Agnico Eagle Mines Limited (NYSE:AEM) Q4 2022 Earnings Call Transcript

Ammar Al-Joundi: Yes. I think that — good question, Emily, nice to hear your voice. Really, it’s just the operations. The operations, as we’re going to have more production, as we get into different areas in the mine sequence, the costs are anticipated to go down. So, we have not really assumed any relief on consumables or labor or that sort of thing. We will work hard to get there. But mostly, it is increased throughput and mine sequencing.

David Smith: And I’d just add to that, Emily, that as we said in the press release, no assumption of hedging success on any of these inputs like currency or fuel is included in our guidance because there’s no guarantee those things will work out. But we’ll continue to attempt to add to those hedging programs during the year, if it’s beneficial.

Ammar Al-Joundi: And also, there’s no assumption on either production or costs of some of the optimization that we’re working on, which would further reduce costs. So, we can give a fair level of confidence absent unusual market moves that the costs should go down because we see what the life of mine is, and we know what the cost per ton is and we know what the throughput is and all of that, and that’s going to all improve. But we haven’t included some of the optimization that we’re working on. And clearly, as you produce more ounces with the same infrastructure, your cost per ounce goes down.

Emily Chieng: Understood. That’s very clear. And maybe my second question, just around the progress and your Abitibi Gold Belt strategy there and how you’re optimizing mill throughput. How do you think about prioritizing the cadence of when each of those nearby resources start to fill in and when they should start to contribute the initial ounces that you’re talking about?

Ammar Al-Joundi: I mean, that’s an excellent question, and we’ve really been focused a lot on that over the last few months. The best way to answer that, Emily, is we are doing this at two levels. We’re doing this at the most senior level and Jean Robitaille is working on this with Guy and Natasha and Dominique. But also importantly, and this is the key thing. Each of these projects has a project leader and a team and a time frame with milestones. And so, it’s one thing to talk about a vision but what you really actually have to have as a plan. And we have the teams in place. We have the resources in place. And the cadence, to your point, will be driven by those specific opportunities, both when these projects can come on stream and also, frankly, when the mill capacity comes on stream.

Operator: Your next question comes from Greg Barnes from TD. Please go ahead.

Greg Barnes: Ammar, you’re forecasting CapEx of around $1.4 billion to $1.6 billion in ’24 and ’25. With all of the optimization programs and plans you have for the Abitibi, does that number come down beyond 2025, or is it going to stay in that range as we go forward to the end of the decade?