Agnico -Eagle Provides Exploration Update; Zones Extended at Several Deposits; New Discovery Near Meliadine’s Wesmeg Deposit
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AGNICO-EAGLE PROVIDES EXPLORATION UPDATE;
ZONES EXTENDED AT SEVERAL DEPOSITS;
NEW DISCOVERY NEAR MELIADINE’S WESMEG DEPOSIT
TORONTO (June 26, 2012) - Agnico-Eagle Mines Limited (NYSE:AEM)(TSX:AEM) (“Agnico-Eagle” or the “Company”) is pleased to provide interim results from its 2012 exploration program. The 2012 program is primarily focused on drilling at Kittila (Finland), Meliadine (Canada) and Mascota/Bravo (Mexico), conversion of resources at La India (Mexico) and further exploration of the early-stage deposit at Tarachi (Mexico).
From January through May 2012, Agnico-Eagle spent approximately $43 million on exploration.
Highlights of the 2012 exploration program to date include:
- At Meliadine:
- Discovery of the new “Normeg” zone on the west end of the Wesmeg deposit
- Confirmation that the Pump deposit has two distinct branches
- Tiriganiaq bulk sample returned 13.5 grams per tonne (“g/t”) gold from 4,573 tonnes, confirming the grade estimate of reserves in the two largest zones, and increasing confidence in the model precision and accuracy of future reserves and resources estimates
- At Kittila:
- High-grade drill intercepts at Rimpi confirm the continuity of the zone at depth and to the north, yielding 6.6 g/t gold over 10.0 metres true width at 800 metres depth, and 10.7 g/t gold over 3.8 metres at 1,040 metres depth
- At La India:
- Infill drilling is confirming the expected grades and widths and increasing the confidence in the resource model developed by the previous owner
- At Pinos Altos:
- New Veta Flor zone discovered west of Creston Mascota pit includes 3.3 g/t gold and 41.7 g/t silver over 6.2 metres core length at 263 metres depth
- Better than expected grades near eastern side of Creston Mascota pit and possible expansion to south toward Bravo zone
“These exploration results reinforce our opinion that we own several world-class gold deposits that we expect will continue to grow” said Sean Boyd, President and CEO. “We look forward to the completion of several feasibility and expansion studies in the medium term that will reinforce that Agnico-Eagle remains a lower-risk gold growth company” added Mr. Boyd.
Meliadine – Current Orebody Continues to Grow and New Zones Discovered
The 2012 exploration budget for the Meliadine project in Nunavut is $20.7 million for drilling on the known deposits, as well as a further $9.6 million for regional exploration. However, due to the exploration success to date in 2012 the Company expects that additional exploration funding will be provided to extend the Meliadine drilling program an extra two months into September 2012. This drilling will target the parts of the deposit that have the best potential in terms of grade and / or thickness. The company-wide exploration expenditures in 2012 are now anticipated to total approximately $115 million for the full year.
From January through May 2012, the drilling has focused on resource expansion, resource to reserve conversion, and investigating new areas of interest near Tiriganiaq, Wesmeg, Pump, the F Zone and Normeg. These zones, and the location of selected drill collars, are shown on the geology map below.
[Meliadine local geology map]
High-grade Intercepts at Tiriganiaq and Underground Bulk Sample Results
In the Tiriganiaq zone, drilling continues to focus on converting resources into reserves. The table below sets out the most significant drill results from the Tiriganiaq zone through May 2012. The hole collars are located on the Meliadine geology map, and the pierce points are shown on the Tiriganiaq longitudinal section.
Significant Tiriganiaq zone drill results
| Drill Hole | Zone | From (metres) | To (metres) | Depth below surface (metres) | Estimated true width (metres) | Gold grade (g/t) (uncut) | Gold grade (g/t) (cut)* |
|---|---|---|---|---|---|---|---|
| M11-1304 | 1000 & 1025 | 345.8 | 359.0 | 305 | 10.9 | 13.5 | 13.5 |
| including | 1000 | 348.5 | 353.0 | 304 | 3.8 | 36.1 | 36.1 |
| M11-1314 | 1100 | 324.7 | 329.0 | 266 | 4.3 | 21.7 | 14.4 |
| M11-1364 | 1000, 1015 & 1025 | 427.0 | 438.0 | 402 | 9.6 | 7.7 | 7.7 |
| including | 1000 & 1015 | 431.0 | 437.0 | 403 | 5.1 | 10.9 | 10.9 |
| M11-1370 | 1087, 1100 & 1155 | 195.0 | 210.0 | 174 | 12.1 | 14.6 | 10.4 |
| including | 1155 & 1100 | 195.0 | 201.0 | 170 | 5.0 | 29.1 | 18.6 |
| M12-1504 | 1025 | 57.0 | 63.0 | 49 | 5.4 | 9.3 | 9.3 |
| including | 1025 | 57.0 | 60.0 | 47 | 2.8 | 15.9 | 15.9 |
*Holes at Tiriganiaq deposit use a capping factor ranging from 15 to 120 g/t gold depending on the zone.
[Tiriganiaq Longitudinal Section]
The drilling on Tiriganiaq has returned a number of intersections that confirmed or exceeded the current reserve grade (7.2 g/t of gold) over significant thicknesses, such as hole M11-1304 which yielded 13.5 g/t over 10.9 metres estimated true width at 305 metres depth. Other drilling has confirmed the east and west extensions to the mineralized zones, such as hole M11-1370 which yielded 10.4 g/t of gold over 12.1 metres at 174 metres depth on the east side of the resource envelope, and M12-1504 which yielded 15.9 g/t of gold over 2.8 metres at 47 metres depth on the west end.
Bulk Sample Confirms Assumptions
The Company processed approximately 4,600 tonnes of ore from an underground bulk sample from the Tiriganiaq orebody during 2011. The ore was extracted from lateral development in the Tiriganiaq deposit on two levels. The areas were sampled beforehand by diamond drilling on 15-metre spacings. Each development round was also sampled individually through the on-site sampling tower and the samples were shipped to an independent laboratory for assaying. The results of the program were compared with the December 31, 2011 reserve and resource estimate.
The program confirmed, within expected precision, the resource estimation model that has been developed for the two principal zones (Zones 1000 and 1100) at Tiriganiaq. In fact, the sampling results indicate approximately 6% more gold than was predicted by the block model for these areas. The following table sets out the undiluted results of the 2011 bulk sample.
Results of the Tiriganiaq 2011 bulk sample vs. the block model estimates
| Zone & Level | Block Model | Bulk Sample | |||||
|---|---|---|---|---|---|---|---|
| Drill holes | Tonnes | Gold grade (g/t) | Gold (oz) | Tonnes | Gold grade (g/t) | Gold (oz) | |
| 1000 Zone 1100 Zone | 20 | 2,391 | 9.4 | 720 | 2,158 | 10.0 | 691 |
| 13 | 2,555 | 14.0 | 1,149 | 2,415 | 16.7 | 1,298 | |
| Total | 33 | 4,946 | 11.8 | 1,869 | 4,573 | 13.5 | 1,989 |
The 2011 bulk sample program also confirmed the previous assessment of the Company’s block model in terms of grade continuity, consistency and distribution, and the evaluation of related mining properties through geological mapping, underground chip-, channel- and muck-sampling, and geotechnical observations.
Wesmeg Zone Extended
Drilling in 2012 has continued to outline good grades and thicknesses at very shallow depths in the central portion of the Wesmeg deposit, such as hole M12-1405 which returned 7.7 g/t gold over 4.2 metres estimated true width at seven metres depth, M12- 1412 which returned 6.2 g/t gold over 8.0 metres at 88 metres depth, and M12-1474 which returned 4.8 g/t gold over 8.9 metres at 26 metres depth. The successful drilling program is expected to result in a significant increase in indicated resources in the Wesmeg deposit for the year end calculation.
Significant recent Wesmeg drill results
| Drill Hole | Zone | Program | From (metres) | To (metres) | Depth below surface (metres) | Estimat ed true width (metres) | Gold grade (g/t) (uncut) | Gold grade (g/t) (cut)* |
|---|---|---|---|---|---|---|---|---|
| M12-1405 | 490 | conversion | 9.7 | 14.0 | 7 | 4.2 | 9.7 | 7.7 |
| and | 430 | 185.0 | 189.8 | 129 | 4.6 | 5.4 | 5.4 | |
| M12-1412 | 460 | conversion | 113.5 | 122.0 | 88 | 8.0 | 6.2 | 6.2 |
| including | 119.0 | 122.0 | 90 | 2.9 | 10.8 | 10.8 | ||
| M12-1474 | 710 | conversion | 30.4 | 40.0 | 26 | 8.9 | 4.8 | 4.8 |
| including | 33.0 | 39.0 | 26 | 5.5 | 6.3 | 6.3 |
- Holes at Wesmeg deposit use a capping factor of 30.0 g/t gold.
[Wesmeg Composite Longitudinal Section]
New Zone Discovered at Normeg
The Normeg zone was discovered in 2011 on the western end of the Wesmeg zone’s North Trend by drill hole M11-1314 which returned 5.1 g/t gold over 6.8 m at 380 metres depth (disclosed in the Company’s February 15, 2012 news release).
Recent drill results from approximately 500 metres west of the discovery drill hole, include M12-1489 which returned 8.4 g/t gold over 12.9 m including 10.4 g/t over 9.9 m at 124 m depth, M12-1514 which returned 10.0 g/t gold over 6.2 m including 14.2 g/t over 4.0 m at 84 m depth, and M12-1518 which returned 5.8 g/t gold over 13.5 m including 8.5 g/t over 8.4 m at 78 m depth. These results suggest that Normeg likely has a strike length of approximately 500 metres to 700 metres and that it extends from surface to at least 380 metres depth.
This zone is an important target in the 2012 program, as it may improve the open pit and underground components of the Meliadine deposit with multiple parallel mineralized horizons. The objectives for the rest of the year will be to define and estimate the initial resources for the Normeg zone.
Drill Hole Zone Program From To Depth Estimat Gold Gold
| (metres) | (metres) | below surface (metres) | ed true width (metres) | grade (g/t) (uncut) | grade (g/t) (cut)* | |||
|---|---|---|---|---|---|---|---|---|
| **M11- 1314 | Normeg | exploration | 480.0 | 487.0 | 380 | 6.8 | 5.1 | 5.1 |
| M12-1489 | Normeg | exploration | 144.0 | 158.0 | 122 | 12.9 | 23.1 | 8.4 |
| including | 146.4 | 157.0 | 124 | 9.9 | 29.7 | 10.4 | ||
| M12-1514 | Normeg | exploration | 104.0 | 110.5 | 83 | 6.2 | 43.6 | 10.0 |
| including | 106.3 | 110.5 | 84 | 4.0 | 66.3 | 14.2 | ||
| M12-1518 | Normeg | exploration | 94.5 | 110.1 | 81 | 13.5 | 5.8 | 5.8 |
| including | 94.5 | 104.0 | 78 | 8.4 | 8.6 | 8.5 |
- Holes at Normeg deposit use a capping factor of 30.0 g/t gold.
** This intersection of hole M11-1314 was previously reported in the Company’s exploration news release dated February 15, 2012.
Pump Zone Extended, Has Two Distinct Branches
Exploration drilling in 2012 has led to a better understanding of the Pump deposit and the previously known zones have been extended. It is now confirmed that these zones are composed of stacked structures that are separated into two distinct deposits named Pump West and the Pump North. The Pump North deposit is very prospective and will be a focus with the expectation of adding resources in the near future. Drill results show that the Pump deposits have strong grades and widths near surface and are open along strike and at depth. This suggests that these deposits may be amenable to extraction by open pit techniques.
Significant recent Pump zone drill results
| Drill Hole | Branch | From (metres) | To (metres) | Depth below surface (metres) | Estimated true width (metres) | Gold grade (g/t) (uncut) | Gold grade (g/t) (cut)* |
|---|---|---|---|---|---|---|---|
| M12-1392 | Pump West | 20.0 | 28.0 | 18 | 6.8 | 6.4 | 6.4 |
| including | 24.0 | 28.0 | 19 | 3.4 | 11.0 | 11.0 | |
| M12-1410 | Pump North | 149.8 | 157.0 | 108 | 7.2 | 6.5 | 6.5 |
| including | 149.8 | 154.1 | 107 | 4.3 | 9.1 | 9.1 | |
| and | 161.8 | 172.1 | 117 | 9.9 | 7.0 | 7.0 | |
| including | 164.7 | 171.4 | 119 | 6.4 | 9.2 | 9.2 | |
| M12-1437 | Pump North | 87.0 | 105.0 | 68 | 17.1 | 3.5 | 3.5 |
| including | 90.0 | 95.0 | 66 | 4.8 | 7.1 | 7.1 | |
| M12-1449 | Pump North | 211.0 | 217.1 | 161 | 6.1 | 6.5 | 6.5 |
| including | 213.0 | 217.1 | 162 | 4.1 | 9.0 | 9.0 | |
| M12-1458 | Pump North | 214.0 | 222.5 | 198 | 7.6 | 8.7 | 8.0 |
| including | 216.5 | 220.5 | 198 | 3.3 | 15.0 | 13.4 | |
| M12-1593 | Pump North | 179.0 | 185.6 | 135 | 6.4 | 7.8 | 7.8 |
- Holes at Pump deposit use a capping factor of 35.0 g/t gold.
[Pump Longitudinal Section]
At Pump West, hole M12-1392 yielded 6.4 g/t gold over 6.8 metres estimated true width including 11.0 g/t gold over 3.4 metres at 19 metres depth. In Pump North, hole M12- 1410 yielded 9.2 g/t gold over 6.4 metres at 119 metres depth, while M12-1458 yielded 8.0 g/t gold over 7.6 metres including 13.4 g/t gold over 3.3 metres at 198 metres depth. On the western side of Pump North, hole M12-1593 yielded 7.8 g/t gold over 6.4 metres at 135 metres depth. Additional investigation will be done between Pump West and Pump North to see if they are connected.
The Pump zone’s current inferred resources of approximately 775,000 tonnes at 5.3 g/t gold are expected to grow in the next Meliadine resources estimate for year end 2012 (currently anticipated to be released in February 2013).
Kittila’s Rimpi and Roura Zones Expand Northward and at Depth
Three main deposits currently comprise the majority of the Kittila orebody, located in Finnish Lapland. The Suuri, Roura and Rimpi deposits have a strike length of almost four kilometres with reserves and resources to a depth of more than 1,000 metres.
Exploration to date in 2012 has confirmed grades and thicknesses at Suuri and expanded the known mineralization at the Rimpi and Roura deposits, both at depth and to the north, highlighting further exploration potential.
Construction of a ramp is underway which will facilitate the drilling of the Suuri and Roura deposits at depth (below 1,000 metres) and is expected to reach the Rimpi zone within the next two years. To the end of May 2012, the ramp had advanced 150 metres towards the Roura zone at 600 metres below surface. Approximately 600 metres of development is planned on this ramp in 2012. Drilling from the ramp is expected to begin in the second quarter of 2013 targeting infill drilling and the largely untested areas at depth below both Suuri and Roura.
Recent conversion drilling in the Suuri and Roura deposits has confirmed similar grades and thicknesses between 300 and 600 metres below surface as compared to prior drilling. For example, hole SCON-11-507 returned 7.2 g/t gold over 12.4 metres at 605 metres depth in the Suuri deposit. In Roura, hole ROU-11-004 intersected 12.2 g/t gold over 5.1 metres at 970 metres depth.
The table below sets out selected recent drill results from the mine site exploration. The pierce points of the intercepts are shown on the Kittila longitudinal section.
Significant recent Rimpi, Roura and Suuri zone exploration drill results
| Drill Hole | Zone | From (metres) | To (metres) | Depth below surface (metres) | Estimated true width (metres) | Gold grade (g/t) (uncut)* |
|---|---|---|---|---|---|---|
| SCON-11-501 | Suuri | 209 | 215 | 560 | 6.0 | 6.90 |
| SCON-11-506 | 167 | 176 | 510 | 8.7 | 5.70 | |
| SCON-11-507 | Suuri | 163 | 174 | 600 | 10.8 | 3.73 |
| and | 193 | 206 | 605 | 12.4 | 7.22 | |
| SCON-11-510 | Suuri | 83 | 96 | 328 | 13.0 | 5.23 |
| SCON-11-511 | Suuri | 56 | 60 | 347 | 3.9 | 6.61 |
| SCON-11-518 | Suuri | 110 | 114 | 422 | 4.0 | 5.59 |
| ROU-11-004 | Roura North | 1,094 | 1,103 | 969 | 5.1 | 12.15 |
| RIE-11-010B | Rimpi Central | 980 | 992 | 794 | 10.0 | 6.59 |
| and | 1,026 | 1,035 | 818 | 7.6 | 3.05 | |
| RIE-11-012 | Rimpi Central | 1,076 | 1,088 | 863 | 10.7 | 4.81 |
| RIE-11-019 | Rimpi North | 1,163 | 1,169 | 1,022 | 3.8 | 7.58 |
| and | 1,184 | 1,194 | 1,040 | 6.4 | 7.19 | |
| including | 1,188 | 1,194 | 1,041 | 3.8 | 10.74 |
*All grades are uncut at Kittila
[Kittila longitudinal section]
Rimpi Trend Extended at Depth by 150 metres
The Rimpi Trend continues to show strong potential, plunging from surface shallowly northward. Hole RIE-11-010B had five intercepts within the current resource envelope, with the best being 6.6 g/t gold over 10.0 metres true width at 800 metres depth. These appear to be the same lenses that were intersected by hole RIE-11-019 (10.7 g/t gold over 3.8 m at 1,040 metres depth). The RIE-11-019 intercept extends the Rimpi mineralization by approximately 150 metres below the deepest hole from previous drilling.
Additionally, hole RIE-11-012 intersected 4.8 g/t gold over 10.7 metres at approximately 865 metres depth, extending the mineralization roughly 50 metres northward. These higher grade, deep intercepts are expected to contribute to increased mineral resources in the next reserve and resource statement. It is possible that the Rimpi mineralization could have a significant impact on Kittila’s future production profile via a longer term expansion, likely involving a shaft.
Mine-site exploration expenditures at Kittila in 2012 are estimated to total $13.5 million. Five drill rigs are currently operating, with a sixth expected to be added shortly. The drilling focus remains on Rimpi and on demonstrating continuity of the mineralization at different depths with the goal of significantly increasing the resources to the north.
Hanhimaa Gold Project Optioned West of Kittila
In May 2012, Agnico-Eagle signed a Letter of Intent with an Australian company, Dragon Mining Limited (“Dragon”), to earn an interest in its Hanhimaa gold project, just 10 kilometres west of the Kittila mine operations. The Company can earn up to a 70% interest in the project by spending approximately $12 million over six years.
The 360 square kilometre Hanhimaa property encompasses the north-south-trending Hanhimaa Shear Zone, which is parallel to the Kiistala Shear Zone that hosts the main deposits of the Kittila mine, as shown in the map below.
[Hanhimaa project location map]
Dragon has completed 6,684 metres of diamond drilling on the Hanhimaa property, returning encouraging intercepts at the Kiimalaki prospect. Some of the best results reported from this prospect included 11.7 metres core length grading 4.48 g/t gold, 7.5 metres core length grading 5.88 g/t gold, and 5.0 metres core length grading 5.96 g/t gold.
Limited drilling at the Kellolaki prospect, approximately two kilometres to the north, has yielded intercepts of 8.0 metres core length grading 1.95 g/t gold, and 8.6 metres core length grading 1.51 g/t gold. Gold occurrences have also been identified at the Kiimakuusikko prospect, approximately four kilometres south of Kiimalaki. (Source: Dragon press release dated May 25, 2012. Readers should note that this exploration information has not been verified by Agnico-Eagle for disclosure compliance with National Instrument 43-101).
Once the final agreement is completed, Agnico-Eagle will begin to compile and verify the previous work on the property and take over as project manager. Targets are ready for a new drill program, which will begin when the claim permits have been confirmed.
Mexico
La India Feasibility Underway and Exploration at Tarachi Zone
The La India project, located in Mexico’s Sonora State approximately 60 kilometres northwest of Agnico-Eagle’s Pinos Altos mine, was acquired in November 2011.
La India is being evaluated for its potential development as a low cost, open pit, heap leach operation. The Company is working on a feasibility study, and is concurrently obtaining environmental permits, land rights, and engineering design for the project. Work on access road improvements, site clearing, water supply development, communications, detailed engineering, and camp infrastructure is currently underway with the objective of enhancing the project development schedule and facilitating exploration in the area.
The focus of the exploration program this year is infill and condemnation drilling at the La India deposit, as well as resource expansion of the Tarachi deposit, approximately 10 kilometres to the north.
[La India & Tarachi Project Map]