Agnico-Eagle buys Bousquet assets (July 31, 2003)

Agnico-Eagle Mines (AGE-T) is buying a 100% interest in Barrick Gold‘s (ABX-T) Bousquet gold property, situated immediately west and south of Agnico-Eagle’s LaRonde gold mine in northwestern Quebec.

Included in the deal is Bousquet’s used machinery and equipment from the now-closed Bousquet mines, including underground rolling stock and Bousquet 2’s headframe.

Agnico will pay C$5 million in cash, C$2 million in Agnico shares and the assumption of certain reclamation obligations at the property, excluding certain employment-related liabilities.

Barrick will retain a 2% net smelter return royalty on all the properties acquired by Agnico-Eagle.

Agnico is also boosting to 100% its stake in the Bruce property, situated 1 mile east of LaRonde, and considering acquiring some of Barrick’s exploration properties in the region, including Orion B-1, Orion B-2, Joannes North, Orion South and Norgold, all south and west of Cambior’s Doyon property.

For the second quarter, Agnico posted a net loss of US$3.8 million (US5 per share) compared to net income of US$3.4 million during the same period last year. Mining revenue was virtually unchanged at US$30 million.

The company produced 60,157 oz. gold in the second quarter, compared to 74,617 oz. gold a year ago. Year to date, Agnico produced 115,162 oz. gold compared to 134,876 oz. gold in the first six months of 2002.

The company attributes the decline to a first-quarter rock fall at LaRonde that delayed the extraction of gold/copper mining blocks in March and caused higher-than-planned dilution in the mining blocks affected by the rock fall.

For all of 2003, the company expects to produce about 300,000 oz. gold at a total cash cost of US$180 per oz.

At June 30, 2003, Agnico-Eagle’s consolidated cash and cash equivalents were US$121 million while working capital was US$156 million.