which is not a business combination and, at the time of the transaction, affects neither net income nor taxable profits; and • for temporary differences relating to investments in subsidiaries and jointly controlled entities to the extent that the Company can control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognized for unused tax losses and tax credits carried forward and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized except as noted above. At each reporting period, previously unrecognized deferred tax assets are reassessed to determine whether it has become probable that future taxable profits will allow the deferred tax assets to be recovered. T) Comparative Figures Certain figures in the consolidated financial statements have been reclassified from statements previously presented to conform to the presentation of these financial statements as at and for the year ended December 31, 2021. U) Amendments to Accounting Standards Adopted During the Period Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) In May 2020, the IASB issued amendments to IAS 16 Property, Plant and Equipment that clarified the accounting for the net proceeds from selling any items produced while bringing an item of property, plant and mine development to the location and condition necessary for it to be capable of operating in the manner intended by management. The amendments clarified that entities were prohibited from deducting amounts received from selling items produced from the cost of property, plant and mine development while the Company is preparing the asset for its intended use. Instead, sales proceeds and the cost of producing these items must be recognized in the consolidated statements of income. The amendments are effective for annual reporting periods beginning on or after January 1, 2022. The amendments apply retrospectively, but only to assets brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the Company first applies the amendments. The Company adopted the standard on the effective date and applying it retrospectively to the fiscal year beginning January 1, 2021, restated certain amounts in prior periods. Adoption of the standard for prior periods resulted in an increase to revenue from mining operations from the sale of pre-commercial gold production of $45.7 million, an increase in production costs of $16.4 million, and an increase in income and mining taxes expense of $10.4 million during the year ended December 31, 2021, along with a corresponding net increase in the cost of property plant and mine development of $29.3 million and an increase in deferred income and mining tax liabilities of $10.4 million as at December 31, 2021. 4. SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates used in the preparation of the consolidated financial 26 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 4. SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS (Continued) statements are reasonable; however, actual results may differ materially from these estimates. The key areas where significant judgments, estimates and assumptions have been made are summarized below. Uncertainty due to the COVID-19 Pandemic The duration and full financial effect of the COVID-19 pandemic is unknown at this time, as are the measures taken by governments, the Company or others related to the COVID-19 pandemic. Any estimate of the length and severity of these developments is therefore subject to significant uncertainty and, accordingly estimates of the extent to which the COVID-19 pandemic may materially and adversely affect the Company’s operations, financial results and condition in future periods are also subject to significant uncertainty. Inputs and assumptions relate to, among other things, interest rates, foreign exchange rates, cost of capital, commodity prices, and the amount and timing of future cash flows, while accounting judgments take into consideration the business and economic uncertainties related to the COVID-19 pandemic and the future response of governments, the Company and others to those uncertainties. In the current environment, the inputs, assumptions and judgements are subject to greater variability than normal, which could in the future significantly affect judgments, estimates and assumptions made by management as they relate to potential impact of the COVID-19 pandemic on various financial accounts and note disclosures and could lead to a material adjustment to the carrying value of the assets or liabilities affected. The impact of current uncertainty on judgments, estimates and assumptions includes the Company’s valuation of the long-term assets (including the assessment for impairment and impairment reversal), estimation of reclamation provisions, estimation of mineral reserves and mineral resources, and estimation of income and mining taxes. Actual results may differ materially from these estimates. Impairment and Impairment Reversals The Company evaluates each asset or CGU (excluding goodwill, which is assessed for impairment annually regardless of indicators and is not eligible for impairment reversals) in each reporting period to determine if any indicators of impairment or impairment reversal exist. When completing an impairment test, the Company calculates the estimated recoverable amount of CGUs, which requires management to make estimates and assumptions with respect to items such as future production levels, operating and capital costs, long-term commodity prices, foreign exchange rates, discount rates, amounts of recoverable reserves, mineral resources and exploration potential and closure and environmental remediation costs. These estimates and assumptions are subject to risk and uncertainty, particularly in circumstances where there is limited operating history of the asset or CGU. Judgment is also required in determining the appropriate valuation method for mineralization, ascribing anticipated economics to mineralization in cases where only limited or no comprehensive economic study has been completed and selection of an appropriate NAV multiple. Therefore, there is a possibility that changes in circumstances will have an impact on these projections, which may impact the recoverable amount of assets or CGUs. Accordingly, it is possible that some or the entire carrying amount of the assets or CGUs may be further impaired or the impairment charge reversed with the impact recognized in the consolidated statements of income. Mineral Reserve and Mineral Resource Estimates Mineral reserves and mineral resources are estimates of the amount of ore that can be extracted from the Company’s mining properties. The estimates are based on information compiled by “qualified persons” as defined under the Canadian Securities Administrators’ National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Such an analysis relating to the geological and technical data on the size, depth, shape and grade of the ore body and suitable production techniques and recovery rates requires complex geological judgments to interpret the data. The estimation of mineral reserves and mineral resources is based upon factors such as estimates of commodity prices, future capital requirements and production costs, geological and metallurgical assumptions and judgments made in estimating the size and grade of the ore body and foreign exchange rates. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 27 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 4. SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS (Continued) As the economic assumptions used may change and as additional geological information is acquired during the operation of a mine, estimates of proven and probable mineral reserves may change. Such changes may affect the Company’s consolidated balance sheets and consolidated statements of income, including: • The carrying value of the Company’s property, plant and mine development and goodwill may be affected due to changes in estimated future cash flows; • Amortization charges in the consolidated statements of income may change where such charges are determined using the units-of-production method or where the useful life of the related assets change; • Capitalized stripping costs recognized in the consolidated balance sheets as either part of mining properties or as part of inventories or charged to income may change due to changes in the ratio of ore to waste extracted; • Reclamation provisions may change where changes to the mineral reserve and mineral resource estimates affect expectations about when such activities will occur and the associated cost of these activities; and • Mineral reserve and mineral resource estimates are used to calculate the estimated recoverable amounts of CGUs for impairment tests of goodwill and non-current assets. Exploration and Evaluation Expenditures The application of the Company’s accounting policy for exploration and evaluation expenditures requires judgment to determine whether future economic benefits are likely to arise and whether activities have reached a stage where the technical feasibility and commercial viability of extracting the mineral resource is demonstrable. Production Stage of a Mine As each mine is unique, significant judgment is required to determine the date that a mine enters the commercial production stage. The Company considers the factors outlined in Note 3(I) to these consolidated financial statements to make this determination. Contingencies Contingencies can be either possible assets or possible liabilities arising from past events which, by their nature, will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence and potential impact of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events. Reclamation Provisions Environmental remediation costs will be incurred by the Company at the end of the operating life of the Company’s mining properties. Management assesses its reclamation provision each reporting period and when new information becomes available. The ultimate environmental remediation costs are uncertain and cost estimates can vary in response to many factors, including estimates of the extent and costs of reclamation activities, technological changes, regulatory changes, cost increases as compared to the inflation rate and changes in discount rates. These uncertainties may result in future actual expenditures differing from the amount of the current provision. As a result, there could be significant adjustments to the provisions established that would affect future financial results. The reclamation provision at each reporting date represents management’s best estimate of the present value of the future environmental remediation costs required. Business Combinations Business combinations are accounted for using the acquisition method of accounting. The allocation of the purchase price requires estimates as to the fair value of acquired assets and liabilities. The information necessary to measure the fair values as at the acquisition date of assets acquired and liabilities assumed requires management to make certain judgments and estimates, including but not limited to the most appropriate valuation methodology, estimates of mineral 28 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 4. SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS (Continued) reserves and mineral resources and exploration potential of the assets acquired, value of resources outside LOM plans including assumptions for market values per ounce, future production levels, future operating costs, capital expenditures and closure costs, discount rates, future metal prices and long term foreign exchange rates. Changes to the preliminary measurements of assets and liabilities acquired may be retrospectively adjusted when new information is obtained until the final measurements are determined within one year of the acquisition date. Refer to note 5 for further details on acquisitions. Income and Mining Taxes Management is required to make estimates regarding the tax basis of assets and liabilities and related deferred income and mining tax assets and liabilities, amounts recorded for uncertain tax positions, the measurement of income and mining tax expense and estimates of the timing of repatriation of income. Several of these estimates require management to make assessments of future taxable profit and, if actual results are significantly different than the Company’s estimates, the ability to realize any deferred income and mining tax assets recorded on the consolidated balance sheets could be affected. Amortization Property, plant and mine development comprise a large portion of the Company’s total assets and as such the amortization of these assets has a significant effect on the Company’s consolidated financial statements. Amortization is charged according to the pattern in which an asset’s future economic benefits are expected to be consumed. The determination of this pattern of future economic benefits requires management to make estimates and assumptions about useful lives and residual values at the end of the asset’s useful life. Actual useful lives and residual values may differ significantly from current assumptions. Leases The Company applies judgment to determine the lease term for certain lease contracts that include renewal options. The assessment of whether the Company is reasonably certain to exercise such options impacts the lease term, which may significantly affect the amount of lease obligations and right-of-use assets recognized. Development Stage Expenditures The application of the Company’s accounting policy for development stage expenditures requires judgment to determine when the technical feasibility and commercial viability of extracting a mineral resource has been determined. Some of the factors that the Company may consider in its assessment of technical feasibility and commercial viability are set out below: • The level of geological certainty of the mineral deposit; • Life of mine (“LOM”) plans or economic models to support the economic extraction of reserves and mineral resources; • A preliminary economic assessment, prefeasibility study or feasibility study that demonstrates the reserves and mineral resources will generate a positive commercial outcome; • Reasonable expectations that operating permits will be obtained; and • Approval by the Board of development of the project. Joint Arrangements Judgment is required to determine when the Company has joint control of a contractual arrangement, which requires a continuous assessment of the relevant activities and when the decisions in relation to those activities require unanimous CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 29 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 4. SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS (Continued) consent. Judgment is also continually required to classify a joint arrangement as either a joint operation or a joint venture when the arrangement has been structured through a separate vehicle. Classifying the arrangement requires the Company to assess its rights and obligations arising from the arrangement. Specifically, the Company considers the legal form of the separate vehicle, the terms of the contractual arrangement and other relevant facts and circumstances. This assessment often requires significant judgment, and a different conclusion on joint control, or whether the arrangement is a joint operation or a joint venture, may have a material impact on the accounting treatment. Management evaluated its joint arrangement with Yamana Gold Inc. to each acquire 50.0% of the shares of Osisko (now CMC) under the principles of IFRS 11 – Joint Arrangements. The Company concluded that the arrangement qualified as a joint operation upon considering the following significant factors: • The joint operators are required to purchase all output from the investee and investee restrictions on selling the output to any third party; • The parties to the arrangement are substantially the only source of cash flow contributing to the continuity of the arrangement; and • If the selling price drops below cost, the joint operators are required to cover any obligations the Partnership cannot satisfy. 5. ACQUISITION Kirkland On February 8, 2022, the Company, acquired all of the issued and outstanding shares of Kirkland in exchange for the issuance of Agnico Eagle common shares to former Kirkland shareholders, pursuant to a plan of arrangement under the Business Corporations Act (Ontario) (the “Merger”). Each Kirkland shareholder received 0.7935 of a common share of Agnico as consideration for each Kirkland share, which resulted in the issuance of 209,274,263 Agnico common shares. Prior to the Merger, Kirkland owned and operated the Detour Lake and Macassa mines in Canada and the Fosterville mine in Australia, and also owned exploration properties in Canada and Australia. The acquisition of Kirkland increased the Company’s production, mineral reserves and cash flow. The Company determined that the Merger represented a business combination under IFRS 3 Business Combinations (“IFRS 3”), with Agnico identified as the acquirer and, as such, the Merger was accounted for using the acquisition method of accounting in accordance with IFRS 3. The aggregate purchase consideration for the acquired assets, net of the assumed liabilities is as follows: Fair value of common shares issued Fair value of replacement share based compensation issued $10,268,584 14,522 $10,283,106 The final estimates of fair value have been adjusted retrospectively to the acquisition date. Certain previously reported financial statement line items were updated to reflect the impact of the adjusted final estimates of fair value of assets acquired and liabilities assumed related to the Merger. 30 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 5. ACQUISITION (Continued) The following table sets out the final allocation of the purchase price to the assets acquired and liabilities assumed in the Merger based on management’s previously reported preliminary estimates and adjusted final estimates of fair value. Cash and cash equivalents Inventories Other current assets Property, plant and mine development Goodwill Other assets Accounts payable and accrued and other liabilities Reclamation provision Preliminary(i) Adjustments Final $ 838,732 $ – $ 838,732 384,678 100,094 (35,402) – 349,276 100,094 10,086,336 341,935 10,428,271 1,804,459 (168,128) 1,636,331 143,415 (235,778) (175,839) (1,628) 141,787 – (52,289) (235,778) (228,128) Deferred income and mining tax liabilities (2,639,353) (84,488) (2,723,841) Other liabilities Total assets acquired, net of liabilities assumed Note: (23,638) $10,283,106 $ – – (23,638) $10,283,106 (i) Estimates of the fair value of assets acquired and liabilities assumed are presented as reported in the Company’s condensed interim consolidated financial statements as at March 31, 2022. Goodwill represents the expected value of operational synergies and additional exploration potential arising from the Merger. None of the goodwill is expected to be deductible for income and mining tax purposes. The Company incurred acquisition-related and severance costs of $95.0 million in the year ended December 31, 2022 which are recorded in the other expenses line of the consolidated statements of income. The results of operations, cash flows and net assets of Kirkland have been consolidated with those of the Company from February 8, 2022. For the year ended December 31, 2022, Kirkland contributed revenue of $2,161.1 million and earnings before income and mining taxes of $799.2 million. Total consolidated revenue and earnings before income and mining taxes of the Company for the year ended December 31, 2022, were $5,741,2 million and $1,115.4 million, respectively. If the acquisition of Kirkland had taken place on January 1, 2022, pro forma total consolidated revenue and income before income and mining taxes for the Company would have been approximately $5,795.1 million and $1,131.1 million, respectively, for the year ended December 31, 2022. TMAC Resources (“TMAC”) On February 2, 2021, the Company completed the acquisition of all the issued and outstanding common shares and equity instruments exchangeable for common shares of TMAC under a plan of arrangement pursuant to the Business Corporations Act (Ontario). TMAC owned and operated the Hope Bay mine, and also owned exploration properties in the Kitikmeot region of Nunavut. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 31 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 5. ACQUISITION (Continued) Management determined that the assets and processes comprised a business and therefore accounted for the transaction as a business combination using the acquisition method of accounting. The aggregate purchase consideration for the acquired assets, net of the liabilities assumed is as follows: Purchase of TMAC common shares for C$2.20 per share $225,580 A fair value approach was applied by management in developing estimates of the amounts of identifiable assets of TMAC acquired and liabilities assumed. The final estimates of fair value have been adjusted retrospectively to the acquisition date. Certain previously reported financial statement line items for the three months ended March 31, 2021 were updated to reflect the impact of the adjusted final estimates of fair value of assets acquired and liabilities assumed related to the acquisition of TMAC. The following table sets out the allocation of the purchase price to the assets acquired and liabilities assumed based on management’s previously reported preliminary estimates and adjusted final estimates of fair value. Preliminary(i) Adjustments Final Cash and cash equivalents Restricted cash Inventories Other current assets Property, plant and mine development Deferred income tax asset Accounts payable and accrued and other liabilities(ii) Advance due to Agnico Eagle Reclamation provision $ 39,682 $ 21,796 84,576 2,028 206,507 109,700 (84,805) (105,000) (48,904) – – – – (23,397) 23,397 Total assets acquired, net of liabilities assumed $ 225,580 $ – – – – $ 39,682 21,796 84,576 2,028 183,110 133,097 (84,805) (105,000) (48,904) $ 225,580 Notes: (i) (ii) Preliminary estimates of the fair value of assets acquired and liabilities assumed are presented as reported in the Company’s condensed interim consolidated financial statements as at March 31, 2021. Included $50.0 million payable to repurchase the Hope Bay 1.5% net smelter return royalty. Immediately prior to the closing of the transaction and in accordance with its terms, TMAC’s long-term debt was repaid and the Company partially funded the repayment. The acquisition also triggered a one-time option for TMAC to buy-back a 1.5% net smelter return royalty on the Hope Bay property from Maverix Metals Inc. for $50.0 million, which was exercised prior to closing, with the payment made shortly after the acquisition date. The Company incurred acquisition-related costs of $2.9 million which were recorded in other expenses in the consolidated statements of income for the year ended December 31, 2021. 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 32 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 6. FAIR VALUE MEASUREMENT (Continued) 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. Assets and Liabilities Measured at Fair Value on a Recurring Basis 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 year ended December 31, 2022, 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 fair values of cash and cash equivalents and accounts payable and accrued liabilities approximate their carrying values due to their short-term nature. The following table sets out the Company’s financial assets and liabilities measured at fair value on a recurring basis as at December 31, 2022 using the fair value hierarchy: Financial assets: Trade receivables (Note 19) Equity securities (FVOCI) (Note 10) Share purchase warrants (FVPL) (Note 10) Fair value of derivative financial instruments (Note 21) Total financial assets Financial liabilities: Fair value of derivative financial instruments (Note 21) Total financial liabilities Level 1 Level 2 Level 3 Total $ – $ 8,579 $ 279,303 – – 25,315 28,124 8,774 $279,303 $70,792 $ $ – – $78,114 $78,114 $ $ $ – – – – – – – $ 8,579 304,618 28,124 8,774 $350,095 $ 78,114 $ 78,114 CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 33 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 6. FAIR VALUE MEASUREMENT (Continued) The following table sets out the Company’s financial assets and liabilities measured at fair value on a recurring basis as at December 31, 2021 using the fair value hierarchy: Financial assets: Trade receivables (Note 19) Equity securities (FVOCI) (Note 10) Share purchase warrants (FVPL) (Note 10) Fair value of derivative financial instruments (Note 21) Total financial assets Financial liabilities: Fair value of derivative financial instruments (Note 21) Total financial liabilities Valuation Techniques Trade Receivables Level 1 Level 2 Level 3 Total $ – $ 13,545 $ 244,876 – – 24,074 74,559 12,305 $244,876 $124,483 $ $ – – $ 22,089 $ 22,089 $ $ $ – – – – – – – $ 13,545 268,950 74,559 12,305 $369,359 $ 22,089 $ 22,089 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). 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 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 and Warrants The Company holds share purchase warrants of certain publicly traded entities. Share purchase warrants are accounted for as derivative financial instruments and are presented as part of investments in the consolidated balance sheet. 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. Fair Value of Financial Assets and Liabilities Not Measured and Recognized at Fair Value Long-term debt is recorded on the consolidated balance sheets at December 31, 2022 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 December 31, 2022, the Company’s long-term debt had a fair value of $1,261.5 million (2021 – $1,724.1 million) (Note 14). Lease obligations are recorded on the consolidated balance sheets at December 31, 2022 at amortized cost. The fair value of lease obligations is the present value of the future lease payments discounted at the Company’s current 34 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 6. FAIR VALUE MEASUREMENT (Continued) incremental borrowing rate. It is remeasured when there is a change in the lease term, future lease payments or changes in the assessment of whether the Company will exercise a purchase, extension or termination option. The fair value of lease obligations is not materially different from the carrying amounts as a result of the difference between the incremental borrowing rates used at the initial recognition date and the current market rates at December 31, 2022. Non-current loans receivable and other receivables are included in the other asset line item in the consolidated balance sheets at amortized cost. The fair value of loans and other receivables is the present value of future cash inflows discounted at a market interest rate. The fair value of these financial assets is not materially different from the carrying amounts as at December 31, 2022 (Note 8B). 7. INVENTORIES Ore in stockpiles and on leach pads Concentrates and dore bars Supplies Total current inventories Non-current ore in stockpiles and on leach pads (Note 8B)(i) Total inventories Note: As at December 31, 2022 As at December 31, 2021 $ 208,014 $ 140,288 184,841 816,220 125,738 612,918 $1,209,075 $ 878,944 405,988 274,576 $1,615,063 $1,153,520 (i) The inventory balance associated with the ore that is not expected to be processed within 12 months is classified as non-current and is recorded in the other assets line item in the consolidated balance sheets. During the year ended December 31, 2022, a charge of $62.4 million (2021 – $28.7 million) was recorded within production costs to reduce the carrying value of inventories to their net realizable value. 8. OTHER ASSETS A) Other Current Assets Federal, provincial and other sales taxes receivable Prepaid expenses Short term investments Other Total other current assets As at December 31, 2022 $100,267 110,649 9,896 39,140 As at December 31, 2021 $ 81,450 90,681 5,288 26,715 $259,952 $204,134 CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 35 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 8. OTHER ASSETS (Continued) B) Other Assets Non-current ore in stockpiles and on leach pads Non-current prepaid expenses Non-current loans receivable Intangible asset Investment in associate Other Total other assets As at December 31, 2022 As at December 31, 2021 $405,988 $274,576 26,102 3,939 13,318 10,732 6,831 $466,910 27,481 37,942 – – 13,199 $353,198 The Company currently has an intangible asset with a finite useful life which is amortized on a straight-line basis, which represents an electricity contract acquired as part of the Merger under which the Detour Lake mine is paying below market rates over a five year period. During the year ended December 31, 2022, the non-current loan receivable relating to the credit facility provided to Orla Mining Ltd. (“Orla”) was repaid in full and the Company received proceeds of $40.0 million. 36 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 9. PROPERTY, PLANT AND MINE DEVELOPMENT As at December 31, 2020 $ 2,159,413 $ 3,225,699 $ 1,940,306 $ 7,325,418 Mining Properties Plant and Equipment Mine Development Costs Total Additions IAS 16 Amendments Acquisition (Note 5) Disposals Amortization Transfers between categories As at December 31, 2021 Additions Acquisition (Note 5) Impairment loss (Note 24) Disposals Amortization Transfers between categories As at December 31, 2022 As at December 31, 2021 Cost(i) 76,403 29,314 91,204 – 183,670 684,804 – 91,906 (13,603) – – – (231,729) (414,353) (570) 194,247 (147,439) (193,677) 944,877 29,314 183,110 (13,603) (793,521) – $ 2,124,035 $ 3,267,566 $ 2,283,994 $ 7,675,595 409,562 506,102 691,167 1,606,831 7,582,824 2,845,447 (55,000) – (6) (25,964) – – – 10,428,271 (55,000) (25,970) (394,652) (603,671) (172,004) (1,170,327) 1,542 264,948 (266,490) – $ 9,668,305 $ 6,254,428 $ 2,536,667 $18,459,400 $ 3,863,284 $ 6,942,383 $ 3,289,532 $14,095,199 Accumulated amortization and impairments (1,739,249) (3,674,817) (1,005,538) (6,419,604) Carrying value – December 31, 2021(i) $ 2,124,035 $ 3,267,566 $ 2,283,994 $ 7,675,595 As at December 31, 2022 Cost $11,872,806 $10,490,684 $ 3,714,370 $26,077,860 Accumulated amortization and impairments (2,204,501) (4,236,256) (1,177,703) (7,618,460) Carrying value – December 31, 2022 $ 9,668,305 $ 6,254,428 $ 2,536,667 $18,459,400 Note: (i) Restated to reflect the retrospective application of IAS 16 (Note 3U). During the year ended December 31, 2022, net additions to Plant and Equipment included $59.6 million of right-of-use assets for lease arrangements entered into during the year (2021 – $41.0 million). CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 37 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 9. PROPERTY, PLANT AND MINE DEVELOPMENT (Continued) As at December 31, 2022, major assets under construction, and therefore not yet being depreciated, included in the carrying value of property, plant and mine development was $1,277.7 million (2021 – $579.3 million). During the year ended December 31, 2022, the Company disposed of property, plant and mine development with a carrying value of $25.9 million (2021 – $13.6 million). The net loss on disposal of $8.8 million (2021 – $9.5 million) was recorded in the other expenses line item in the consolidated statements of income. Geographic Information: Canada(i) Australia Finland Sweden Mexico United States As at December 31, 2022 As at December 31, 2021 $15,228,426 $5,558,800 1,188,301 1,447,399 13,812 573,922 7,540 – 1,435,881 13,812 659,469 7,633 Total property, plant and mine development $18,459,400 $7,675,595 Note: (i) Restated to reflect the retrospective application of IAS 16 (Note 3U). 10. INVESTMENTS Equity securities Share purchase warrants Total investments As at December 31, 2022 As at December 31, 2021 $304,618 28,124 $332,742 $268,950 74,559 $343,509 38 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 10. INVESTMENTS (Continued) The following tables set out details of the Company’s largest equity investments by carrying value: Rupert Resources Ltd. Orla Mining Ltd. Wallbridge Mining Company Ltd. White Gold Corp. Other(i) Total investments Orla Mining Ltd. Rupert Resources Ltd. White Gold Corp. Royal Road Minerals Ltd. Other(i) Total investments Note: As at December 31, 2022 Share purchase warrants Total – $105,324 27,152 122,700 – 6 966 11,499 9,829 83,390 Equity securities $105,324 95,548 11,499 9,823 82,424 $304,618 28,124 $332,742 As at December 31, 2021 Share purchase warrants Total $26,317 $116,291 42,768 119,651 99 – 5,375 17,502 12,849 77,216 Equity securities $ 89,974 76,883 17,403 12,849 71,841 $268,950 $74,559 $343,509 (i) The balance is comprised of 43 (2021 – 20) equity investments that are each individually immaterial. Disposal of Equity Securities There were no disposals of equity securities in the year ended December 31, 2022. During the year ended December 31, 2021, the Company sold its interest in certain equity securities, as they no longer fit the Company’s investment strategy. The fair value at the time of sale was $4.3 million and the Company recognized a cumulative net loss on disposal of $5.9 million ($5.1 million, net of tax). CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 39 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Trade payables Wages payable Accrued liabilities Other liabilities Total accounts payable and accrued liabilities As at December 31, 2022 As at December 31, 2021 $259,002 $189,069 135,156 215,710 62,635 70,584 104,551 50,469 $672,503 $414,673 In 2022 and 2021, the other liabilities balance consisted primarily of various employee benefits, employee payroll tax withholdings and other payroll taxes. 12. RECLAMATION PROVISION Agnico Eagle’s reclamation provision includes both asset retirement obligations and environmental remediation liabilities. Reclamation provision estimates are based on current legislation, third party estimates, management’s estimates and feasibility study calculations. Assumptions based on current economic conditions, which the Company believes are reasonable, have been used to estimate the reclamation provision. However, actual reclamation costs will ultimately depend on future economic conditions and costs for the necessary reclamation work. Changes in reclamation provision estimates during the period reflect changes in cash flow estimates as well as assumptions including discount and inflation rates. The discount rates used in the calculation of the reclamation provision at December 31, 2022 ranged between 3.16% and 4.34% (2021 – between – 0.36% and 1.56%). The following table reconciles the beginning and ending carrying amounts of the Company’s asset retirement obligations. The settlement of the obligation is estimated to occur through to 2142. Asset retirement obligations – non-current, beginning of year Asset retirement obligations – current, beginning of year Current year additions and changes in estimate, net(i) Current year accretion Liabilities settled Foreign exchange revaluation Reclassification from non-current to current, end of year Asset retirement obligations – non-current, end of year Note: (i) Current year additions include $180.4 million related to the acquisition of Kirkland. 40 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS As at December 31, 2022 As at December 31, 2021 $706,958 $635,648 4,547 217,506 15,951 (16,850) (40,666) (22,127) 11,320 72,181 6,554 (3,213) (10,985) (4,547) $865,319 $706,958 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 12. RECLAMATION PROVISION (Continued) The following table reconciles the beginning and ending carrying amounts of the Company’s environmental remediation liability. The settlement of the obligation is estimated to occur through to 2032. Environmental remediation liability – non-current, beginning of year Environmental remediation liability – current, beginning of year Current year additions and changes in estimate, net Liabilities settled Foreign exchange revaluation Reclassification from non-current to current, end of year As at December 31, 2022 As at December 31, 2021 $15,491 $16,135 3,000 – (3,058) (1,043) (1,381) 3,950 1,048 (2,816) 174 (3,000) Environmental remediation liability – non-current, end of year $13,009 $15,491 13. LEASES The Company is party to a number of contracts that contain a lease, most of which include office facilities, storage facilities, and various plant and equipment. Leases of low value assets, short term leases and leases with variable payments proportional to the rate of use of the underlying asset do not give rise to a lease obligation and a right-of-use asset. The expenses associated with such leases are included in operating costs in the consolidated statements of income. The following table sets out the carrying amounts of right-of-use assets included in property, plant and mine development in the consolidated balance sheets and the movements during the period: Balance, beginning of year Additions and modifications, net of disposals(i) Amortization Balance, end of year Note: (i) Current year additions to right-of-use assets include $23.2 million related to the acquisition of Kirkland (Note 5). As at December 31, 2022 As at December 31, 2021 $134,022 $112,715 59,598 (27,912) 41,024 (19,717) $165,708 $134,022 CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 41 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 13. LEASES (Continued) The following table sets out the lease obligations included in the consolidated balance sheets: Current Non-current Total lease obligations As at December 31, 2022 As at December 31, 2021 $ 36,466 114,876 $151,342 $ 32,988 98,445 $131,433 Future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms are set out in the table below. Because leases with variable lease payments do not give rise to fixed minimum lease payments, no amounts are included below for these leases. Within 1 year Between 1 – 3 years Between 3 – 5 years Thereafter Total undiscounted lease obligations As at December 31, 2022 As at December 31, 2021 $ 38,012 $ 33,952 43,439 21,637 54,258 37,825 16,674 47,807 $157,346 $136,258 The Company recognized the following amounts in the consolidated statements of income with respect to leases: Amortization of right-of-use assets Interest expense on lease obligations Variable lease payments not included in the measurement of lease obligations Expenses relating to short-term leases Expenses relating to leases of low value assets, excluding short-term leases of low value assets Year Ended December 31, 2022 2021 $ 27,912 $ 19,197 $ 2,919 $ 2,252 $115,890 $137,369 $ 11,081 $ 1,663 $ $ 3,883 1,105 During the year ended December 31, 2022, the Company recognized $242.5 million (2021 – $290.8 million) in the consolidated statements of cash flows with respect to leases. 42 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 14. LONG-TERM DEBT Credit Facility(i)(ii) 2020 Notes(i)(iii) 2018 Notes(i)(iii) 2017 Notes(i)(iii) 2016 Notes(i)(iii) 2015 Note(i)(iii) 2012 Notes(i)(iii) 2010 Notes(i)(iii) Total debt Less: current portion Total long-term debt As at December 31, 2022 As at December 31, 2021 $ (3,115) $ (3,851) 198,798 348,487 298,886 349,316 49,821 99,877 – 198,585 348,316 298,670 349,053 49,755 199,745 124,950 $1,342,070 $1,565,223 100,000 225,000 $1,242,070 $1,340,223 Inclusive of unamortized deferred financing costs. Notes: (i) (ii) There were no amounts outstanding under the Credit Facility (as defined below) as at December 31, 2022 and December 31, 2021. The December 31, 2022 and December 31, 2021 balances relate to deferred financing costs which are being amortized on a straight-line basis until the maturity date of December 22, 2026 (2021 – December 22, 2026). (iii) The terms 2020 Notes, 2018 Notes, 2017 Notes, 2016 Notes, 2015 Note, 2012 Notes and 2010 Notes are defined below. Scheduled Debt Principal Repayments 2023 2024 2025 2026 2027 Thereafter Total $ – – – 100,000 – – $ – – – – – 100,000 $ – – 40,000 $ – – – $ – – 100,000 – 200,000 50,000 – – – – – – $200,000 $ 200,000 350,000 160,000 50,000 – – 350,000 300,000 350,000 50,000 100,000 $100,000 $100,000 $90,000 $200,000 $100,000 $760,000 $1,350,000 2020 Notes 2018 Notes 2017 Notes 2016 Notes 2015 Note 2012 Notes Total Credit Facility On December 22, 2021, the Company amended its $1.2 billion unsecured revolving bank credit facility (the “Credit Facility”) to, among other things, extend the maturity date from June 22, 2023 to December 22, 2026 and amend pricing terms. The amendment also increased the amount of the uncommitted accordion facility available to the Company from $300 million to $600 million. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 43 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 14. LONG-TERM DEBT (Continued) As at December 31, 2022 and December 31, 2021, no amounts were outstanding under the Credit Facility. As at the Credit Facility December 31, 2022, $1,199.1 million was available for (December 31, 2021 – $1,199.1 million). Credit Facility availability is reduced by outstanding letters of credit which were $0.9 million as at December 31, 2022 (2021 – $0.9 million). During the year ended December 31, 2022, Credit Facility drawdowns totaled $100.0 million and repayments totaled $100.0 million. During the year ended December 31, 2021, Credit Facility drawdowns totaled $595.0 million and repayments totaled $595.0 million. future drawdown under The Credit Facility is available in multiple currencies through prime rate and base rate advances, priced at the applicable rate plus a margin that ranges from 0.00% to 1.00%, through LIBOR (or its replacement) advances, bankers’ acceptances and financial letters of credit, priced at the applicable rate plus a margin that ranges from 1.00% to 2.00% and through performance letters of credit, priced at the applicable rate plus a margin that ranges from 0.60% to 1.20%. The lenders under the Credit Facility are each paid a standby fee at a rate that ranges from 0.09% to 0.25% of the undrawn portion of the facility. In each case, the applicable margin or standby fees vary depending on the Company’s credit rating and/or the Company’s total net debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio. 2020 Notes On April 7, 2020, the Company closed a $200.0 million private placement of guaranteed senior unsecured notes (the “2020 Notes”) with a weighted average maturity of 11 years and weighted average yield of 2.83%. The following table sets out details of the individual series of the 2020 Notes: Series A Series B Total 2018 Notes Principal Interest Rate Maturity Date $100,000 100,000 $200,000 2.78% 2.88% 4/7/2030 4/7/2032 On April 5, 2018, the Company closed a $350.0 million private placement of guaranteed senior unsecured notes (the “2018 Notes”). The following table sets out details of the individual series of the 2018 Notes: Series A Series B Series C Total Principal Interest Rate Maturity Date $ 45,000 55,000 250,000 $350,000 4.38% 4.48% 4.63% 4/5/2028 4/5/2030 4/5/2033 44 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 14. LONG-TERM DEBT (Continued) 2017 Notes On June 29, 2017, the Company closed a $300.0 million private placement of guaranteed senior unsecured notes (the “2017 Notes”). The following table sets out details of the individual series of the 2017 Notes: Series A Series B Series C Series D Total 2016 Notes Principal Interest Rate Maturity Date $ 40,000 100,000 150,000 10,000 $300,000 4.42% 4.64% 4.74% 4.89% 6/29/2025 6/29/2027 6/29/2029 6/29/2032 On June 30, 2016, the Company closed a $350.0 million private placement of guaranteed senior unsecured notes (the “2016 Notes”). The following table sets out details of the individual series of the 2016 Notes: Series A Series B Series C Total 2015 Note Principal Interest Rate Maturity Date $100,000 200,000 50,000 $350,000 4.54% 4.84% 4.94% 6/30/2023 6/30/2026 6/30/2028 On September 30, 2015, the Company closed a private placement of a $50.0 million guaranteed senior unsecured note (the “2015 Note”) with a September 30, 2025 maturity date and a yield of 4.15%. 2012 Notes On July 24, 2012, the Company closed a $200.0 million private placement of guaranteed senior unsecured notes (the “2012 Notes”). On July 25, 2022 the Company repaid $100.0 million of the 2012 Series A 4.87% Notes at maturity. As at December 31, 2022, $100.0 million of the 2012 Series B 5.02% Notes remained outstanding with a maturity date of July 23, 2024. 2010 Notes On April 7, 2010, the Company closed a $600.0 million private placement of guaranteed senior unsecured notes (the “2010 Notes” and, together with the 2020 Notes, 2018 Notes, the 2017 Notes, the 2016 Notes, the 2015 Note and the 2012 Notes, the “Notes”). CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 45 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 14. LONG-TERM DEBT (Continued) On April 7, 2022 the Company repaid $125.0 million of December 31, 2022, the principal amount of the 2010 Notes was fully repaid. the 2010 Series C 6.77% notes at maturity. As at Covenants Payment and performance of Agnico Eagle’s obligations under the Credit Facility and the Notes are guaranteed by each of its material subsidiaries and certain of its other subsidiaries (the “Guarantors”). The Credit Facility contains covenants that limit, among other things, the ability of the Company to incur additional indebtedness, make distributions in certain circumstances and sell material assets. The note purchase agreements pursuant to which the Notes were issued (the “Note Purchase Agreements”) 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 Credit Facility and Note Purchase Agreements also require the Company to maintain a total net debt to EBITDA ratio below a specified maximum value and the Note Purchase Agreements (other than the 2018 and 2020 Notes) require the Company to maintain a minimum tangible net worth. The Company was in compliance with all covenants contained in the Credit Facility and Note Purchase Agreements throughout the years-ended and as at December 31, 2022 and 2021. Finance Costs Total finance costs consist of the following: Interest on Notes Stand-by fees on credit facilities Amortization of credit facilities financing and note issuance costs Interest on Credit Facility Accretion expense on reclamation provisions Interest on lease obligations, other interest and penalties Interest capitalized to assets under construction Total finance costs Year Ended December 31, 2022 2021 $64,481 $72,795 3,859 3,042 536 15,951 (1,290) (3,644) 5,546 3,778 1,549 6,554 5,329 (3,509) $82,935 $92,042 Total borrowing costs capitalized to assets under construction during the year ended December 31, 2022 were at a capitalization rate of 1.16% (2021 – 1.20%). 46 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 15. OTHER LIABILITIES Other liabilities consist of the following: Pension benefit obligations Other Total other liabilities Defined Benefit Obligations As at December 31, 2022 As at December 31, 2021 $53,024 19,591 $72,615 $51,210 19,051 $70,261 The Company provides the Executives Plan for certain current and former senior officers, the Retirement Program for eligible employees in Canada, and the Mexico Plans for eligible employees in Mexico, each of which are considered defined benefit plans under IAS 19 – Employee Benefits. The funded status of the plans are based on actuarial valuations performed as at December 31, 2022. The plans operate under similar regulatory frameworks and generally face similar risks. The Executives Plan pension formula is based on final average earnings in excess of the amounts payable from the registered plan. Assets for the Executives Plan consist of deposits on hand with regulatory authorities that are refundable when benefit payments are made or on the ultimate wind-up of the plan. The Company provides a Retirement Program for certain eligible employees that provides a lump-sum payment upon retirement. The payment is based on age and length of service at retirement. An eligible employee is entitled to a benefit if they have completed at least 10 years of service as a permanent employee and are 57 years of age or older. The Retirement Program is not funded. The Mexico Plans provide a lump-sum payment upon retirement. The payment is based on age and length of service at retirement. Eligible employees are entitled to a benefit if they have completed 15 years of service as a permanent employee and are 60 years of age or older. The Mexico Plans are not funded. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 47 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 15. OTHER LIABILITIES (Continued) The funded status of the Company’s defined benefit obligations for 2022 and 2021, is as follows: Year Ended December 31, 2022 2021 $ 2,905 $ 2,768 1,713 (1,473) (120) 87 (87) (190) 3,584 (3,325) (130) 72 (72) 8 $ 2,835 $ 2,905 $44,844 $44,105 2,976 – (1,473) 1,797 (7,028) 772 6,363 (1,518) 46,733 2,624 5,351 (3,325) 1,240 (2,785) 992 (2,842) (516) 44,844 $43,898 $41,939 Reconciliation of plan assets: Plan assets, beginning of year Employer contributions Benefit payments Administrative expenses Interest on assets Net return on assets excluding interest Effect of exchange rate changes Plan assets, end of year Reconciliation of defined benefit obligation: Defined benefit obligation, beginning of year Current service cost Past service cost Benefit payments Interest cost Actuarial gains arising from changes in economic assumptions Actuarial losses arising from changes in demographic assumptions Actuarial losses (gains) arising from Plan experience Effect of exchange rate changes Defined benefit obligation, end of year Net defined benefit liability, end of year 48 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 15. OTHER LIABILITIES (Continued) The components of Agnico Eagle’s pension expense recognized in the consolidated statements of net income relating to the defined benefit plans are as follows: Current service cost Past service cost Administrative expenses Interest cost on defined benefit obligation Interest on assets Pension expense Year Ended December 31, 2022 $2,976 – 120 1,797 (87) 2021 $2,624 5,351 130 1,240 (72) $4,806 $9,273 The remeasurements of the net defined benefit liability recognized in other comprehensive income relating to the Company’s defined benefit plans are as follows: Actuarial gains relating to the defined benefit obligation Net return on assets excluding interest Total remeasurements of the net defined benefit liability Year Ended December 31, 2022 $107 87 $194 2021 $(4,634) 72 $(4,562) In 2023, the Company expects to make contributions of $2.8 million and benefit payments of $2.8 million, in aggregate, related to the defined benefit plans. The weighted average duration of the Company’s defined benefit obligation in Canada is 13.0 years at December 31, 2022 (2021 – 12.6 years). The weighted average duration of the Company’s defined benefit obligation for the Mexico Plans is 4.9 years at December 31, 2022 (2021 – 5.9 years). The following table sets out significant assumptions used in measuring the Company’s Executives Plan defined benefit obligations: Assumptions: Discount rate – beginning of year Discount rate – end of year As at December 31, 2022 As at December 31, 2021 3.0% 5.0% 2.5% 3.0% CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 49 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 15. OTHER LIABILITIES (Continued) The following table sets out significant assumptions used in measuring the Company’s Retirement Program defined benefit obligations: Assumptions: Discount rate – beginning of year Discount rate – end of year Range of mine closure dates Termination of employment per annum As at December 31, 2022 As at December 31, 2021 2.5% 5.0% 1.8% 2.5% 2026 – 2036 2026 – 2032 2.0% – 10.0% 2.0% – 10.0% The following table sets out significant assumptions used in measuring the Company’s defined benefit obligations for the Mexico Plans: Assumptions: Discount rate Range of mine closure dates As at December 31, 2022 As at December 31, 2021 9.5% 7.5% 2024 – 2027 2023 – 2027 Other significant actuarial assumptions used in measuring the Company’s Retirement Program defined benefit obligations as at December 31, 2022 and December 31, 2021 include assumptions of the expected retirement age of participants. The following table sets out the effect of changes in significant actuarial assumptions on the Company’s defined benefit obligations: Change in assumption: 0.5% increase in discount rate 0.5% decrease in discount rate As at December 31, 2022 $(1,559) $ 1,671 The summary of the effect of changes in significant actuarial assumptions was prepared using the same methods and actuarial assumptions as those used for the calculation of the Company’s defined benefit obligation related to the Executives Plan, the Retirement Program and the Mexico Plans as at the end of the fiscal year, except for the change in the single actuarial assumption being evaluated. The modification of several actuarial assumptions at the same time could lead to different results. 50 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 15. OTHER LIABILITIES (Continued) Other Plans In addition to its defined benefit pension plans, the Company maintains two defined contribution plans – the Basic Plan and the Supplemental Plan. Under the Basic Plan, Agnico Eagle contributes 5.0% of certain employees’ base employment compensation to a defined contribution plan. In 2022, $18.6 million (2021 – $17.0 million) was contributed to the Basic Plan, $0.3 million of which related to contributions for key management personnel (2021 – $0.2 million). The Company also maintains the Supplemental Plan for designated executives at the level of Vice-President or above. The Supplemental Plan is funded by the Company through notional contributions equal to 10.0% of the designated executive’s earnings for the year (including salary and short-term bonus). In 2022, the Company made $2.0 million (2021 – $1.5 million) in notional contributions to the Supplemental Plan, $1.4 million (2021 – $0.9 million) of which related to contributions for key management personnel. The Company’s liability related to the Supplemental Plan is $10.3 million at December 31, 2022 (2021 – $10.6 million). At retirement date, the notional account balance is converted to a pension payable in five annual installments. 16. EQUITY Common Shares The Company’s authorized share capital includes an unlimited number of common shares with no par value. As at December 31, 2022, Agnico Eagle’s issued common shares totaled 457,160,104 (December 31, 2021 – 245,435,804), of which 694,808 common shares are held in trusts as described below (2021 – 433,947). The common shares held in trusts relate to the Company’s RSU plan, PSU plan and a Long Term Incentive Plan (“LTIP”) for certain employees of the Partnership and CMC. The trusts have been evaluated under IFRS 10 – Consolidated Financial Statements and are consolidated in the accounts of the Company, with shares held in trust offset against the Company’s issued shares in its consolidated financial statements. The common shares purchased and held in trusts are excluded from the basic net income per share calculations until they have vested. All of the non-vested common shares held in trusts are included in the diluted net income per share calculations, unless the impact is anti-dilutive. On April 28, 2022, the Company received approval from the Toronto Stock Exchange to establish an NCIB. The Company has authorized purchases under the NCIB of the lesser of (i) 5% of the issued and outstanding common shares on the date of commencement of the NCIB and (ii) such number of common shares that may be purchased for an aggregate purchase price, excluding commissions, of $500.0 million, during the period starting on May 4, 2022 and ending May 3, 2023. During the year ended December 31, 2022, the Company repurchased and cancelled 1,569,620 common shares for $69.9 million at an average price of $44.53 under the NCIB. The book value of the cancelled shares was $55.9 million and was treated as a reduction to common share capital. The portion of the consideration paid for the repurchased shares in excess of their book value, $14.0 million, was treated as a reduction from contributed surplus. The following table sets out the maximum number of common shares that would be outstanding if all dilutive instruments outstanding as at December 31, 2022 were exercised: Common shares outstanding at December 31, 2022 Employee stock options Common shares held in trusts in connection with the RSU plan (Note 17C), PSU plan (Note 17D) and LTIP Total 456,465,296 4,976,636 694,808 462,136,740 CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 51 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 16. EQUITY (Continued) 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: Net income for the year – basic and diluted Weighted average number of common shares outstanding – basic (in thousands) Add: Dilutive impact of common shares related to the RSU plan, PSU plan and LTIP Add: Dilutive impact of employee stock options Weighted average number of common shares outstanding – diluted (in thousands) Net income per share – basic Net income per share – diluted Year Ended December 31, 2022 2021 $670,249 $561,945 437,678 243,708 738 117 598 426 438,533 244,732 $ $ 1.53 1.53 $ $ 2.31 2.30 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 year ended December 31, 2022, 4,194,765 (2021 – 2,806,786) employee stock options were excluded from the calculation of diluted net income per share as their impact would have been anti-dilutive. 17. STOCK-BASED COMPENSATION A) Employee Stock Option Plan (“ESOP”) The Company’s ESOP provides for the grant of stock options to directors, officers, employees and service providers to purchase common shares. Under the ESOP, stock options are granted at the fair market value of the underlying shares on the day prior to the date of grant. The number of common shares that may be reserved for issuance to any one person pursuant to stock options (under the ESOP or otherwise), warrants, share purchase plans or other arrangements may not exceed 5.0% of the Company’s common shares issued and outstanding at the date of grant. On April 24, 2001, the Compensation Committee of the Board adopted a policy pursuant to which stock options granted after that date have a maximum term of five years. In 2021, the shareholders approved a resolution to increase the number of common shares reserved for issuance under the ESOP to 38,700,000 common shares. Of the 1,643,801 stock options granted under the ESOP in 2022, 410,950 stock options vested within 30 days of the grant date. The remaining stock options, all of which expire in 2027, vest in equal installments on each anniversary date of the grant over a three-year period. Of the 1,590,750 stock options granted under the ESOP in 2021, 397,668 stock options vested within 30 days of the grant date. The remaining stock options, all of which expire in 2026, vest in equal installments on each anniversary date of the grant over a three-year period. Upon the exercise of stock options under the ESOP, the Company issues common shares from treasury to settle the obligation. 52 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 17. STOCK-BASED COMPENSATION (Continued) The following table sets out activity with respect to Agnico Eagle’s outstanding stock options: Year Ended December 31, 2022 Year Ended December 31, 2021 Number of Stock Options Weighted Average Exercise Price Number of Stock Options Weighted Average Exercise Price Outstanding, beginning of year 4,482,941 C$74.43 3,421,404 C$65.27 Granted Exercised Forfeited 1,643,801 (944,989) (205,117) 67.10 57.68 78.08 1,590,750 (471,765) (57,448) 89.59 58.40 80.35 Outstanding, end of year 4,976,636 C$75.04 4,482,941 C$74.43 Options exercisable, end of year 2,706,334 C$73.76 2,077,187 C$68.28 The average share price of Agnico Eagle’s common shares during the year ended December 31, 2022 was C$64.87 (2021 – C$76.00). The weighted average grant date fair value of stock options granted in 2022 was C$11.09 (2021 – C$18.95). The following table sets out information about Agnico Eagle’s stock options outstanding and exercisable as at December 31, 2022: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price C$55.10 – C$58.04 C$67.19 – C$89.59 C$55.10 – C$89.59 781,871 0.95 years C$55.09 781,871 0.95 years C$ 55.1 4,194,765 3.10 years 78.76 1,924,463 2.78 years 81.34 4,976,636 2.76 years C$75.04 2,706,334 2.25 years C$73.76 The Company has reserved for issuance 4,976,636 common shares in the event that these stock options are exercised. The number of common shares available for the grant of stock options under the ESOP as at December 31, 2022 was 3,630,064. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 53 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 17. STOCK-BASED COMPENSATION (Continued) Agnico Eagle estimated the fair value of stock options under the Black-Scholes option pricing model using the following weighted average assumptions: Risk-free interest rate Expected life of stock options (in years) Expected volatility of Agnico Eagle’s share price Expected dividend yield Year Ended December 31, 2022 1.65% 2.4 30.0% 2.9% 2021 0.54% 2.4 38.0% 2.2% 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. Compensation expense related to the ESOP amounted to $15.8 million for the year ended December 31, 2022 (2021 – $20.2 million). Subsequent to the year ended December 31, 2022, 873,950 stock options were granted under the ESOP, of which 218,488 stock options vested within 30 days of the grant date. The remaining stock options, all of which expire in 2028, vest in equal installments on each anniversary date of the grant over a three-year period. B) Incentive Share Purchase Plan (“ISPP”) On June 26, 1997, the Company’s shareholders approved the ISPP to encourage Participants to purchase Agnico Eagle’s common shares at market value. In 2009, the ISPP was amended to remove non-executive directors as eligible Participants. Under the ISPP, Participants may contribute up to 10.0% of their basic annual salaries and the Company contributes an amount equal to 50.0% of each Participant’s contribution. All common shares subscribed for under the ISPP are issued by the Company. The total compensation cost recognized in 2022 related to the ISPP was $10.1 million (2021 – $9.2 million). In 2022, 615,069 common shares were subscribed for under the ISPP (2021 – 497,767) for a value of $30.3 million (2021 – $27.5 million). In April 2022, the Company’s shareholders approved an increase in the maximum number of common shares reserved for issuance under the ISPP to 9,600,000 from 8,100,000. As at December 31, 2022, Agnico Eagle has reserved for issuance 1,257,533 common shares (2021 – 372,602) under the ISPP. C) Restricted Share Unit (“RSU”) Plan In 2009, the Company implemented the RSU plan for certain employees. Effective January 1, 2012, the RSU plan was amended to include directors and senior executives of the Company as eligible participants. A deferred compensation balance is recorded for the total grant date value on the date of each RSU plan grant. The deferred compensation balance is recorded as a reduction of equity and is amortized as compensation expense over the vesting period of up to three years. In 2022, 656,091 (2021 – 317,114) RSUs were granted with a grant date fair value of $46.84 (2021 – $74.45). In 2022, the Company funded the RSU plan by transferring $31.6 million (2021 – $23.6 million) to an employee benefit trust that then purchased common shares of the Company in the open market. The grant date fair value 54 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 17. STOCK-BASED COMPENSATION (Continued) of the RSUs generally approximates the cost of purchasing the shares in the open market. Once vested, the common shares in the trust are distributed to settle the obligation along with a cash payment reflecting the accumulated amount that would have been paid as dividends had the common shares been outstanding. On February 8, 2022, all outstanding Kirkland RSUs were converted to 324,884 Agnico RSUs in connection with the Merger (Note 5). These RSU’s are accounted for as cash-settled share based liabilities. At each reporting date, and on settlement, the share based liabilities are remeasured, with changes in fair value recognized as compensation expense in the period. Compensation expense related to the RSU plan was $27.5 million in 2022 (2021 – $21.5 million). Compensation expense related to the RSU plan is included in the production and general and administrative line items, as applicable, in the consolidated statements of income. Subsequent to the year ended December 31, 2022, 170,448 RSUs were granted under the RSU plan. D) Performance Share Unit (“PSU”) Plan Beginning in 2016, the Company adopted a PSU plan for senior executives of the Company. PSUs are subject to vesting requirements over a three-year period based on specific performance measurements established by the Company. The Company has historically settled awards under the PSU plan with equity and accounted for them accordingly, however granted units that vested in 2022 were subsequently settled in cash, resulting in a change in their accounting to cash-settled share based liabilities. The fair value of the share based liability recognized on modification of $17.9 million was recognized as a direct charge to shareholders’ equity on the date of modification. All remaining and future grants under the PSU plan will be accounted for as cash-settled awards. At each reporting date and on settlement, the share based liabilities are remeasured, with changes in fair value recognized as share based compensation expense in the period. In 2022, 157,500 (2021 – 148,500) PSUs were granted with a grant date fair value of $62.26 (2021 – $92.75). The Company funded the PSU plan by transferring $8.3 million (2021 – $11.1 million) to an employee benefit trust that then purchased common shares of the Company in the open market. On February 8, 2022, all outstanding Kirkland PSUs were converted to 324,308 Agnico PSUs in connection with the Merger (Note 5). These PSU’s are accounted for as cash-settled share based liabilities. Compensation expense related to the PSU plan was $16.3 million in 2022 (2021 – $10.4 million). Compensation expense related to the PSU plan is included in the production and general and administrative line items, as applicable, in the consolidated statements of income. E) Deferred Share Unit (“DSU”) Plan On February 8, 2022, all outstanding Kirkland DSUs were converted to 91,840 Agnico DSUs in connection with the Merger (Note 5). The DSU Plan is for non-executive directors of the Company and provides a cash payment, common shares, or a combination thereof on the date when a director ceases to be a director. These DSUs are classified as cash-settled share based liabilities. The fair value of the share based liabilities are remeasured at the end of each reporting period and at the date of settlement, with changes in fair value recognized as compensation expense or recovery in the period. Compensation expense related to the converted DSUs was $0.7 million for the year ended December 31, 2022. Charges related to the DSU plan are included in the general and administrative line item of the consolidated statements of income. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 55 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 18. OTHER RESERVES The following table sets out the movements in other reserves for the year ended December 31, 2022 and 2021: Balance at December 31, 2020 Net change in cash flow hedge reserve Transfer of net loss on disposal of equity securities to deficit Net change in fair value of equity securities Balance at December 31, 2021 Net change in cash flow hedge reserve Net change in fair value of equity securities Balance at December 31, 2022 Equity securities reserve Cash flow hedge reserve Total $ 97,216 $(11,964) $ 85,252 – 5,057 (37,208) 1,175 – – 1,175 5,057 (37,208) $ 65,065 $(10,789) $ 54,276 – 2,301 2,301 (85,583) – (85,583) $(20,518) $ (8,488) $(29,006) The cash flow hedge reserve represents the settlement of an interest rate derivative related to the Senior Notes issued in 2020. The reserve will be amortized over the term of the Notes. Amortization of the reserve is included in the finance costs line item in the consolidated statements of income. 19. REVENUES FROM MINING OPERATIONS AND TRADE RECEIVABLES Agnico Eagle is a gold mining company with mining operations in Canada, Australia, Finland and Mexico. The Company earns a significant proportion of its revenues 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. The revenue from by-product metals is primarily generated by production at the LaRonde mine in Canada (silver, zinc and copper) and the Pinos Altos mine in Mexico (silver). The cash flow and profitability of the Company’s operations are significantly affected by the market price of gold and, to a lesser extent, silver, zinc and copper. The prices of these metals can fluctuate significantly and are affected by numerous factors beyond the Company’s control. During the year ended December 31, 2022, five customers each contributed more than 10.0% of total revenues from mining operations for a combined total of approximately 86.8% of revenues from mining operations. However, because gold can be sold through numerous gold market traders worldwide, the Company is not economically dependent on a limited number of customers for the sale of its product. 56 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 19. REVENUES FROM MINING OPERATIONS AND TRADE RECEIVABLES (Continued) The following table sets out sales to individual customers that exceeded 10.0% of revenues from mining operations: Customer 1 Customer 2 Customer 3 Customer 4 Customer 5 Year Ended December 31, 2022 2021 $1,468,563 $1,127,187 1,159,679 948,686 760,648 645,088 858,983 733,177 586,196 – Total sales to customers exceeding 10.0% of revenues from mining operations $4,982,664 $3,305,543 Percentage of total revenues from mining operations 86.8% 85.4% Trade receivables are recognized once the transfer of control for the metals sold has occurred and reflect the amounts owing to the Company in respect of its sales of concentrates to third parties prior to the satisfaction in full of the payment obligations of the third parties. As at December 31, 2022, the Company had $8.6 million (2021 – $13.5 million) in receivables relating to provisionally priced concentrate sales. The Company has recognized the following amounts relating to revenue in the consolidated statements of income: Revenue from contracts with customers Provisional pricing adjustments on concentrate sales Total revenues from mining operations The following table sets out the disaggregation of revenue by metal: Revenues from contracts with customers: Gold Silver Zinc Copper Total revenues from contracts with customers Year Ended December 31, 2022 2021 $5,742,768 $3,867,430 (1,606) 2,195 $5,741,162 $3,869,625 Year Ended December 31, 2022 2021 $5,656,741 $3,760,664 54,944 10,880 20,203 69,876 13,679 23,211 $5,742,768 $3,867,430 CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 57 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 19. REVENUES FROM MINING OPERATIONS AND TRADE RECEIVABLES (Continued) In 2022, precious metals (gold and silver) accounted for 99.5% of Agnico Eagle’s revenues from mining operations (2021 – 99.0%). The remaining revenues from mining operations consisted of net by-product metal revenues from non-precious metals. 20. CAPITAL AND FINANCIAL RISK MANAGEMENT The Company’s activities expose it to a variety of financial risks: market risk (including interest rate risk, commodity price risk and foreign currency risk), credit risk and liquidity risk. The Company’s overall risk management policy is to support the delivery of the Company’s financial targets while minimizing the potential adverse effects on the Company’s performance. Risk management is carried out by a centralized treasury department under policies approved by the Board. The Company’s financial activities are governed by policies and procedures and its financial risks are identified, measured and managed in accordance with its policies and risk tolerance. A) Market Risk Market risk is the risk that changes in market factors, such as interest rates, commodity prices and foreign exchange rates, will affect the value of Agnico Eagle’s financial instruments. The Company can choose to either accept market risk or mitigate it through the use of derivatives and other economic hedging strategies. i. Interest Rate Risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations that have floating interest rates. There is no impact on income before income and mining taxes or on equity of a 1.0% increase or decrease in interest rates, based on financial instruments in place as at December 31, 2022. ii. Commodity Price Risk a. Metal Prices Agnico Eagle’s revenues from mining operations and net income are sensitive to metal prices. Changes in the market price of gold may be attributed to numerous factors such as demand, global mine production levels, central bank purchases and sales and investor sentiment. Changes in the market prices of by-product metals (silver, zinc and copper) may be attributed to factors such as demand and global mine production levels. In order to mitigate the impact of fluctuating by-product metal prices, the Company occasionally enters into derivative financial instrument contracts under its Board-approved Risk Management Policies and Procedures. The Company has a long-standing policy of no long-term forward gold sales. However, the policy does allow the Company to use other economic hedging strategies, where appropriate, to mitigate by-product metal pricing risks. The Company’s policy does not allow speculative trading. As at December 31, 2022, there were no metal derivative positions. b. Fuel 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 its diesel fuel costs (see Note 21 for further details on the Company’s derivative financial instruments). 58 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 20. CAPITAL AND FINANCIAL RISK MANAGEMENT (Continued) iii. Foreign Currency Risk The Company receives payment for all of its metal sales in US dollars and pays most of its operating and capital costs in Canadian and Australian dollars, Euros, or Mexican pesos. This gives rise to significant foreign currency risk exposure. The Company enters into currency economic hedging transactions under the Board-approved Foreign Exchange Risk Management Policies and Procedures to hedge part of its foreign currency exposure. The policy does not permit the hedging of translation exposure (that is, the gains and losses that arise from the accounting translation of Canadian and Australian dollars Euro or Mexican peso denominated assets and liabilities into US dollars), which does not give rise to cash exposure. The Company’s foreign currency derivative financial instrument strategy includes (but is not limited to) the use of purchased puts, sold calls, collars and forwards that are not held for speculative purposes (see Note 21 for further details on the Company’s derivative financial instruments). The following table sets out the translation impact, based on financial instruments in place as at December 31, 2022, on income before income and mining taxes and on equity for the year ended December 31, 2022 of a 10.0% weakening in the exchange rate of the US dollar relative to the Canadian dollar, Australian dollar, Euro and Mexican peso, with all other variables held constant. A 10.0% strengthening of the US dollar against the foreign currencies would have had the equal but opposite effect as at December 31, 2022. Canadian dollar Australian dollar Euro Mexican peso B) Credit Risk Positive (negative) impact on Income before Income and Mining Taxes and on Equity $(17,407) $ (1,701) $(10,251) $ 140 Credit risk is the risk that a third party might fail to fulfill its obligations under the terms of a financial instrument. Credit risk arises from cash and cash equivalents, short-term investments, trade receivables, loan receivable and certain derivative financial instruments. The Company holds its cash and cash equivalents and short-term investments in highly rated financial institutions which it believes results in a low level of credit risk. For trade receivables and derivative financial instruments, historical levels of default have been negligible, which the Company believes results in a low level of credit risk. The Company mitigates credit risk by dealing with what it believes to be credit-worthy counterparties and limiting concentration risk. For derivative financial instrument CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 59 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 20. CAPITAL AND FINANCIAL RISK MANAGEMENT (Continued) liabilities, the Company assumes no credit risk when the fair value of an instrument is negative. The maximum exposure to credit risk is equal to the carrying amount of the instruments as follows: Cash and cash equivalents Short-term investments (Note 8A) Trade receivables (Note 19) Fair value of derivative financial instruments Non-current loans receivable (Note 8B) Total C) Liquidity Risk As at December 31, 2022 As at December 31, 2021 $658,625 $185,786 9,896 8,579 8,774 3,939 5,288 13,545 12,305 37,942 $689,813 $254,866 Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company monitors its risk of a shortage of funds by monitoring its credit rating and projected cash flows taking into account the maturity dates of existing debt and other payables. The Company manages exposure to liquidity risk by maintaining cash balances, having access to undrawn credit facilities and access to public debt markets. Contractual maturities relating to lease obligations are set out in Note 13 and contractual maturities relating to long-term debt are set out in Note 14. Other financial liabilities have maturities within one year of December 31, 2022. D) Capital Risk Management The Company’s primary capital management objective is to maintain an optimal capital structure to support current and long-term business activities and to provide financial flexibility in order to maximize value for equity holders. Agnico Eagle’s capital structure comprises a mix of lease financing, long-term debt, and total equity as follows: Lease obligations (Note 13) Long-term debt (Note 14) Total equity Total As at December 31, 2022 As at December 31, 2021 $ 151,342 $ 131,433 1,342,070 16,241,345 1,565,223 5,999,771 $17,734,757 $7,696,427 The Company manages its capital structure and makes adjustments to it based on changes in economic conditions and the requirements of financial covenants. To effectively manage its capital requirements, Agnico Eagle has in place a rigorous planning, budgeting and forecasting process with the goal of ensuring it has the appropriate liquidity to meet its operating and growth objectives. The Company has the ability to adjust its capital structure by various means. 60 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 20. CAPITAL AND FINANCIAL RISK MANAGEMENT (Continued) See Note 14 for details related to Agnico Eagle’s compliance with its long-term debt covenants. E) Changes in liabilities arising from financing activities Long-term debt Lease obligations As at December 31, 2021 Changes from Financing Cash Flows Foreign Exchange Other(i) As at December 31, 2022 $1,565,223 (225,000) – 1,847 $1,342,070 131,433 (33,701) (5,988) 59,598 151,342 Total liabilities from financing activities $1,696,656 (258,701) (5,988) 61,445 $1,493,412 Note: (i) Includes the amortization of deferred financing costs on long-term debt reflected in finance costs and lease obligation additions. 21. 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 Australian 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 December 31, 2022, the Company had outstanding derivative contracts related to $2,907.9 million of 2023 and 2024 expenditures (December 31, 2021 – $2,375.2 million). The Company recognized mark-to-market adjustments in the loss on derivative financial instruments line item in the consolidated statements of income. The Company did not apply hedge accounting to these arrangements. 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 2022 and 2021 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 December 31, 2022 or December 31, 2021. The call option premiums were recognized in the loss on derivative financial instruments line item in the 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 primarily with its Nunavut operations’ diesel fuel exposure. There were derivative financial instruments outstanding as at December 31, 2022 relating to 19.0 million gallons of heating oil (December 31, 2021 – 10.9 million). The related mark-to-market adjustments prior to settlement were recognized in the loss on derivative financial instruments line item in the consolidated statements of income. The Company did not apply hedge accounting to these arrangements. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 61 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 21. 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. Share Purchase Warrants The Company holds warrants to acquire equity securities of certain issuers in the mining industry. These warrants are not part of the Company’s core operations, and accordingly, gains and losses from these investments are not representative of the Company’s performance during the year. The following table sets out a summary of the amounts recognized in the loss on derivative financial instruments line item in the consolidated statements of income. Premiums realized on written foreign exchange call options Unrealized loss on warrants Realized loss (gain) on currency and commodity derivatives Unrealized loss on currency and commodity derivatives Loss on derivative financial instruments 22. OTHER EXPENSES Year Ended December 31, 2022 2021 $ (859) $ (2,276) 9,820 22,175 59,556 16,736 (47,754) 44,397 $90,692 $ 11,103 The following table sets out amounts recognized in the other expenses line item in the consolidated statements of income: Loss on disposal of property, plant and mine development (Note 9) Interest income Temporary suspension and other costs due to COVID-19 Acquisition costs (Note 5) Environmental remediation Gain on sale of exploration properties Other costs Total other expenses Year Ended December 31, 2022 2021 $ 8,754 $ 9,451 (9,820) (3,937) 11,275 95,035 10,417 13,353 12,943 576 – (10,000) 25,647 (68) $141,308 $ 22,318 In the year ended December 31, 2022 the Company incurred $95.0 million of transaction and severance costs in connection with the Merger (Note 5), (2021 – $10.0 million). In the year ended December 31, 2021, $2.9 million of transaction costs were incurred by the Company in connection with the acquisition of TMAC (Note 5). In the year ended December 31, 2022, other costs comprised primarily of $6.7 million in write-offs of prepaid deposits and supplies, $6.5 million in losses incurred on an insurance claim related to a fire at Meadowbank, $3.5 million in legal claims and $2.3 million in property tax reassessments. 62 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 22. OTHER EXPENSES (Continued) On March 19, 2021, the Company completed the sale of certain non-strategic exploration properties in exchange for aggregate consideration of $10.0 million in cash and shares of the purchasers, receivable over time on the transaction anniversary each year until March 19, 2024. As all exploration costs related to these properties were expensed when incurred, the carrying value of the properties at the transaction closing was nil and the Company recognized a gain on sale equal to the consideration amount of $10.0 million. 23. SEGMENTED INFORMATION The Company identifies its operating segments as those operations whose operating results are reviewed by the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, for the purpose of allocating resources and assessing performance. Each of the Company’s operating mines and significant projects are considered to be separate operating segments. Reportable operating segments represent more than 10.0% of the combined revenue from mining operations, income or loss or total assets of all operating segments. Certain operating segments that do not meet the quantitative thresholds are still disclosed where the Company believes that the information is useful. The CODM also reviews segment income (defined as revenues from mining operations less production costs, exploration and corporate development expenses and impairment losses and reversals) on a mine-by-mine basis. Revenues from mining operations and production costs for the reportable segments are reported net of intercompany transactions. Corporate and other assets and specific income and expense items are not allocated to reportable segments. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 63 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 23. SEGMENTED INFORMATION (Continued) Year Ended December 31, 2022 Revenues from Mining Operations Production Costs Exploration and Corporate Development Impairment Loss $ 553,931 $ (213,393) $ 129,569 575,938 250,512 677,713 645,021 407,669 1,188,741 327,028 645,371 199,830 4,476 135,219 144 (72,096) (235,735) (103,830) (318,141) (442,681) (210,661) (489,703) (129,774) (204,649) (144,489) (1,943) (76,226) $ – – (9,749) – – – – – – – – – – – – – – – – – – – – – – (55,000) – (261,368) – (261,224) $5,741,162 $(2,643,321) $(271,117) $(55,000) $ 2,771,724 Segment Income (Loss) $ 340,538 57,473 330,454 146,682 359,572 202,340 197,008 699,038 197,254 440,722 55,341 2,533 3,993 $ 2,771,724 (1,094,691) (220,861) (82,935) (90,692) 16,081 (41,895) (141,308) $ 1,115,423 LaRonde mine LaRonde Zone 5 mine Canadian Malartic Complex Goldex mine Meliadine mine Meadowbank Complex Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Exploration(i) Segment totals Total segments income Corporate and other: Amortization of property, plant and mine development General and administrative Finance costs Loss on derivative financial instruments Foreign currency translation gain Care and maintenance Other expenses Income before income and mining taxes Note: (i) Exploration includes the Hope Bay project. 64 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 23. SEGMENTED INFORMATION (Continued) Year Ended December 31, 2021 Restated (Note 3U) Revenues from Mining Operations Production Costs Exploration and Corporate Development $ 654,577 $ (232,392) $ LaRonde mine LaRonde Zone 5 mine Canadian Malartic Complex Goldex mine Meliadine mine Meadowbank Complex Hope Bay project Kittila mine Pinos Altos mine Creston Mascota mine La India mine Exploration Segment totals Total segments income Corporate and other: Amortization of property, plant and mine development General and administrative Finance costs Loss on derivative financial instruments Foreign currency translation loss Other expenses Income before income and mining taxes Segment Income (Loss) $ 422,185 64,856 397,651 145,223 427,944 183,972 32,321 221,914 117,958 19,619 57,494 – – (5,367) – – – – – – – – 121,236 645,607 241,404 678,766 592,835 115,439 414,656 259,446 27,784 117,875 – (56,380) (242,589) (96,181) (250,822) (408,863) (83,118) (192,742) (141,488) (8,165) (60,381) – (147,147) (147,147) $3,869,625 $(1,773,121) $(152,514) $1,943,990 $1,943,990 (738,129) (142,003) (92,042) (11,103) (5,672) (22,318) $ 932,723 CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 65 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 23. SEGMENTED INFORMATION (Continued) The following table sets out revenues from mining operations by geographic area(i): Canada Australia Mexico Finland Total revenues from mining operations Note: (i) Presented based on the location of the mine from which the product originated. Year Ended December 31, 2022 2021 Restated (Note 3U) $4,348,597 $3,049,864 645,371 339,525 407,669 – 405,105 414,656 $5,741,162 $3,869,625 66 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 23. SEGMENTED INFORMATION (Continued) The following table sets out total assets by segment: LaRonde mine LaRonde Zone 5 mine Canadian Malartic Complex Goldex mine Meliadine mine Meadowbank Complex Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine Creston Mascota mine La India mine Exploration Corporate and other Total assets Total Assets as at December 31, 2022 December 31, 2021 Restated (Note 3U) $ 987,821 $ 946,218 115,404 93,699 1,582,406 1,508,675 339,390 2,323,873 1,387,335 1,647,353 9,120,416 2,266,891 1,224,645 463,823 4,864 150,967 821,718 1,057,902 315,266 2,299,564 1,195,060 1,600,278 – – – 466,334 5,068 233,376 959,005 593,547 $23,494,808 $10,216,090 CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 67 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 23. SEGMENTED INFORMATION (Continued) The following table sets out non-current assets by geographic area: Canada Australia Mexico Finland Sweden United States Total non-current assets As at December 31, 2022 As at December 31, 2021 Restated (Note 3U) $18,068,878 $6,749,909 1,148,932 600,954 – 671,691 1,469,917 1,458,838 14,970 11,098 16,128 17,136 $21,314,749 $8,913,702 The following table sets out the carrying amount of goodwill by segment for the years ended December 31, 2022 and December 31, 2021: Detour Macassa Canadian Malartic Complex Exploration Total Cost: Balance at December 31, 2021 $ – $ – $ 597,792 $60,000 $ 657,792 Acquisition (Note 5) 1,215,444 420,887 – – 1,636,331 Balance at December 31, 2022 $1,215,444 $420,887 $ 597,792 $60,000 $2,294,123 Accumulated impairment: Balance at December 31, 2021 Balance at December 31, 2022 Carrying amount at December 31, 2021 – – – – – – $ $ $ $ (250,000) $(250,000) $ – – (250,000) $ (250,000) $ 347,792 $60,000 $ 407,792 Carrying amount at December 31, 2022 $1,215,444 $420,887 $ 347,792 $60,000 $2,044,123 68 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 23. SEGMENTED INFORMATION (Continued) The following table sets out capital expenditures by segment: LaRonde mine LaRonde Zone 5 mine Canadian Malartic Complex Goldex mine Meliadine mine Meadowbank Complex Kittila mine Detour Lake mine Macassa mine Fosterville mine Pinos Altos mine La India mine Exploration(i) Corporate and other Total capital expenditures (i) Exploration includes the Hope Bay project. 24. IMPAIRMENT Impairment of Long Lived Assets La India Year Ended December 31, 2022 2021 Restated (Note 3U) $ 152,584 $138,784 22,893 16,953 195,413 130,544 61,401 155,100 141,451 106,369 394,132 122,473 94,712 53,270 16,391 14,332 7,716 48,696 150,229 152,163 123,152 – – – 49,422 20,601 50,958 15,496 $1,538,237 $896,998 In the fourth quarter of 2022, the Company determined that there was an indicator of impairment at the La India CGU primarily due to the depletion of the mineral reserves and resources as the project nears the end of its life, combined with rising input costs due to inflationary pressures and higher estimated costs to build and operate adjacent exploration projects. The estimated recoverable amount of the La India CGU as at December 31, 2022 was determined on the basis of fair value less costs to dispose (“FVLCD”) and was calculated by discounting the estimated future net cash flows of the La India mine and certain exploration projects within the CGU. Certain mineralization outside of the discounted cashflow models was calculated by reference to comparable market transactions. The recoverable amount was calculated to be less than the carrying amount and an impairment charge of $55.0 million ($52.7 million net of tax) was recognized on the property, plant and mine development costs. The discounted cash flow approach uses significant unobservable inputs and is therefore considered a Level 3 fair value measurement under the fair value hierarchy. The key assumptions used in CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 69 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 24. IMPAIRMENT (Continued) this assessment are consistent with the Company’s testing of goodwill impairment, as listed below. After giving effect to the impairment, the carrying value of La India was $134.3 million, as at December 31, 2022 Goodwill impairment tests In the fourth quarter of 2022, the Company performed the annual goodwill impairment test as required by IAS 36. The estimated recoverable amount of each CGU was calculated under the FVLCD basis and compared to the carrying amount and no impairments were identified for CGU’s with goodwill. The estimated recoverable amounts were calculated by discounting the estimated future net cash flows over the estimated life of the mine and in certain circumstances by reference to comparable market transactions. Key Assumptions The determination of the recoverable amount within level 3 of the fair value hierarchy, includes the following key applicable assumptions: • Discount rates were based on each asset group’s weighted average cost of capital (“WACC”), of which the two main components are the cost of equity and the after-tax cost of debt. Cost of equity was calculated based on the capital asset pricing model, incorporating the risk-free rate of return based on local government marketable bond yields as at the valuation date, the Company’s beta coefficient adjustment to the market equity risk premium based on the volatility of the Company’s return in relation to that of a comparable market portfolio, plus a size premium and Company-specific risk factors for each mine or project. Cost of debt was determined by applying an appropriate market indication of the Company’s borrowing capabilities and the corporate income tax rate applicable to each asset group’s jurisdiction; • Gold price estimates were determined using forecasts of future prices prepared by industry analysts, which were available as at or close to the valuation date; • Foreign exchange estimates are based on a combination of currency forward curves and estimates that reflect the outlooks of major global financial institutions; • Estimated production levels, and future operating and capital costs are based on detailed life of mine plans and also take into account management’s expected development plans; • Estimates of the fair value attributable to mineralization in excess of life of mine plans are based on various assumptions, including determination of the appropriate valuation method for mineralization and ascribing anticipated economics to mineralization in cases where only limited economic study has been completed; and • Market participants may utilize a net asset value (“NAV”) multiple when companies trade at a market capitalization greater than the net present value (“NPV”) of their expected cash flows. The NAV multiple takes into account a variety of additional value factors such as the exploration potential of the mineral property to find and produce more metal than what is currently included in the LOM plan or reserve and resource estimates, and the benefit of gold price optionality. The Company applied NAV multiples to the NPV of certain CGU’s that it judged to be appropriate. 70 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 24. IMPAIRMENT (Continued) The range of key assumptions used in the impairment tests are set out below: Gold price per oz WACC NAV multiple Foreign exchange rates Inflation As at December 31, 2022 2021 $1,700 – $1,800 $1,600 – $1,800 5.8% – 9.7% 1.06x – 1.21x 6.0% – 7.9% – US$0.75:C$1.00 to US$0.80:C$1.00 US$0.79:C$1.00 2.0% 2.0% 25. INCOME AND MINING TAXES Income and mining taxes expense is made up of the following components: Current income and mining taxes Deferred income and mining taxes: Origination and reversal of temporary differences Total income and mining taxes expense Year Ended December 31, 2022 2021 Restated (Note 3U) $277,076 $181,812 168,098 188,966 $445,174 $370,778 CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 71 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 25. INCOME AND MINING TAXES (Continued) The income and mining taxes expense is different from the amount that would have been calculated by applying the Canadian statutory income tax rate as a result of the following: Combined federal and composite provincial tax rates Expected income tax expense at statutory income tax rate Increase (decrease) in income and mining taxes resulting from: Mining taxes Impact of foreign tax rates Permanent differences Impact of foreign exchange on deferred income tax balances Total income and mining taxes expense The following table sets out the components of Agnico Eagle’s net deferred income tax assets: Year Ended December 31, 2022 2021 Restated (Note 3U) 26% 26% $290,010 $242,508 121,404 122,449 (5,106) 32,231 6,635 (9,531) (5,718) 21,070 $445,174 $370,778 Mining properties Net operating loss carry forwards Mining taxes Reclamation provisions and other liabilities Total net deferred income tax assets As at December 31, 2022 As at December 31, 2021 $(26,627) 13,466 1,995 22,740 $ 11,574 $ 9,439 107,489 – 16,680 $133,608 72 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 25. INCOME AND MINING TAXES (Continued) The following table sets out the components of Agnico Eagle’s deferred income and mining tax liabilities: Mining properties Net operating and capital loss carry forwards Mining taxes Reclamation provisions and other liabilities Total deferred income and mining tax liabilities As at December 31, 2022 As at December 31, 2021 Restated (Note 3U) $4,115,221 $1,524,229 (49,394) 195,249 (27,459) (98,807) (279,201) (174,835) $3,981,875 $1,223,128 Changes in net deferred tax assets and liabilities for the years ended December 31, 2022 and 2021 are as follows: As at December 31, 2022 As at December 31, 2021 Restated (Note 3U) Net deferred income and mining tax liabilities – beginning of year $1,089,520 $1,036,061 Income and mining tax impact recognized in net income Income tax impact recognized in other comprehensive income and equity Deferred income tax asset acquired on the purchase of TMAC Deferred income tax liability acquired on the purchase of Kirkland 168,109 (11,169) – 2,723,841 190,098 (3,542) (133,097) – Net deferred income and mining tax liabilities – end of year $3,970,301 $1,089,520 The Company operates in different jurisdictions and, accordingly, it is subject to income and other taxes under the various tax regimes in the countries in which it operates. The tax rules and regulations in many countries are highly complex and subject to interpretation. The Company may be subject, in the future, to a review of its historic income and other tax filings and, in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules and regulations to the Company’s business conducted within the country involved. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 73 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 25. INCOME AND MINING TAXES (Continued) The deductible temporary differences in respect of which a deferred tax asset has not been recognized in the consolidated balance sheets are as follows: Other deductible temporary differences As at December 31, 2022 As at December 31, 2021 $1,012,924 $420,154 The Company has $962.0 million (2021 – $469.1 million) of taxable temporary differences associated with its investments in subsidiaries for which deferred income tax has not been recognized, as the Company is able to control the timing of the reversal of the taxable temporary differences and it is probable that they will not reverse in the foreseeable future. The Company is subject to taxes in Canada, Australia, Finland and Mexico, each with varying statutes of limitations. Prior taxation years generally remain subject to examination by applicable taxation authorities. 26. EMPLOYEE BENEFITS AND COMPENSATION OF KEY MANAGEMENT PERSONNEL During the year ended December 31, 2022, employee benefits expense recognized in the statements of income was $1,113.9 million (2021 – $736.9 million). In 2022 and 2021, there were no related party transactions other than compensation of key management personnel. Key management personnel include the members of the Board and the senior leadership team. The following table sets out the compensation of key management personnel: Salaries, short-term incentives and other benefits Post-employment benefits Share-based payments Total 27. COMMITMENTS AND CONTINGENCIES Year Ended December 31, 2022 2021 $28,841 $13,582 2,198 26,567 1,581 23,475 $57,606 $38,638 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 December 31, 2022, the total amount of these guarantees was $795.1 million. Certain of the Company’s properties are subject to royalty arrangements. Set out below are the Company’s most significant royalty arrangements related to operating mines: • The Company has a royalty agreement with the Finnish government relating to the Kittila mine. Starting 12 months after the Kittila mine’s operations commenced, the Company has been required to pay 2.0% net smelter return royalty, defined as revenue less processing costs. • The Partnership is committed to pay a royalty on production or metal sales from certain properties in Quebec, Canada. The type of royalty agreements include, but are not limited to, net smelter return royalties, with percentages ranging from 1.5% to 5.0%. 74 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 27. COMMITMENTS AND CONTINGENCIES (Continued) • The Company is committed to pay a 5.0% net profits interest royalty on production from the Terrex property at the LaRonde mine in Quebec, Canada. • The Company is committed to pay a 2.0% net smelter return royalty on the metal sales from the LaRonde Zone 5 mine in Quebec, Canada. • The Company is committed to pay a 1.2% net smelter return royalty on sales from the Meliadine mine in Nunavut, Canada. • The Company is committed to two royalty arrangements on production from the Amaruq satellite deposit at the Meadowbank Complex in Nunavut, Canada, a 1.4% net smelter return royalty and a 12.0% net profits interest royalty. • The Company is committed to three royalty arrangements on production from the Hope Bay property in Nunavut, Canada, two 1% net smelter return royalties and a 12% net profit interest royalty. • The Company is committed to pay a royalty on production from certain properties in Mexico. The type of royalty agreements include, but are not limited to, net smelter return royalties, with percentages ranging from 2.5% to 3.5% at the Pinos Altos and Creston Mascota mines and with percentages ranging from 2.0% to 3.0% at the La India mine. • The Company is committed to various royalties on production from the Macassa mine in Ontario, Canada. The type of royalty agreements include, but are not limited to, net smelter return royalties, with percentages ranging from 0.5% to 1.5%. • The Company is committed to various royalty arrangements at the Detour mine in Ontario, Canada, including a 0.5% and 2.0% net smelter return royalty on the gold sales and royalties based on gold price and annual revenues payable to relevant First Nations. • The Company is committed to two royalty agreements on gold sales from the Fosterville mine in Victoria, Australia, comprising of a 2% net smelter return royalty and a 2.75% net smelter return royalty payable to the Victorian government. The Company regularly enters into various earn-in and shareholder agreements, often with commitments to pay net smelter return and other royalties. The Company had the following contractual commitments as at December 31, 2022, of which $122.3 million related to capital expenditures: 2023 2024 2025 2026 2027 Thereafter Total Contractual Commitments $120,628 13,648 10,490 2,915 2,764 4,047 $154,492 CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 75 AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 28. ONGOING LITIGATION Kirkland Effective as of February 8, 2022, the Company acquired all the issued and outstanding shares of Kirkland in the Merger (Note 5). Kirkland had previously disclosed the existence of certain contingent liabilities relating to outstanding litigation matters involving Kirkland and/or its wholly owned subsidiaries, some of which were amalgamated as part of a pre-closing corporate reorganization completed in early February 2022. One litigation matter remains outstanding as at December 31, 2022. Management believes that the claim has no merit and intends to defend it vigorously. No amounts have been recorded for any potential liability and the Company believes that the likelihood of loss is undeterminable at this point. Kirkland is the defendant in two putative class action complaints filed on June 29, 2020 and July 17, 2020 (and subsequently amended) in the United States District Court for the Southern District of New York (the “Court”). The complaints allege that during the period from January 8, 2018 to November 25, 2019, Kirkland and Kirkland’s former chief executive officer violated the United States securities laws by misrepresenting or failing to disclose material information regarding Kirkland’s acquisition of Detour Gold Corporation, which closed in January 2020. Following motions filed by both individual complainants, the Court entered an order on September 24, 2020 appointing one lead plaintiff and one lead counsel. On January 22, 2021, Kirkland filed a motion to dismiss. On September 30, 2021, the Court dismissed certain of the plaintiff’s claims against Kirkland. Since then, the parties have continued with the documentary and oral discovery process. The Company continues to believe that the one outstanding claim is without merit. Kittila permits In May 2020, the Regional State Administrative Agency of Northern Finland (the “RSAA”) granted Agnico Eagle Finland Oy (“Agnico Finland”) environmental and water permits that allowed Agnico Finland to enlarge its CIL2 tailings storage facility, expand the operations of the Kittila mine to 2.0 Mtpa and build a new discharge waterline. The permits were subsequently appealed by a third party to the Vaasa Administrative Court (the “VAC”). In July 2022, the appeals were granted, in part, with the result that the permits were returned for reconsideration to the RSAA. In August 2022, Agnico Finland appealed the decisions of the VAC to the Supreme Administrative Court of Finland (the “SAC”) and requested that the SAC restore the permits through an interim decision pending the ultimate result of Agnico Finland’s appeal. On November 1, 2022, the SAC issued an interim decision upholding the initial CIL2 tailings storage facility and restoring nitrogen emission levels for the year 2022. However, the SAC interim decision didn’t uphold the permit for the expansion of the mine to 2.0 Mtpa. The Vaasa Administrative Court decision is valid until a final decision is issued by the SAC. In the fourth quarter of 2022, Agnico Finland reduced its underground production levels to comply with the mining volume requirements. Agnico Finland expects a final decision from the SAC in late 2023. If the SAC does not reinstate Agnico Finland’s permits as granted by the RSAA in 2020 to produce at, or close to, 2.0 Mtpa, the Company intends to submit an updated permit application for 2.0 Mtpa output level or higher. 29. SUBSEQUENT EVENTS Dividends Declared On February 16, 2023, Agnico Eagle announced that the Board approved the payment of a quarterly cash dividend of $0.40 per common share (a total value of approximately $182.6 million), payable on March 15, 2023 to holders of record of the common shares of the Company on March 1, 2023. 76 AGNICO EAGLE CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE MINES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (thousands of United States dollars, except share and per share amounts, unless otherwise indicated) December 31, 2022 29. SUBSEQUENT EVENTS (Continued) Acquisition of the Canadian Assets of Yamana On November 8, 2022, the Company entered into an arrangement agreement with Yamana and Pan American pursuant to which Pan American will acquire all of the issued and outstanding shares of Yamana and Yamana will sell the subsidiaries and partnerships that hold Yamana’s interests in its Canadian assets to Agnico Eagle, including Yamana’s 50% ownership of the Canadian Malartic mine. On January 31, 2023, Pan American and Yamana shareholders approved the Yamana Transaction at their respective special meetings. The consideration paid by the Company in the Yamana Transaction consists of US$1.0 billion in cash; and 36,089,907 common shares of Agnico Eagle. Closing of the Transaction is subject to customary conditions, including the receipt of necessary signatory approvals, and is expected to occur in March 2023. The Company will consolidate the operating results, cash flows and net assets from the Yamana transaction in its interim financial statements from March 31, 2023. The Company will report the financial statement impact of the acquisition, including the allocation of the purchase price based on the fair values of identifiable assets acquired and liabilities assumed as at the acquisition date, in its interim financial statements for the first quarter ending March 31, 2023. CONSOLIDATED FINANCIAL STATEMENTS AGNICO EAGLE 77 Shareholder Information Auditors Ernst & Young LLP Annual Meeting of Shareholders Friday, April 28, 2023 at 11:00 AM Solicitors Davies Ward Philips & Vineberg LLP (Toronto and New York) Listings New York Stock Exchange and the Toronto Stock Exchange Stock Symbol: AEM Transfer Agent Computershare Trust Company of Canada 1-800-564-6253 Investor Relations (416) 947-1212 Hybrid Format: Arcadian Court 401 Bay Street Simpson Tower, 8th Floor Toronto, Ontario, Canada M5H 2Y4 and online at: https://meetnow.global/M5UPTSH IMPORTANT NOTICE The Company is conducting a hybrid meeting that will allow registered shareholders and duly appointed proxyholders to participate both online and in person. The Company is providing the virtual format in order to provide shareholders with an equal opportunity to attend and participate at the AGM. Details on how to participate will be available in advance of the Meeting. Corporate Head Office Agnico Eagle Mines Limited 145 King Street East, Suite 400 Toronto, Ontario, Canada M5C 2Y7 (416) 947-1212 facebook.com/agnicoeagle twitter.com/agnicoeagle info@agnicoeagle.com agnicoeagle.com a d a n a C n i d e n i r t P m o c . i b a r c . w w w s n o i t i a c n u m m o C & n g s e D b a r C i i i : n g s e D A g n i c o E a g l e M i n e s L i m i t e d 2 0 2 2 A n n u a l R e p o r t Agnico Eagle Mines Limited 145 King Street East, Suite 400 Toronto, Canada M5C 2Y7 agnicoeagle.com 

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